Economy
To help demonstrate the importance of the Minnesota Bioincentive Program prior to its adoption, the Great Plains Institute contracted the University of Minnesota Extension in 2014 to analyze economic impacts of 14 potential biobased industry products facilities. The study found that growing the bioeconomy in Minnesota could boost the economy by over $830 million per year and create more than 3,000 jobs. Testing those results after the Bioincentive Program had been operating for a few years, GPI contracted the University again in 2019 for a subsequent report on the economic contribution of the biobased industrial products industry in Minnesota. Results from the 2019 report demonstrated that the Bioincentive Program contributed to $1.2 billion of economic activity in the state and supported over 8,000 jobs between 2015 and 2019.
Compared to the 2014 analysis, the 12 facilities studied in 2019 contributed over $600 million to the economy and supported over 2,400 jobs annually. Had 14 facilities been operating, the study indicated they would have contributed over $700 million to the economy and supported over 2,800 jobs annually.
Table 1: Total Economic Contribution, 2014 Estimates Compared to 2019 Actuals, Operations Contribution
Source: University of Minnesota Extension Center for Community Vitality, “Economic Contribution of Biobased Industrial Products Industry in Minnesota:2019”, November 13, 2020.
Between the two studies, the 2014 estimates came close to actual economic contributions made by the facilities utilizing the Bioincentive Program between 2015 and 2019. The 2019 study pointed to two main reasons for slightly lower annual economic contributions: “1) the companies reported lower general operating expenses than predicted and 2) the companies used a slightly different mix of corn versus wood as feedstock.”
The bioeconomy also improves energy security by reducing out of state energy imports, which grows the economy further because it keeps money in the state.
