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DAUGAARD: State focuses on homegrown businesses

Gov. Dennis Daugaard

Seth Tupper made good points in his May 11 column on economic development, and I read it with interest. I'm writing to add a few thoughts to complement his.

I agree with Seth that the decision by Verifications Inc. to leave Mitchell is a disappointment. Pat Costello, commissioner of the Governor's Office of Economic Development (GOED), and I traveled to Minneapolis to visit with Verifications leadership last year, to encourage growth in South Dakota, and I regret that we are losing rather than gaining Verifications' jobs. That is truly an unhappy result.

I also agree with Seth that economic development efforts cannot be primarily aimed at out-of-state companies, whose leadership has no ties to South Dakota. We must focus most of our efforts on companies already in South Dakota, and especially on those homegrown companies whose leadership has personal ties here. Our state efforts are aligned with this belief. Of course, we cannot ignore opportunities to attract outside companies into our state. Citibank was an outsider whose move to Sioux Falls spawned a credit card industry that has grown manyfold. There are countless other examples. Still, our best bet is with those already in South Dakota.

Since I took office last year, GOED has supported four business expansions in Mitchell -- at CHR Solutions, Innovative Systems, Navigant and AKG. I personally visited Innovative Systems last June, when Mitchell was South Dakota's "Capital for a Day," and I have also personally visited a number of other Mitchell businesses including AKG, Klock Werks, Muth Electric, Tessiers and Dakota Pump. Beyond that, I traveled to Minneapolis last year to meet with the leadership of Twin City Fan, which has a plant in Mitchell.

In total, Lt. Governor Matt Michels, GOED staff and I have visited 21 Mitchell businesses to learn about their companies and discuss how the state can help them grow and prosper in Mitchell.

Seth is right that it is often the new company that receives public attention, but the state's attention is firmly focused on expansion of in-state companies. In 2011, GOED assisted 61 companies with expansions in South Dakota. Of those, 73 percent were existing South Dakota companies. I know that South Dakota's best economic development opportunities are those companies that are already here, and they have received the majority of our attention.

At the same time, we, of course, continue to invite new companies to come to South Dakota. South Dakota's balanced budget, low taxes and sensible regulation have become increasingly attractive as many other states have increased taxes in the face of mounting deficits.

Last year, I spoke at a regional workforce conference in Mitchell. The result of that conference is the South Dakota WINS initiative, which is a package of more than 20 programs to build South Dakota's workforce needs.

One of the most important aspects of SD WINS is an emphasis on welding programs, to address the shortage of welders that has become a problem for Mitchell employers like Trail King. I authorized a $582,180 Future Fund grant to Mitchell Technical Institute last year to create a new welding program, and a $107,500 Community Development Block Grant to Mitchell for a welding program primarily aimed at high school students. Those efforts will help Trail King and many other businesses in the Mitchell area continue to grow.

Every time a business closes its doors, it is a disappointment -- for its employees, its community and for South Dakota. Economic development is never a sure thing -- some businesses make it and others don't. I'm confident, however, that our efforts have brought more jobs to Mitchell and to South Dakota.

Mitchell has a lot to be proud of.