One job that could lead to more: Hiring economic development staff
Clark School Superintendent Brian Heupel had initiated the meeting, which pulled together the members of six organizations in the community to talk about how they might work together to help the community grow.
“It seems as if at some point, we as a community need a development director to try and move the community forward,” Heupel said. The groups formed a task force to research how to organize for, fund, and hire for such a position, which is due to issue their report March 1.
Many other communities in the Dakotas have also decided having staff dedicated to economic development is a priority. The North Dakota Department of Commerce website lists 83 economic development offices with paid personnel. Of the 175 economic development offices on a list maintained by the South Dakota Governor’s Office of Economic Development, 23 percent of them have paid economic development staff.
Hiring an economic development director can bring definite benefits to the community, according to several economic development leaders in North and South Dakota. But they stressed that it’s not a silver bullet, and communities should realize that this step needs to be part of a larger strategic process if it’s to be successful.
Benefits of hiring
One good outcome of hiring an economic development director is that it puts forth a vision of progress for the community. It shows the people in the community and in the region that economic development is a priority, said Paula Jensen, funds development director for NESDCAP, NESDEC and GROW South Dakota.
“It puts that economic development mindset in your head all the time, instead of always shoving it to the back burner,” Jensen said.
Establishing a paid position for economic development can also help communities avoid one of their perpetual problems: volunteer burnout. When only one or two people are working on economic development, if they burn out, “all work ceases,” Jensen said. If instead a paid economic development person leaves the job, a structure is in place to hire someone else, and the torch can be passed on more easily.
The move to hire someone can also serve as a catalyst to focus economic development efforts. Glacial Lakes Area Development, for example, brought together development groups in Britton, Pierpont, Veblen, Eden, Lake City, and Langford and strengthened and focused their efforts, Jensen said. Moreover, GLAD now has the financial support of all those communities (as well as from Marshall County, grants, private donations, and fees for services), ensuring that their efforts will continue well into the future.
Work focus varies greatly
Many actions can fall into the category of economic development, and communities generally focus on the parts of economic development that are more important to them. It’s important to have the goals of the organization in mind before taking the step to hire someone, Jensen said.
Recruiting businesses from elsewhere is not the main focus for most economic development groups in the area, though Webster is a notable exception. With new energy from executive director Nick Fosheim, hired at the end of 2010, the Webster Area Development Corporation has hit the gas on an effort to bring new businesses to the community. The corporation has connected with a Winnipeg, Canada, interest that may relocate to Webster, and facilitated the sale of the Roslyn school with a Minneapolis-based company. Most recently representatives attended the SHOT show in Las Vegas to connect with hunting and fishing companies, which may identify with the outdoor recreation culture in the Dakotas.
“We’ve laid the foundation for some exciting work in 2012,” Fosheim said at the WADC annual meeting in January.
For the most part, economic development groups are focused on helping the businesses that are already in the community, Jensen said.
Scott Amundsen, executive director of GLAD, makes sure that businesses know about the services the organization offers. A revolving loan fund is one of GLAD’s success stories: To date, the fund has loaned $200,000 to nine different small businesses in the GLAD area, which has resulted in more than 50 jobs either created or saved. GLAD has also helped businesses with succession plans when the current business owner is ready to move on, or helped with hiring if the business needs to expand.
Money for the long haul
Groups that want to hire an economic development director often think of grants first as a source of funding, and NESDEC has helped several communities receive USDA Rural Development money for economic development work. But Jensen warns that it’s not like winning the lottery — they won’t be set for life.
“Grants are great, but you can’t survive on them and you can’t depend on them to be there,” Jensen said. “A lot of communities just think … a grant’s going to be their saving grace, and it’s not.”
Instead, successful economic development efforts generally seek funding from local sources, according to Paul Lucy, Director of the Economic Development & Finance Division of the North Dakota Department of Commerce.
These can include:
- Special sales tax or mill levy property tax
- Existing county or city budgets
- private support: local utilities, banks or other businesses
- shareholders (community member donations)
Typically, funding comes from a combination of these, or, better yet, from all of them. “It has to be community, business, county, city — I think you have to have all of those pieces,” Jensen said.
If a community is trying to find the means to hire an economic development director, it may help to look down the county road for allies.
By thinking regionally, “you can maximize limited resources,” Lucy said. “If you’re looking a number of rural communities that have some commonality in terms of industry sectors or transportation or just regional common interests or common attributes, it might make some sense to do that.”
Commissioner J. Pat Costello of the S.D. Governor’s Office of Economic Development pointed out that regional and community economic development efforts feed off one another.
“In general, what’s good for a community is also good for the region and vice-versa,” Costello said. “The more jobs in any given area, the more money that gets recycled in the community and surrounding communities.”
But how can the group ensure that the director is truly working for the good of all the communities involved? Won’t the county seat towns always fight for businesses to come there, for example?
The key, Lucy said, is to make sure the structure and purpose of the organization are very clear, that all communities are represented in the decision-making process, and that there’s an understanding of open dialogue between members.
Using the example of the state of North Dakota’s economic development efforts, Lucy said they try to present the attributes of the various communities in the state, and then it’s up to the communities to sell themselves to the business. The business then makes the final decision of where it fits best.
Jensen said that economic development groups can also share resources where they don’t compete — in sponsoring customer service trainings, for example.
Costello said groups can benefit by sharing human and financial resources. Costello said the GOED provides co-op programs and promotes co-op opportunities among South Dakota communities, such as cost-sharing programs for industry trade shows.
“As a result, more communities can afford to attend the trade shows and get the collective ‘South Dakota’ message out,” Costello said.
Once organizations have started working together, other partnerships start to emerge. If a business looks at Britton and sees that it’s not going to be a good fit, those in Britton might send the business to look at Day County.
“We have seen it happen,” Jensen said. “The mindset is starting to change. We’re not all so independent, because we know we can’t be.”
NESDEC is heading up a new regional approach to community development that will be called Prairie Gateway. Its main presence will be a single hub website that will have links to all of the economic development groups in the region. This way, all of them, no matter what size, will be able to have an online presence (though there will be a fee to participate). Online education applications on economic development topics are also part of the plan.
“We’re going to be working for the best-case scenario for all involved,” Jensen said.
The new Prairie Gateway website should launch in June. For more information about the program, contact the NESDEC office.
It might not be easy to think regionally, but it is necessary if groups are going to be effective, said Amundson of GLAD.
“I really think that rural communities need to rely on strong partnerships to broaden the swath of what we’re able to do,” stressed Amundson. “We need to focus on the greater good of the region.”
Reporting by Doug Card, Britton Journal; Bill Krikac, Clark County Courier; Garrick Moritz, Faulk County Record; George Thompson and John Suhr, Reporter & Farmer
Are you ready to hire an economic development director?
Consider these words of wisdom before you begin:
- It will take longer than you think. It’s a two- or three-year process, not a six-month process, said Paula Jensen of NESDEC, and you need a pretty dedicated group of people who can carry this process through.
- Don’t look to the usual suspects when you are ready to hire. “You have to be visionary in economic development,” Jensen said. Visionary outlooks have likely been forced out of the town boards in many small towns because of the stresses they are under — it is hard to think big and long-term when hopping from one crisis to another.
- A big-city expert may not be the answer, either. It is important that an economic development director both knows the community and is committed to the community. It’s not easy to ensure that if a person is hired from elsewhere, no matter what credentials come with him or her.
- Consider luring someone back. Hiring someone who grew up in the community but has since moved away achieves two objectives: Ensuring that the person in the position knows and is committed to the community, and bringing in another family. Two local examples fit that bill: Scott Amundsen, executive director of GLAD, is a Langford native and returned to the area to become the GLAD director. Nick Fosheim graduated from Webster High School and came back at the end of 2010 become Executive Director of the Webster Area Development Corporation.
- Find someone with tenacity who believes in your mission. The job is not easy, but “rural communities really do have a lot of opportunities and potential,” said Paul Lucy of the N.D. Chamber of Commerce. “Having an individual that is aggressive and isn’t afraid to be told no or isn’t afraid to bump up against a brick wall from time to time — there’s benefits that communities can reap from having somebody working to that end.”
Dakota Rising another option
Not ready to hire yet? That’s OK. There are other ways to enhance your community’s economic development efforts.
One of those is the Dakota Rising program, sponsored by South Dakota Rural Enterprise, which “strategically partners with local communities to invigorate rural entrepreneurs and their enterprises,” according to their website.
The Glacial Lakes area is one of the sites selected for the program, but so is Faulkton, where economic development is an entirely volunteer effort. Two Faulkton businesses were accepted as Dakota Rising Fellows in 2011, and seven more are applying to take part in 2012. Fellows are mentored in ways to take their business to the next level and also receive grant funding to help jumpstart their new business plan.
Interested communities can learn more about the Dakota Rising program at dakotarising.org.