Is yours?

Recently, a group of Russian bankers and economists traveled to the US on the congressionally-funded Open World program to learn more about economic development in rural areas, so they definitely had economics on the brain.  But to their surprise (and mine too!), they heard, over and over, that the economic crisis has not affected the good people of North Dakota as much as one might expect.  Most North Dakotans indicated that they knew there was a crisis, but that they’d weathered the storm pretty well.  One of the presenters even mentioned that North Dakota is one of the few states that is functioning in the black – with no deficit whatsoever!  (For the record, New Mexico and Wyoming are the only other states with no deficit.)  Coming from the state of Maryland, which is currently running a deficit of about $1.6 billion, I was impressed.  And so were the delegates.  The main question was: why?

Over the course of the visit, delegates began to form their own opinions on this topic.  First, they noted, North Dakota has oil.  This means greater revenue, even in times of economic downturn, than other states might have access to.  That said, Texas has oil, too, but they are running a deficit of $7.8 billion, according to Stateline.org. 

A second possibility, or perhaps simply a contributing factor, may be the encouragement of entrepreneurship in the state.  In 2002, the Red River Valley Research Corridor was established between the University of North Dakota in Grand Forks and North Dakota State University in Fargo, to attract funding, jobs, and new businesses to the region.  The project, supported by Senator Byron Dorgan, has brought federal funding into the region.  More than $300 million has been spent on building the infrastructure and talent needed to support world class research.  Delegates had the opportunity to visit both universities that anchor this Research Corridor and met with representatives of some of the companies in the Corridor’s technology/business incubators.  Although some of the delegates had been aware of the existence of incubators in Russia, they had never thought of them as viable or trustworthy options.

Third, delegates noticed that most of the North Dakota businesses seemed to be locally based.  That is, the raw materials were produced locally, the talent needed to develop them into sellable products was available locally, and the customer base was largely local, especially in the initial stages of business development.  Young businesses did not seem to be as dependent on revenue and products from outside of North Dakota, so when the economic crisis hit in other parts of the country, it didn’t seem to touch the local businesses as directly, deeply or immediately.

Delegates concluded that establishing an economic environment of moderate conservatism and stimulating entrepreneurship from the inside out has allowed North Dakota to stay relatively financially stable throughout the crisis.

For myself, I think I’ll move to North Dakota.  It’s beautiful there and the state clearly knows how to manage its resources. 

-Jenny