Economic development pipeline strong headed toward 2018

This piece is presented by the Minnehaha County and Lincoln County Economic Development Associations.

As business development director for the Governor’s Office of Economic Development, Steve Watson has a comprehensive view of opportunities available to South Dakota communities large and small.

Steve Watson

Watson will be part of a four-person panel discussion focusing on developing for the future on Nov. 2 at the Holiday Inn City Centre in conjunction with the annual meeting of the Lincoln County and Minnehaha County Economic Development Associations.

Here, he shares his sense of the economic landscape in the counties and his thoughts on what’s next.

As you look at economic activity in the communities of Minnehaha and Lincoln counties this year, what stands out? What kind of business growth has been occurring?

Business growth in the region has spanned several industry sectors, including retail, warehousing, distribution, construction, value-added agriculture and advanced manufacturing. The growth has been existing businesses reinvesting in the region, as well as several newcomers. A few notable projects that were announced earlier this year in Minnehaha and Lincoln counties include Omega Liner Co.’s expansion to Canton, Win-Chill’s new cold-storage facility in Sioux Falls, SAB Biotherapeutics’ new “pharm” in Lincoln County, Carstensen Contracting’s plans to expand to Dell Rapids, Hendrix Genetics’ new commercial hatchery in Beresford and several exciting new retail developments taking place throughout the region.

The community of Worthing is one of many that has made recent public improvements.

Are you finding businesses are more open to locating in or near a community outside Sioux Falls? Why or why not?

The Sioux Falls metro area is dynamic and growing in all directions.  More and more primary employers are finding they can adequately staff their operations in communities 15, 30, even 60 miles from Sioux Falls. As the cost of setting up operations in Sioux Falls continues to increase relative to nearby alternatives, you will continue to find businesses looking for more economical options nearby that still deliver an exceptional operational environment for businesses and their employees.

Are there any industries you think are well-suited to these communities that might be under-represented currently?

Retail businesses will continue to expand outside Sioux Falls proper to serve a growing population, but we could always use more skilled, higher paying, primary job opportunities, particularly for our young people. I believe there are opportunities to attract and support businesses in the biosciences, fintech, advanced manufacturing and information technology. We have many unique attributes to support these industries in the region.

New retail has opened this year in Garretson.

What piece of advice do you have for communities that want to take a more active role in their economic development?

Understand the dynamics of your local workforce. What are their skills sets? In what occupations are you seeing underemployment? Are there workers in select occupations currently commuting outside your community or the region that would be better served staying a little closer to home? Really do your homework to understand these points. Many communities struggle to articulate the dynamics of their workforce and get passed over during the recruitment process in favor of other communities that are better positioned to address key workforce considerations.

Beyond your workforce assets, how prepared is your community for new development? Do you have a good handle on available properties, and what resources you can bring to bear when the right project comes around? How far are you willing to go as a city or development corporation to “win” without having buyer’s remorse?

What’s your sense of activity going into 2018? Are businesses becoming more cautious, or are they open to expansion?

If 2018 is anything close to what 2017 has been for our office, then the future looks bright! To date, our office has secured commitments from nearly 40 projects across the state totaling over $680 million in investment and over 1,100 new FTEs. We have just under $2 billion in the pipeline where we’re expecting investment decisions within the next three to six months. Many of these projects are in the biosciences, value-added ag and advanced manufacturing industries. There are some businesses that we’re dealing with who are concerned about the future of U.S. trade agreements, for example, but most we’re talking with feel very encouraged about their growth prospects, and I think we should too!

Economic development pipeline strong headed toward 2018

The head of business development for the state of South Dakota is waiting on decisions from $2 billion in new projects.

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