Manufacturing Section 2025 | Page 3

pressnews. com Manufacturing • Thursday, October 23, 2025 Page 3

Economist urges innovation as key to manufacturing’ s future

Monticello breakfast spotlights optimism and adaptation amid industry headwinds

By LAUREN FLAUM Monticello Times

( PHOTO BY LAUREN FLAUM)

Economist King Banaian delivers the keynote address at Monticello’ s annual Manufacturers Appreciation Breakfast on Oct. 10 at the Monticello Community Center. Banaian spoke about innovation, productivity and the“ triple challenge” facing today’ s manufacturers.

Manufacturers across central Minnesota are confronting with what economist King Banaian calls the“ triple challenge”— a convergence of higher interest rates, rising tariffs and a tightening labor pool.

Despite those pressures, Banaian said the outlook for the region’ s manufacturing sector remains strong— so long as companies continue to invest in innovation.

Banaian, professor of economics and director of the Center for Policy Research and Community Engagement at St. Cloud State University, delivered the keynote address on Oct. 10 at Monticello’ s annual Manufacturers Appreciation Breakfast, hosted by the city’ s Industrial and Economic Development Committee at the Monticello Community Center.

The breakfast has been held for roughly 20 years as a way to honor the community’ s industrial and manufacturing firms for their contributions through creativity, ingenuity, productivity and product innovation.

The event has become a local tradition— one that organizers say highlights Monticello’ s manufacturing roots and celebrates the people behind its continued growth.

“ This is the only event I know of like this— where a community truly celebrates its manufacturers,” Banaian said, praising the city for recognizing the industry’ s outsized role in the region’ s economy.

With an energetic delivery, quick humor and a knack for turning data into plain talk, Banaian connected easily with the audience of business leaders, educators and local officials as he broke down what he called the“ triple challenge” facing manufacturers across the U. S.— a national labor shortage, costly tariffs and stubbornly high rates that have slowed business investment.

Even with those pressures, he said, central Minnesota enjoys advantages that many regions don’ t.

“ Within 15 minutes of this room, you have a story that’ s different from most of the state,” he said.“ People want to live here— close to the Twin Cities, but not in the Twin Cities. That gives you a leg up.”

While much of Minnesota is expected to see declining labor supply over the next decade, Banaian said Wright and Sherburne counties continue to attract workers. The area’ s mix of opportunity, affordability and access to metro markets, he added, gives local manufacturers a foundation for growth that others may lack.

That demographic edge, however, won’ t be enough on its own. Banaian emphasized that success in the decade ahead will depend on how companies respond to rising costs, global competition and evolving policies.

Productivity as path forward

Shifting from warning to encouragement, Banaian told the audience the answer lies not in avoiding change, but in how manufacturers respond to it.

“ The key is productivity,” he said.“ Productivity isn’ t a choice— it’ s the only escape route you really have.”

He noted that manufacturing productivity has risen sharply in recent years, outpacing most other industries. Even as workforce growth has slowed, output per worker continues to climb— evidence, he said, that innovation and process improvements are already paying off.

He urged companies to view automation not as a threat to jobs but as a tool that complements human workers— boosting output, stability and competitiveness.

“ The answer isn’ t to automate people out of jobs,” he said.“ It’ s

Minnesota manufacturing by the numbers

• 8,500 + manufacturers statewide

• 331,000 employed( 30 % above national average)

• $ 58.8 billion annual GDP contribution

• $ 83,280 average wage( 12 % above statewide)

• 6,100 + manufacturing jobs in Wright County

Economist King Banaian compared the manufacturing economy to a threelegged stool— supported by labor, investment and innovation— with each leg essential to balance and growth.( Graphic created with ChatGPT)

to redesign work so automation makes people better at what they do— to expand output, stabilize costs and help workers earn more.”

Lightening the tone, Banaian joked about the distinction between complement and compliment.

“ When I talk about automation complementing people, I mean complement with an‘ e,’ not an‘ i,’” he said.

See Event, Page 10