Mayo shields Rochester from recession's bite

To understand how important the Mayo Clinic is to Rochester, think about the city's downtown corridor, Second St. SW. At one end is St. Mary's Hospital, where Mayo began. Just over a mile in the other direction is the Mayo Civic Center. In between are Mayo office buildings, research facilities and a few restaurants.

People don't stop giving birth or having triple bypass surgery because there are signs of a recession. Former presidents still fly to the Mayo for hip surgery. That's what businesses like Fiksdal Flowers count on.

The owner, Gary Fiksdal says 80 percent of the Mayo's patients come from Iowa, Wisconsin and Minnesota. If they don't come, he doesn't sell flowers.

"It all depends, the number people who come from far away would rather go to their local hospitals and their local doctors because they don't have the expense of commuting, staying in hotels, eating out things like that," he says.

But he says, he's not too worried, unless gas prices keep going up or employment goes down in Rochester.

And for now, the Mayo workforce appears recession-proof.

The clinic is not considering lay-offs, according to Mike Mullen, Mayo's human resource director for recruitment strategies. Mullen points out that Fortune Magazine listed Mayo Clinic as one of its 100 Best Companies to Work for this year.

"Mayo is a large and stable environment, though some fluctuations in economy are felt. We tend not to make decisions on the very short term, we try to look at the long term," he says.

Mullen says Mayo tends to shift workers to different departments when it needs to downsize, rather than do lay-offs.

Mayo wouldn't release economic projections for this year. In 2006, the latest year available, Mayo's patient care in Rochester made up at least 30-percent of Rochester's $8 billion economy.

But Rochester's economy isn't hitched solely to Mayo.

IBM is Rochester's second largest employer with 4,400 workers. An IBM spokesperson said she had no indication whether the corporation would cut any positions in the next year. IBM has actually increased its ties to the Mayo Clinic and to the recently launched University of Minnesota-Rochester. That campus will focus on biotechnology.

Rochester has a trifecta of opportunities, says Gary Smith, president of Rochester Area Economic Development.

"What we like to tell people is if you have a desire or a need to be close to the University of Minnesota, IBM, the Mayo Clinic, all three world class, world-renowned institutions, there's only one place you can do that. That's in Rochester Minnesota," he says.

In 2007, when the state as a whole lost more jobs than it created, Rochester experienced a job growth of about one and a half percent.

Smith believes the presence of these large organizations will buffer entrepreneurs like John Shaffer from any financial virus that might come off a national recession.

Shaffer runs Lakota Innovations, a tech start-up, out of his Rochester kitchen. He opens up a black box the size of a book. It's a redundant computer server.

"The idea is to put a complete computer server inside a safe to protect it from environmental disasters: fire, flood," he explains.

The device would also save data after a hard drive crash. Shaffer says his product is like an insurance policy for data, so he thinks it will sell even in a tough market. But the economy isn't his biggest worry.

"There are a hundred headaches and right now I'm not selling anything, so I can only go up from zero," he says.

Up from zero is the sort of optimism Rochester's chamber of commerce likes to hear, and the sort much of the rest of the state can only hope for.

Rochester does show signs of Minnesota's common economic malady: construction and home sales are badly slumped. And the city's big companies can't buffer rising health or energy costs.

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