'Tentative recovery at best'

BAXTER - Predictions and opportunities in the economic recovery were discussed at the Brainerd Lakes Area Development Corp.'s 22nd annual meeting Monday in Baxter.

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"This is a tentative recovery at best," said Bill Blazar, keynote speaker. "The employment picture really isn't recovering."

The economy has not grown enough to replace the many jobs lost in 2009, said Blazar, Minnesota Chamber of Commerce senior vice president, public affairs and business development.

Blazar said when he moved to Minnesota in 1974 he heard the state was the center for production of computer main frames in the nation and perhaps the world. No longer. Zero main frames are made in the state now. The lesson is the economy is a dynamic, changing force. The big companies of today, won't be the big companies of tomorrow, Blazar said. The challenge is being able to identify the opportunities ahead.

Bill Blazar was the keynote speaker at the Brainerd Lakes Area Development Corp.'s annual meeting Monday. Blazar is Minnesota Chamber of Commerce senior vice president, public affairs and business development.

Brainerd Dispatch/Steve Kohls

As part of Grow Minnesota, Blazar said visits to 900 businesses, including about 60 in this region, have provided insights. The companies coming out of the recession better than others found a way to reach customers outside the United States. Those struggling depend on U.S. retail sales or on the depressed housing market.

About 38 percent of businesses said they'd add employees in the next 18 months, but Blazar said he thought that was optimistic and he noted 62 percent said they'd stay the same or cut employees. Minnesota's economy is homegrown, so businesses leaving the state because of financing issues is troubling, Blazar said as he noted three companies re-located to Wisconsin because of financing.

Blazar divided Minnesota companies in three segments - small business, Fortune 500 companies and those in-between with 50 to 1,000 employees - and highlighted noteworthy areas. The small businesses have a high mortality rate and startups are on a record pace. Fortune 500 companies like Target and 3M, which are good for the state's identity with headquarters here, are unlikely to provide job growth as the bottom line forces cuts and jobs are sent elsewhere. The in-between category is most likely to contribute to growth and makes business retention so important, Blazar said.

Blazar pointed to specialized manufacturing as providing an opportunity and noted Minnesota has great expertise in that area.

Support for small business includes making sure those companies have money to grow, Blazar said. Concerns come from cost of electricity, which Blazar said has a lot to do with Legislative mandates. Ensuring there are no tax increases and streamlining permitting are some of the policy items to focus on along with education reform, Blazar said. He speaks with companies that have concerns about the quality of the K-12 education noting businesses expect to train them but don't expect to have to teach them to read and write.

"We're probably suffering through the worst economic conditions that we've had in 80 years," said Tom Anderson, BLADC Board of Directors president.

Anderson received the biggest laughter from the crowd when he said it seems the only person doing well is the one making the signs for Close-Converse. While economists have predicted the economic recovery may take five to 10 years to return to normal and home values have had the largest drop since the Great Depression, Anderson said BLADC has been in the community to assist in good times and in bad.

"We're going to get through this one, too," Anderson said, looking to the leadership in the room with businesses and government representatives in attendance. About 170 people attended the event at The Lodge in Brainerd Lakes in Baxter. People and businesses are resilient, Anderson said. "The national economy is starting to see the initial signs of coming out of this," Anderson said. "We know the best years for our community are still ahead."

RENEE RICHARDSON may be reached at renee.richardson@brainerddispatch.com or 855-5852.