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2016 Regional Report: The Midwest

Governor Pence’s $1 billion plan prioritizes entrepreneurship and innovation.

“Columbus is like Austin was 10 years ago,” said Brian Billingsley, CEO of Klarna in North America, a payment-systems company. A transfer from New York and Stockholm, Billingsley finds the lower cost of living, local arts and culture scene, and vibrant downtown help sell the company to recruits.

A convenient benefit: Columbus is a popular test market for consumer product and service companies. Like many, he finds Ohio’s strength is the middle market. According to Ohio State University’s Fischer College of Business, mid-sized companies’ revenues grew nearly 11 percent between May 2015 and 2016, overshadowing the 6.3 percent national average.


Wisconsin “has benefited from Right to Work legislation,” said site selector Cook. “That gets them looks they didn’t used to get.”

But the looks may not lead to deals. Insufficient job creation incentives, a weak entrepreneurial culture and misguided tax policies have produced a “shrinking middle class” (Pew Research), created a “shrinking manufacturing sector” (Think Progress) and turned the Badger State into “an economic basket case,” as the Wisconsin Gazette put it.

Some beg to differ. Noah Williams, professor of economics at the University of Wisconsin-Madison, argued that “the state of the economy in Wisconsin is strong and improving” in an editorial for the Milwaukee Journal-Sentinel.

Wisconsin’s middling 1.6 percent increase from May 2015 through May 2016 trailed Michigan, Indiana and Ohio, but outpaced Minnesota, Illinois and Iowa in the highly competitive Midwest job-creation market. Filling jobs can be more challenging than creating them.

“Our primary concern is access to talent,” said Jerry Murphy, executive director of the New North, an economic development organization serving northeast Wisconsin. Worker recruitment “is on everyone’s mind.”


Well-trained workers—attracting them and retaining them—looms as the primary business challenge for Iowa employers. Nearly two out of three bosses polled by the Iowa Business Council this summer ranked staffing as their top priority.

Hawkeye cities like Des Moines and Iowa City “have their acts together” in terms of attracting business, said site selector Cook. Des Moines and other cities with vibrant downtowns, workplay-life appeal and a growing employer base are appealing to Millennials, a key job recruitment attribute, said Gregory Burkart, a specialist in negotiating incentive packages and a managing director of Duff and Phelps’ Detroit office.

“Companies choose to expand here because, number one, we have a very educated, productive workforce and second, the cost of doing business here is about 18 percent below the national average,” said David Maahs, executive vice president of the Greater Des Moines Partnership.

Recent expansions and new construction include buildings put up by Merchants Bonding, Holmes Murphy and Mercer Consulting and LightEdge Solutions.


SOUTH DAKOTA / Plans are under way for "megasite" Foundation Park
SOUTH DAKOTA / Plans are under way for “megasite” Foundation Park

Last year’s robust third-quarter propelled South Dakota into the spotlight as the nation’s fastest-growing state. That ranking disappeared the next quarter, but the brief moment in the sun energized local business owners. Four out of five employers saw economic growth ahead over the next 12 months, according to a Minneapolis Fed poll last winter, signaling the rosiest outlook in the Great Plains.

Earlier this year, the state’s first-quarter 2.6 percent job growth rate led the region amidst labor market contraction; unemployment dropped to a barely-there, lowest-in-U.S. 2.5 percent. Business leaders agree the region must begin training and recruiting significant numbers of young workers.

Regionally, the Sioux Falls metro area keeps growing, as younger workers relocate and fill jobs in healthcare, financial services and biotech.

Earlier this year, grading and roadwork began on Foundation Park, an ambitious 800acre site aimed at high-tech, finance and other industries developed by a public-private partnership joining employers, municipal and state officials. Craig Anderson, CEO of DataSync, a local software engineering firm, plans to move in as soon as the park opens.

Anderson returned to his South Dakota roots after building his career in Silicon Valley; he calls Foundation Park the “latest in a series of initiatives that will stimulate the region’s economy by helping businesses grow.”


Thanks to the rigs pumping out over 1 billion gallons a day from the Bakken oil patch, North Dakota possessed the nation’s fastest growing economy through the early 20-teens. Since 2014, the bottom has fallen out of the oil barrel, erasing over 6,300 mining and natural resources jobs.

North Dakota’s 11.4 percent GDP decline last year was the biggest statewide drop in the U.S. In Williston, a quintessential oil-boom city located near the patch’s center, nearly one-sixth of the city’s population has recently departed.

The economic carnage has decimated municipal and county budgets, a pattern playing out in dozens of small and mid-sized cities. In Bismarck, the governor and legislators face a looming billion-dollar deficit. Al Anderson, Commerce Department commissioner, says most employers will wait out the cycle.

Until then, “We emphasize keeping the business environment friendly, keeping taxes low and balancing regulatory restraints with the needs of economic development.” His office continues to foster entrepreneurship and encourage exporting, he added.

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