South Dakota is investing in research and sites for business development, while North Dakota is broadening its core industries by welcoming IT startups and legends, and paving the way for unmanned aircraft systems (UAS) R&D.
“North Dakota has worked hard to diversify our economy and expand our targeted industries,” says Paul Lucy, director of economic development & finance for the North Dakota Department of Commerce.
Lucy cites ComDel Innovation as a case in point. The company recently signed the state’s first drone manufacturing agreement. “This is significant because it opens the door further on a new industry, which North Dakota is well-positioned to capture [in terms of] market share,” says Lucy. “Grand Forks County has come to terms with the United States Air Force on an enhanced use lease to develop approximately 220 acres (89 hectares) of underutilized land at the Grand Forks Air Force Base.”
The area will be developed into Grand Sky, the nation’s first UAS targeted business park. Developers anticipate building out as much as 1.2 million sq. ft. (111,480 sq. m.) of hangar, laboratory and office space. Earlier this summer, an agreement with Northrop Grumman was finalized for the company to become Grand Sky’s first anchor tenant.
“North Dakota leadership, at a local, state and federal level were very engaged and supportive of ComDel Innovation from the very first meeting, where the concept of forming a company was discussed,” says James Albrecht, president of ComDel Innovation.
Another UAS company hitting the skies is SkySkopes, a Grand Forks startup focused on using drones for infrastructure inspection. The company started in October 2014 with the intention to make hardware and software applications for UAS.
“We pivoted in December to fly the aircraft that had already been manufactured to help the effort of integrating UAS into the national airspace,” says Matthew Dunlevy, president and CEO. “We scouted talent at the University of North Dakota to create a motivated group of individuals with the common purpose of stimulating the UAS economy in North Dakota.”
Technology Knows No Bounds
Another industry sector seeing significant growth in the state is IT. “Microsoft, Amazon and Caterpillar could have expanded operations anywhere around the world,” says Lucy. “They all decided to do their expansion in North Dakota, even when we were experiencing a very tight labor market.”
Evolution1, headquartered in Fargo, was formed in 2011 through the merger of two industry leaders: Evolution Benefits, Inc. and Lighthouse1, LLC. As a platform producer the company provides services to numerous healthcare companies and financial institutions. “Because of our growth and expansion, and with each of our two Fargo facilities near capacity, we are moving forward with plans to upgrade both Fargo locations to one new location in West Fargo,” says Jeff Young, senior vice president and GM for Evolution1.
Microsoft also expanded into Fargo in 2011, with the acquisition of Great Plains Software. “There are a lot of benefits to being in the Midwest,” says Don Morton, site leader for Microsoft Great Plains. “Microsoft never had a significant R&D presence in the Midwest. In particular in the upper Midwest, the cost of doing business is much lower than the West Coast or the East Coast.”
In Fargo, the company hosts numerous support teams for nearly all Microsoft software. The company will continue to invest and put teams there. But something new is going on. “We’re putting a marketing and sales center in Fargo,” says Morton. “And we’re going to be expanding and recruiting an inside sales team. We’re going to be the first to plant these centers around the world, but Fargo is the first one.”
The Art of Attraction
South Dakota is making room for its first mega site. Foundation Park is the newest and largest of nine industrial parks created by the Sioux Falls Development Foundation since the 1970s. Currently, 140 companies and 13,000 employees call these parks home. Pat Costello, Commissioner of the Governor’s Office of Economic Development (GOED), lists the park first among some of the state’s recent economic wins.
“This unique partnership among the Sioux Falls Development Foundation, Governor’s Office of Economic Development (GOED), the City of Sioux Falls and Forward Sioux Falls is an 800-plus-acre (324-hectare) development park strategically located at the junction of two cross-country interstates,” Costello says.
In 2014, the US Chamber of Commerce Foundation ranked the state No. 1 in the nation for business climate. The state is a strong supporter of research, and the biotech sector is poised for growth. “Working with our universities, we are identifying ways to capitalize on our world-class faculty by commercializing the innovative research on our campuses,” says Costello.