Minnesota begins 2012 in much the same shape it began 2011: Slowly repairing the ravages of the Great Recession, brandishing an unemployment rate that suggests the state is doing better than the nation as a whole.

It is a small comfort -- and misleading at that.

Minnesota's economy was stumbling before the recession hit. For more than two decades, the state had added jobs at a faster rate than the nation as a whole, but job growth slowed beginning in 2000. Minnesota slipped to average in some years, and lagged in most others.

What went wrong?

That question prompted a lot of arguments about the role of taxes, regulations and the appropriate level of public investments in education and infrastructure. Because it was a debate fought largely along ideological lines, it went mostly nowhere.

So, here's my wish for the New Year: That policymakers and business interests finally hammer out a coherent, long-term strategy that puts the state back on a growth trajectory like the one experienced from the late 1970s through much of the '90s.

During much of that time, Minnesota added jobs at a faster rate than the United States as a whole. In many of those years, the difference was startlingly large.

One window into how dynamic the state's economy was can be found in an analysis of Minnesota's Fortune 500 companies by J. Myles Shaver, a professor at the University of Minnesota's Carlson School of Management.

The first compilation of Fortune 500 companies in 1955 included 11 firms based in Minnesota. By 2011 there were 20. But the state didn't just add nine Fortune 500 companies in 46 years; we added 40 and lost 31. And of the 20 on the list in 2011, only three companies were holdovers from 1955.

Shaver's analysis shows that Minnesota benefits little from "importing" headquarters companies or jobs. Historically, Minnesota has been a place where new companies like UnitedHealth Group and St. Jude Medical can grow big, while older companies like 3M and Cargill are able to sustain and reinvent themselves.

That means the state needs to make sure it has the right qualities to nurture both start-ups and established companies.

"Business formation is vital" to a region's long-term prosperity, Shaver acknowledged. At the same time, though, "there are different concerns in pushing a business from formation to a going concern -- and then pushing it up and past the tens or hundreds of millions in sales."

Why was Minnesota able to do this so well in the past?

Shaver said he needs to do more research before venturing any conclusions. "One of my goals in doing this is to try and move beyond a set of pet explanations that we all have and better ground this in the data," he said.

Census data provides some clues to the mystery of job formation in Minnesota. For example, the state has traditionally relied on older, more established firms to provide the bulk of its job creation. In 2007, more than half of the net new jobs created in Minnesota came from firms at least 30 years old. Contrast that with California, which got about 17 percent of its net new jobs from older companies.

Here's what we know about older firms: They don't grow as rapidly as younger firms, and those that compete globally are more likely to add jobs in emerging markets abroad.

We also know that Minnesota's share of venture capital funding has been sliding over the years, and that it's much tougher for young companies to raise money through an initial public offering of stock -- two factors that also suppress new business formation and job creation.

Shaver's analysis of Fortune 500 movement is encouraging. Less so is how much the composition of publicly held companies in Minnesota changed between 1995 and 2010. Last year, Uroplasty, the 100th-largest publicly held company in the state, had annual revenue of less than $13 million. In 1995, there were 172 publicly traded companies in Minnesota larger than Uroplasty.

In 1995, almost 50 Minnesota companies booked sales between $100 million and $500 million. Last year, there were only 20.

Ready for another depressing statistic? In 2010, nine publicly held Minnesota companies reported revenue between $30 million and $50 million -- one-fourth the number of nonprofits that did.

Many of the midsized companies on that 1995 list don't exist anymore. They moved, went out of business, were sold or went private.

That's to be expected, as would the emergence of companies to replace them.

But that's not happening.

ericw@startribune.com • 612-673-1736