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Friday, June 4, 2010

Research, Marketing, and Economic Development in the I-29 Corridor

That Sioux Falls paper reports that the I-29 Regional Development Coalition (of which Madison is a taxpayer-supported member) is starting to get the return on its $118K investment. Regional Technology Strategies of North Carolina presented findings at DSU Wednesday. RTS's two big recommendations pretty much confirm what various local economic developers were already thinking:
  1. Boost university research.
  2. Market the region.
Boosting university research sounds great, but RTS CEO Trent Williams tells us that to achieve that goal (Brenda Wade Schmidt's words), "the state universities need to hire scientists." Oops: was that really the right thing to say when Republicans and Democrats alike are making political hay with promises to cut state government? Remember, a lot of the growth in state government under the Rounds/Daugaard administration has come from the Board of Regents hiring more researchers—including me—to do exactly what RTS is recommending. Candidates, are you sure you want to reverse that process?

Now don't let Dwaine Chapel get on the committee working on #2: he'll put up banners all along I-29. RTS proposes at least creating a website to advertise our South Dakota's urbane East Coast. But continuing the conversation about community branding, Mike Knutson reminds us that advertising is the price we pay for being unoriginal. Create a vibrant culture, strengthen your education system, and energize your local economies, and those advantages will market themselves.

Think of it this way: if you have $200,000, you could hire a scientist and buy a regional ad campaign, or you could hire two scientists. Which do you think will do more concrete good for the community, or in this case, the Corridor?

Down at the south end of the I-29 Corridor, Rebecca Terk is engaging her readers in a substantial discussion of local economic development in Vermillion. She notes with some chagrin that the community's current economic development campaign, Vermillion NOW!, is marked by the same sort of pay-to-play strategy that dictates the Forward Madison campaign: you buy your way into the decision-making process with donations. If economic development groups really want to succeed, they should involve more community members in ways that don't hinge on money. There are lots of community members, from Vermillion and Madison to Sioux Falls, Brookings, and Watertown, who don't have deep pockets but do have deep ideas, not to mention time and sweat they'd be willing to contribute.

The best community development involves everyone in the community, not just the folks with money.


  1. Just a couple of comments about university research in SD, since that's my job.

    First, it's not unusual for faculty members to be assigned 4 classes to teach per semester. It's impossible to write grants and administrate a research program with that teaching load. If the state is at all serious about encouraging research it needs to cut teaching loads to 2 courses per semester for faculty members that wish to conduct research.

    Secondly, the state provides little to no support for research scientists (full disclose: I am one). For example, my salary and overhead is entirely paid for by research grants from non-state sources. In fact, externally funded research scientists are a net budget gain. In addition to my salary, we pay a comically massive overhead rate which gets put back into the system (the state overhead rate is higher than most start up companies! WOW, funny and sad at the same time!). And let's not forget that the work product of research scientist (invention disclosure which lead to patents, grant proposals, and papers) enhance the state's competitiveness.

  2. Now, a couple of comments about "marketing".

    First, how does marketing convince people to move to an area? As far as I can tell, it basically comes down to economics right now (and for the foreseeable future). If there are good, available jobs in an area people move to that area. Telling people about the nice lakes and small town charms doesn't convince people to move there.

    Now, let's assume for a moment that I'm correct and people move to an area primarily for employment opportunities. How does an area bring in more jobs? In my opinion, you need to have a closer. You need to have a person that is well connected, motivated, and can close deals. Such individuals are available but they are not cheap! You need to setup a pay structure that has great incentives for bringing in jobs to the area.

    But, I fear that this is where SD constantly fails. To get the right type of person, a closer, we would need to offer a salary of at least $500k if the person hit all of their incentives marks. This is what SD will never do. The majority will say that such pay is too much (not realizing that for $500k we just pulled in $1 million in new tax revenue and vastly larger secondary impacts) and that it shouldn't cost more than $50k to do that job.

    But of course, economic development isn't like brick laying. It isn't something that you can spend x time at and get y results with any random person. Unfortunately, we look at it like brick laying and pay accordingly.

  3. Could someone remind me (without too much spin) the role Mayor Munsterman had in the development (or obstruction) of Brookings Utilities acquistion of the Sprint deal?

  4. Tony, I agree on the research-teaching balance. Teaching a full load and doing quality research just don't go together. Assign a prof that double load, and either one or both assignments will suffer. Research isn't just a sideline or an "extra duty as assigned" akin to the ticket-taking duties we assign our high school teachers.

    And you're right: it would be amusing to watch the state try to combine its rhetoric about the importance of research with the rhetoric from some Republican candidates about the need to cut our dependence on earmarks and other federal money. Our research community would not exist if it weren't for money from Washington. When will South Dakota ever start putting its money where its mouth is?

    As for marketing, I too would like to see some reliable research on the extent to which community marketing plays a role in drawing new business and residents. Anyone have surveys on that? In particular, do we have any independent research not conducted or funded by economic development corporations measuring this phenomenon?

    [And Larry: Munsterman on Sprint? I'm out of the loop on that one. Anyone have background?]


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