From granite to germs, St. Cloud economy grows more diverse

In a modern-looking building tucked into an aging St. Cloud neighborhood, workers in white lab coats are busy making bugs.

More specifically, microorganisms — the kind that can make you sick.

"There's only probably three companies in the world that do the things we do," said Microbiologics CEO Brad Goskowicz. "We take biomaterials — bacterias, yeast, fungus, parasites, viruses, all kinds of microscopic critters. We freeze dry them and we put them into pure strains that have the exact amounts. Then, we ship them around the world for use in microbiology labs for quality control."

Pharmaceutical and cosmetic companies, hospitals and food processors in 140 countries use those microorganisms to test their facilities for contaminants.

"If you are Gold'n Plump and you're producing chicken and chicken products, you want to make sure you don't have salmonella in your chicken," Goskowicz said. "So that's why they'll buy a pure strain of salmonella from Microbiologics, put that into the system. And that way they know they can find it, they can identify it, and then get rid of it."

The company has grown from 55 employees eight years ago to 130 today. Goskowicz says they're adding a 35,000 square foot expansion and plan to add at least 35 more workers.

Microbiology is a big leap from St. Cloud's past, when the local economy was dominated by manufacturing and mining. The granite carved out of huge quarries here for more than a century gave St. Cloud its moniker, the Granite City.

The other major industry was agriculture — specifically, dairy farming.

"We were the butter capital of the United States," said Louis Johnston, economics professor at the College of St. Benedict and St. John's University. "Anything to do with dairy — making ice cream, making milk, making butter, making cheese. Those were industries that were associated either with St. Cloud or the broader Stearns County area."

Along with farming, other industries began to spring up. King Banaian, who heads the school of public affairs at St. Cloud State University, said printing was an important one.

"We didn't just print paper," Banaian said. "We printed paper that had important bank forms on them. We printed paper that was on glossy paper so we could print the great catalogs, the mail order catalogs that you used to get at the house when I was a kid growing up."

Manufacturing is still important to the region and employs a greater share of the St. Cloud workforce than the average U.S. city. But that idea of adding value to products is even more important today, Banaian said.

"So if I have a piece of granite and I can make a headstone out of it, maybe I can make $1,000," he said. "But if I can make a beautiful polished countertop that can go in someone's house, that same amount of stone maybe has value now of $3,000."

Today, St. Cloud's economy is booming. The average annual unemployment rate last year was 3.8 percent, down from a peak of nearly 8 percent in 2009 during the recession.

"I'd say we're completely recovered as far as jobs go," said Luke Greiner, a regional labor market analyst for the Department of Employment and Economic Development. "The economy keeps expanding, and it's expanding somewhat different than it was growing before."

Greiner said workers are in demand, from retail jobs to high-skill positions in health care and technology. The sector adding the most jobs is ambulatory health care, including medical clinics, surgery centers and eye doctors, he said.

The demand for workers is driving up pay, Greiner said, which is good news for a region that's struggled with low wages and poverty.

"I've seen some pretty substantial increases," he said. "I'm not talking 10 percent, but more like 50 percent increases in a single shot, which is impressive."

Despite these positive trends, St. Cloud still faces challenges, including the changing labor force, Johnston said.

"We have a large immigrant population especially from east Africa, especially from Somalia," he said. "How is the city, how is the region going to manage that?"

Those immigrants could help fill the area's need for workers if they follow traditional career paths, Johnston said. But he said they also bring an entrepreneurial spirit to the community.

"If you go in St. Cloud, there's a whole area around 3rd Street and 33rd Avenue that is just bustling with businesses and professions and it's all coming right out of the immigrant community," Johnston said. "And that could really change the face of St. Cloud's economy over the next 20 years."

Banaian also sees a challenge with St. Cloud's retail industry as consumers change their shopping habits and move toward buying online.

"It's tougher to get stores to buy space in the mall, because the mall is not where people are going," he said. "They're instead using their phones to order things. I don't see retail stores getting any stronger."

Economists say traditional industries like agriculture and manufacturing won't disappear from St. Cloud's economy, but they will look different in the future.

"We'll still have mills here. We'll still have dairy producers here," Banaian said. "But will they be the place where we hire the next 1,000 workers? No, because they're highly productive, they're technologically very advanced and they're able to do a whole lot with not a whole lot of labor."

Goskowicz said the growing diversity of the St. Cloud economy is a positive trend.

"The more diversified you have your economy into education, health care, manufacturing and all these pieces, I think the more of a steady economic base you have to grow on," he said. "The lows aren't as low, maybe the highs aren't as high, but you have good, steady growth that you can depend on."