Minnesota-Innovation
Minnesota is a state fueled by its large
innovative manufacturing industry. Manufacturing software,
medical devices, and other key industries in the state conduct
research activities that typically qualify for R&D tax
credits.
Minnesota R&D Tax
Credit
Enacted in 1981, the federal Research and
Development (R&D) Tax Credit allows a credit of up to 13
percent of eligible spending for new and improved products and
processes. Qualified research must meet the following four
criteria:
- New or improved
products, processes, or software
- Technological
in nature
- Elimination of
uncertainty
- Process of
experimentation
Eligible costs include employee wages, cost of supplies, cost
of testing, contract research expenses, and costs associated
with developing a patent. On January 2, 2013, President Obama
signed the bill extending the R&D Tax Credit for 2012 and
2013 tax years. The consensus is that it will most
likely either be extended or made permanent. Minnesota also
has a Research Activities Credit which is equal to 10% of the
first $2 million of the excess of the Qualified Research
Expenditures over the base amount, and 2.5% on all such excess
expenses over $2 million.
Minnesota
Manufacturing
Minnesota's manufacturing industry is one
of Minnesota's key industries. It supports more than 292,000
jobs with an average annual wage of over $56,000 per
employee. Manufacturing contributes $37 billion to
the state economy and represents 15 percent of the Minnesota’s
gross domestic product. The largest numbers of people are
employed in food manufacturing, computers and electronics,
fabricated metal, machinery, and printing.
Medical device businesses and renewable energy businesses are
notable innovation businesses within Minnesota's manufacturing
industry. These companies are innovation drivers in the state,
with medical device companies generating a large share of
patents between 2007 and 2011.
University of
Minnesota
The University of Minnesota is a key driver
in innovation within the state. It has a proposed FY14
research budget of $600 million, representing 16.5% of its
total budget. Many of University of Minnesota's innovations
have been licensed by companies operating within the state -
particularly Honeywell, Medtronic and 3M.
Minnesota Incubators
and Accelerators
Minnesota maintains an Office for
Technology Communication (OTC) for the purpose of connecting
entrepreneurs to innovations for evaluation as commercial
viability, as well as finding if the technology is new enough
to file a patent or an intellectual property disclosure. The
OTC also runs its own incubator.
The University of Minnesota's Minnesota Innovation
Partnerships exists to transform discoveries into innovative
solutions and was designed to improve access to
University-developed technology while reducing risks and costs
associated with licensing university Intellectual property and
sponsoring research.
The program has garnered positive
response, including praise from CEO Dennis Sellke of
International Cardio Corp:
"International Cardio Corporation
has been collaborating with the University of Minnesota for
over three years and it is great to see these MN-IP program
actions to be even more open for business. Published pricing
and Minnesota discounts should lead to quicker transactions
to the benefit of the university and their commercial
partners.”
Minnesota also has University
Enterprise Laboratories, Inc. (UEL) - which is a collaborative
research center offering lab and office space to early-stage
bioscience and biotechnology companies. One example of a
successful company coming out of UEL is current tenant Cima
NanoTech in St. Paul, who make transparent conductive
nanoparticle films and materials for many types of
electronics. Cima NanoTech's work have produced
both thin and flexible and super-thick glass displays that are
also touch-enabled for user inputs and resistant to the
elements.
The Mayo Clinic Center
for Innovation
The Mayo Clinic Center for Innovation works
to transform the delivery and experience of health care by
acceleration innovations through design thinking - using
problem solving and creative thinking to evaluate and improve
experiences. The center for innovation has had a large
part in formalizing the innovation process and focusing
innovations on serving patients. The center does this through
several projects such as Project RED, which innovates new ways
to deliver dialysis to patients; Exergaming, which helps the
elderly exercise through games; eConsults, which help people
get consultations over distance; and telemedicine, which also
helps people receive healthcare over distance. The center also
has several external partners including MIT, Microsoft, IBM,
Purdue University and Cisco.
Conclusion
Fueled by innovations grown in its
universities and accelerated by its incubators, companies
operating in Minnesota have access to innovations necessary to
carry out research activities and may qualify for R&D tax
credits.