Mayor R.T. Rybak prepares to deliver the State of the City address at Augsburg College in Minneapolis on Tuesday, March 7, 2011. MPR Photo/Laura Yuen

Minneapolis Mayor R.T. Rybak said in order to grow jobs, government must cut down some of the regulatory barriers that impede businesses across the metro.

In his State of the City address Tuesday at Augsburg College, Rybak said city and business leaders around the region are working together find more uniform rules and permitting processes for businesses.

Rybak said the city must also help entrepreneurs attract talent by investing in neighborhoods and transit.

"We have to have a very, very honest conversation with ourselves about entrepreneurship in this community, because we are not, we are not, the entrepreneurship hotbed we think we are," Rybak said.

The mayor cited a recent report that placed Minnesota among five states with the lowest rates of entrepreneurial activity in the nation.

He also urged the community to emphasize the positive aspects of winter to attract businesses and tourism. That suggestion was mostly met by smiles.

Rybak also pushed for a change in the state's liquor law that would allow Surly Brewing Company to open a combined restaurant and brewery on the Minneapolis riverfront.

"Where they can not only brew their beer, but sell that. Beer is part of our history. Beer is part of our future," Rybak said.

But Minnesota's liquor lobby supports the current law, which prohibits large brewers from selling their beer on site.