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North Dakota moves up on Forbes’ business climate listing
Driven in large part by the Bakken oil play, North Dakota ascended to another lofty perch on a business climate ranking list last week.
Building on a trend that has put the Peace Garden State in the forefront of business activity and development in recent years, North Dakota is listed as the third-best U.S. state for business and careers in 2012, according to business magazine Forbes’ rankings, which were released last week.
“This study from Forbes is more evidence that our hard work in the state is getting results,” said state Commerce Commissioner Al Anderson. “Rankings like this help our state draw attention from companies that may be interested in doing business in North Dakota. It’s an opportunity for them to get a look at the resources we can offer.”
The Forbes ranking measured six categories for businesses, including costs, labor supply, regulatory environment, current economic climate, growth prospects and quality of life. Utah finished first on the list and was trailed by Virginia. North Dakota moved up one spot from its 2011 ranking.
North Dakota finished second only to another energy-leading state — Texas — in the area of economic climate.
“North Dakota is a great place to do business right now,” said Dickinson Chamber of Commerce executive director Cooper Whitman. “I know this sounds crazy, but I continue to say it — western North Dakota is home to the most dynamic business climate in the world right now.”
Rounding out the top 10 on the overall Forbes list are North Carolina at No. 4, followed by Colorado, Nebraska, Texas, Georgia, Oklahoma and Iowa. Besides top-ranked Utah, North Dakota was the only other state to finish in the top 20 in all six vital categories.
North Dakota’s lowest-ranking came in the category of quality of life (it finished 19th), which was still in the top 50 percent of all states.
Minnesota, North Dakota will be among best places to live in 2032
Twenty years from now, cars will fly, your iPhone will double as your au pair, and the “Spiderman” trilogy with be on its 12th reboot.
And Minnesota and North Dakota will be among the top five states to live in, according to a new study by poll giant Gallup, which studied 13 “forward-looking” metrics to determine the best future states to live in.
Minnesota ranked No. 2 in the study, behind Utah. North Dakota came in at No. 5, behind No. 3 Colorado and No. 4 Nebraska.
The five future worst states to live in were West Virginia, Mississippi, Kentucky, Nevada and Arkansas, according to the survey.
Gallup didn’t specifically name 2032 as the magic year when the projections would come true. That part came from “U.S. News and World Report,” best known for its annual college rankings.
Minnesota topped the field in economic confidence and, in keeping with its reputation as an outdoors haven, access to safe places to exercise. It also earned high marks in clean water, learning opportunities, and dental visits.
What do dental visits have to do with anything? They’re a health indicator linked to a number of other health conditions.
North Dakota, meanwhile, earned top marks in job creation and full-time employment – no surprise for a state that’s had the lowest unemployment rate in the nation for three years.
The state also boasts the second-highest standard of living in the study, second only to our familiar nemesis in the “best place to live” arms race: Hawaii, which finished a distant 8th in this study.
Minnesotans and North Dakotans are upbeat about the futures of their respective states. Minnesotan ranked No. 6 in optimism for their city or area, and North Dakotans finished No. 14 in that category.
Ask them about their own personal outlook, though, and they’re considerably more cautious. North Dakotans were just No. 37 in the nation in optimism about their own futures, and Minnesotans were near the bottom at No. 48.
Cheer up, folks – Gallup says it’s going to be OK.
The findings were based on interviews with more than 530,000 people across all states since 2011.
Here’s where Minnesota and North Dakota ranks in the 13 “forward-looking” metrics the study used to determine our futures:
Minnesota: No. 1
North Dakota: No. 4
Minnesota: No. 10
North Dakota: No. 1
Employed full time
Minnesota: No. 8
North Dakota: No. 1
Standard of living optimism
Minnesota: No. 19
North Dakota: No. 2
Minnesota: No. 6
North Dakota: No. 14
Minnesota: No. 7
North Dakota: No. 16
Easy to find clean, safe water
Minnesota: No. 2
North Dakota: No. 25
Future life evaluation
Minnesota: No. 48
North Dakota: No. 37
Visited dentist in last year
Minnesota: No. 5
North Dakota: No. 18
Minnesota: No. 12
North Dakota: No. 38
Learned something new yesterday
Minnesota: No. 6
North Dakota: No. 11
Manager treats you like a partner, not a boss
Minnesota: No. 12
North Dakota: No. 2
Easy to find a safe place to exercise
Minnesota: No. 1
North Dakota: No. 20
Breaking News: U.S. Senate Passes EB-5 Regional Center Pilot Program Reauthorization Measure
Great news for the EB-5 community from Capitol Hill today. The Senate with unanimous consent has passed as part of S. 3245 a three year extension of the EB-5 Regional Center Pilot Program. S. 3245 also includes the extension of three other pilot programs: the E-Verify Program, the Conrad State 30 Program and the Religious Worker Program. It is expected that the House, which is currently on recess, will also support the passage of a three year extension. However, because the House is not currently in session, no action will be taken earlier than September.
During the eb5investors.com Southern California EB-5 conference which was held on July 30, 2012, Chairman of the House Judiciary Committee Lamar Smith noted that he is a supporter of the EB-5 program. Chairman Smith noted that he would support and urge the House to adopt either a permanent reauthorization measure or a temporary three year extension of the pilot program. At the conference, California House Republicans Ed Royce and Dana Rohrabacher also publicly stated their support for the program. Both Congressmen recognized that the EB-5 program has the ability to continue to create thousands of jobs for U.S. workers, attract billions of dollars in foreign direct investment each year and encourage successful international entrepreneurs to seek U.S. residency.
While many in the EB-5 community had hoped for the passage of a bill granting a permanent reauthorization of the program, it is unlikely that this will happen. Nonetheless, a three year extension is good news to many EB-5 stakeholders and indications are that the House will support the measure. The EB-5 Regional Center Pilot Program is currently set to expire on September 30, 2012.
North Dakota Economy Booms, Population Soars
By: Dennis Cauchon
North Dakota, the state with the nation’s lowest unemployment rate, capped a decade of economic prosperity with dramatic population growth in its biggest cities.
North Dakota’s low unemployment rate and steady housing market helped towns like Fargo, pictured, grow dramatically.
Fargo added nearly 15,000 residents to hit a record population of 105,549, the Census Bureau reported Wednesday. Its fast-growing neighbor of West Fargo added an additional 11,000 residents to reach a population of 25,830.
Fargo has seen steady growth over the decade — the housing boom missed it — to reach a size that surprised city officials.
“Above 100,000? Wow. That puts us into a different category of city. That’s great,” says Fargo Mayor Dennis Walaker. The city is now home to about one of every six North Dakota residents.
Fargo’s growth is especially striking considering North Dakota’s population is only 672,591, the nation’s third smallest. The state’s total population grew 4.7% from 2000 to 2010, below the national average of 9.7%, but robust for a region that has suffered for decades from a depopulation of the Great Plains.
North Dakota residents continued the long-standing trend of leaving rural counties for the bigger towns of Fargo, Grand Forks, Bismarck and Minot. Also, the state’s population continues to get older. The number of children declined for the second straight decade, says Brookings Institution demographer William Frey.
North Dakota is one of the nation’s least diverse states. Hispanic, black and Asian residents each make up 2% or less of its population. American Indians are the largest minority group, equal to 5.4% of the population.
The superstar of North Dakota is its economy. The state’s unemployment rate hasn’t touched 5% since 1987. The state’s per capita income rose over the decade from 38th in the nation to 17th, the biggest advance of any state.
“We’ve had an absolutely stellar few years,” says University of North Dakota economist David Flynn. “In all honesty, when you look ahead, we should continue to do well for quite a while.”
North Dakota is enjoying an oil boom in the western part of the state, drawing workers from across the country. Williston, in oil country, grew 17.6% to 14,716. The oil windfall has created a $1 billion state budget surplus.
Agriculture — 90% of the state’s area is used for farms and ranches — is productive and profitable, making the state a top exporter of wheat and other crops. Federal agriculture subsidies add nearly $1 billion a year.
North Dakota is one of the few states to add manufacturing jobs over the decade. Bobcat, maker of farm and construction equipment, is headquartered in the state.
“We don’t have big factories like Gary, Ind., or steel mills that are hard to retool,” Flynn says. “We have smaller plants that are some of the most efficient in the world.” When factories closed elsewhere, production was often moved to North Dakota.
The state’s weather makes it hard to lure new residents. The average January low temperature is four degrees below zero. North Dakota holds job fairs in other states to match workers to available jobs.
“We feel extremely fortunate for the position we’re in,” says North Dakota Commerce Commissioner Paul Govig.
Investor Visas More Attainable
By: Katie Rapone
“GIVE me your tired, your poor, your huddled masses,” reads Emma Lazarus’s ode to immigration inscribed on a plaque beneath the Statue of Liberty. More than a century later, however, it is the jet-lagged and rich who are receiving the warmest welcome at America’s borders.
Two senators, Charles Schumer, a Democrat, and Mike Lee, a Republican, recently introduced legislation to fast-track visas for foreigners spending $500,000 on residential property. Their Visit USA Act would allow purchasers and their families to live in America for as long as they owned their houses, though not to work there or receive any federal benefits.
Although the act is unlikely to become law anytime soon, would-be immigrants with half a million dollars in hand need not despair: America has a visas-for-cash scheme up and running. The Immigrant Investor Program, also known as EB-5, was set up in 1990 to lure in foreigners by giving them the right to live and work there permanently if they created jobs.
Initially EB-5 came laden with stringent conditions: immigrants had to invest $1m either in a new enterprise that would create at least ten full-time jobs, or in a failing one to preserve the same number. They were required to manage the business themselves, and even to dedicate some of the jobs to exports. If a company failed in its first two years, investors would lose both their money and their green cards.
With the exception of the two-year rule, these restrictions have now melted away. Investors today can choose to buy into all sorts of packaged projects, created by regional centers that oversee their day-to-day management. Many projects qualify for a minimum investment of only $500,000, designed to push investment to rural regions and areas of high unemployment. Crucially, the required ten jobs no longer need to be in direct employment. This permits investment in limited partnerships whose purpose is to lend money to companies that do employ workers, reducing investors’ risk.
The logical conclusion is that immigrants could qualify for permanent residency simply by buying local government bonds—and that is exactly what did happen in October. A group of 95 investors, mostly Chinese, bought $48m of Washington state bonds to help finance a replacement for the longest floating bridge in the world, near Seattle.
The evolution of the EB-5 scheme has angered some of those offering traditional investments to immigrants. Henry Liebman is chief executive of American Life, a Seattle-based real estate company that manages around 15% of all EB-5 projects nationwide. “If an investor has the chance to buy a bond backed by the full faith and credit of the state, why would he give a developer $500,000?” he wonders.
America’s struggling construction sector certainly needs the money. While $48m accounted for less than 10% of the bridge bonds issue (and just a tiny fraction of the project’s multi-billion dollar total bill), EB-5 finance has become a much-needed source of funds for private property deals.
The rules, however, are unlikely to be tightened again. Over the summer, the Citizenship and Immigration Services streamlined the EB-5 process further. Last year, 2,480 immigrants got their green cards via EB-5. The Obama administration would like to see that number increase to 10,000 a year, which should bring in billions of dollars for building shops, offices and infrastructure. It should also mean tens of thousands of jobs for the poor, huddled masses of America’s unemployed.
Do Business Incubators Spell EB-5 Opportunity?
By: Adam Green
When you think, “EB-5 visa project,” what comes to mind? For many, it’s hotels, ski resorts, and other commercial real estate developments.
But those projects aren’t all that the program has to offer – far from it. In fact, one of the more innovative uses of EB-5 funds we’ve seen involves financing new companies through business incubators.
A few regional centers already do this. In Texas, Ohio, North Dakota, and a smattering of other locations, we know of several new EB-5 efforts seeking capital from foreign investors for the purpose of funding start-ups. In some cases, the money will flow through technology accelerators that help business leaders identify promising new concepts.
The Cincinnati Accelerator
Last month, we included the University of Cincinnati Technology Accelerator in our list of exciting new EB-5 concepts. The Midwest EB-5 Regional Center, which is handling foreign investments in the accelerator, will help fund research into promising new technologies.
Lynn Allen, who raises seed and early start-up capital for incubators through her company, Capital Innovations, thinks projects like this can be a great concept for EB-5. Accelerating job growth through innovation is a high priority in this country, she argues, but job creation will influence the kinds of companies EB-5 funds can create.
“Biotech might not be the right company” for EB-5, she says, because “it generally takes longer to develop and hires fewer people in the short term.”
On the other hand, Allen believes that if a start-up company incubator is part of a larger mixed-use project and the incubator includes young companies that can anticipate scaling up quickly in revenues and employees, EB-5 could be a good fit. The most pressing question, she thinks, is how regional center planners will protect the investor’s downside.
“It can be 7 to 10 years before a young company exits,” says Allen. One way to mitigate the investor’s risk is to package the incubator as part of a larger mixed use project that can offer more downside protection in the event some incubator companies take longer to exit, something the University of Cincinnati accelerator is doing.
Another thing she emphasizes is the importance of university research in developing successful concepts. After all, investors are attracted to university-related projects, and many incubators develop companies from a university’s most commercially attractive technologies..
Up until now, EB-5 has mostly financed existing ventures. A big question for the future might be whether we can use EB-5 to finance growth of seed or early-stage companies. Funds for new facilities or direct investments in companies that meet a an “EB-5-friendly” job creation profile are all possibilities.
A few EB-5 hurdles
In North Dakota, another EB-5-funded innovation effort is already well underway. The North Dakota-Northwestern Minnesota EB-5 Regional Center is using foreign direct investment to augment other funding it already receives for entrepreneurial innovations.
Since it’s linked to the University of North Dakota, the regional center is focused on industries like advanced manufacturing, IT, aerospace, bioscience, electric power generation, and agriculture that currently offer many opportunities in the region. Although its principals, Bruce Gjovig and Rodrigo Cintra, want to develop new companies from the incubator side, they admit that they’ve begun following a more “traditional” EB-5 approach in order to expand the program.
“We’re working with some hotel developers in our region,” says Cintra. “The Western part of the state is facing a significant housing shortage, and these types of developments can help us grow the the EB-5 program in our region and keep operations moving forward.
But the regional center doesn’t want to “just be hotels,” he emphasizes. Despite what Cintra says is plenty of demand for what they’re doing with the incubator element, at this point there just aren’t enough companies with the right financial, operations, and market characteristics needed to participate in the program. That, he says, and the fact that many of the ideas they’re seeing won’t create enough jobs.
“The program is complex and making sure you work with strong projects and mitigate the job creation component of it is crucial,” he says.
Until the regional center can clear those hurdles, it will probably keep working with projects in industries such as manufacturing, real estate, energy generation, and agribusiness. Other stewards of EB-5 funds should be mindful of these issues before pursuing an incubator-based plan. Not because such plans aren’t worthwhile – when done right, they certainly are – but because these are just some of the challenges they’ll likely encounter along the way.
Still, the North Dakota duo is extremely optimistic. As one of only four states that was able to recover all of the private sector jobs it lost during the recession, Gjovig and Cintra can make a pretty compelling argument that North Dakota is a good place to invest.
“By July, we’d like to have some of our current projects completed,” says Gjovig. “We’ve got a really healthy pipeline, and we’re energized by the attention we’re receiving from domestic and international investors in a variety of different sectors.”
North Dakota Booming
by Joel Kotkin
Living on the harsh, wind-swept northern Great Plains, North Dakotans lean towards the practical in economic development. Finding themselves sitting on prodigious pools of oil-estimated by the state’s Department of Mineral Resources at least 4.3 billion barrels-they are out drilling like mad. And the state is booming.
Unemployment is 3.8%, and according to a Gallup survey last month, North Dakota has the best job market in the country. Its economy “sticks out like a diamond in a bowl of cherry pits,” says Ron Wirtz, editor of the Minneapolis Fed’s newspaper, fedgazette. The state’s population, slightly more than 672,000, is up nearly 5% since 2000.
The biggest impetus for the good times lies with energy development. Around 650 wells were drilled last year in North Dakota, and the state Department of Mineral Resources envisions another 5,500 new wells over the next two decades. Between 2005 and 2009, oil industry revenues have tripled to $12.7 billion from $4.2 billion, creating more than 13,000 jobs.
Already fourth in oil production behind Texas, Alaska and California, the state is positioned to advance on its competitors. Drilling in both Alaska and the Gulf, for example, is currently being restrained by Washington-imposed regulations. And progressives in California-which sits on its own prodigious oil supplies-abhor drilling, promising green jobs while suffering double-digit unemployment, higher utility rates and the prospect of mind-numbing new regulations that are designed to combat global warming and are all but certain to depress future growth. In North Dakota, by contrast, even the state’s Democrats-such as Sen. Kent Conrad and former Sen. Byron Dorgan-tend to be pro-oil. The industry services the old-fashioned liberal goal of making middle-class constituents wealthier.
North Dakota economy booms, population soars!
North Dakota, the state with the nation’s lowest unemployment rate, capped a decade of economic prosperity with dramatic population growth in its biggest cities.
U.S. Chamber Names North Dakota a Top State for Job Creation and Economic Growth in the Coming Decade
WASHINGTON – At jobs summit today in Washington, D.C., the U.S. Chamber of Commerce unveiled a study projecting that North Dakota will lead the nation in job creation and economic growth over the next decade, Senator John Hoeven said. The findings were contained in the Chamber’s Enterprising States 2012 report, an annual analysis of state economic and job performance.
“Not everyone, or every state, accepts the notion of inevitable, slow growth and gradual decline. From the onset of the recession, some states have largely avoided the downturn,” the report’s executive summary noted. “By the end of 2011, six states – North Dakota, Wyoming, Alaska, Utah, Texas, and Montana – showed more than 8% job growth over the past decade. Another 22 had shown some, although less robust, employment increases compared to 2001.”
North Dakota led the nation in long- and short-term job growth; Gross State Product growth; per capita income growth; and the number of jobs in the science, technology, engineering and math area, the so-called STEM jobs.
The report also notes that “state policymakers were able to enact a series of tax cuts totaling nearly half a billion dollars in 2011. These included cuts to business income taxes and property tax relief, dropping the tax burden on business in the state.”
Other factors the Chamber highlighted in naming North Dakota were productivity growth, academic R&D growth and support for companies working to expand international trade. North Dakota established the North Dakota Trade Office in 2003 to facilitate trade and the state grew exports by more than 400 percent between 2005 and 2010.
“We worked hard in North Dakota over the past decade to build a strong business climate that attracts private investment and encourages innovation, and now we are well positioned to lead the nation in the next decade,” Hoeven said. “The U.S. Chamber recognizes that many of the things we did in North Dakota – like create a good legal, tax and regulatory environment – should serve as a template for the nation. This is something all North Dakotans can take pride in.”
The report can be found at the U.S. Chamber of Commerce web site: http://ncf.uschamber.com/library/enterprising-states.
UND Center for Innovation profiled for Venture Development excellence nationwide
The University of North Dakota Center of Innovation in Grand Forks is one of just 10 programs–and one of two from rural states–profiled by the Regional Innovation Acceleration Network (RIAN) on its Web site. The profile was published on the site this week. http://www.regionalinnovation.org/profiles.cfm
Innovation-driven development programs from Ohio, Pennsylvania, Oklahoma, Kansas,Â Tennessee, Michigan and California are also profiled with the UND Center for Innovation.
â€œThis profile is important because it is being done by State Science & Technology Institute that, since its inception in 1996, has developed a nationwide network of practitioners and policymakers dedicated to improving the economy through science and technology,â€ said Bruce Gjovig, Center founder and director and entrepreneur coach.
â€œIt is the comprehensive,Â prominent national organization on technology-based economic developmentÂ that works on research, policy, education, communication and information for those in technology-based economic development,â€ Gjovig said.
â€œMany venture programs offer bits and pieces but few offer a comprehensive entrepreneur program like the Center, integrating and connecting students, emerging and successful entrepreneurs, researchers, and investors,â€ Gjovig said. â€œOur success of developing a strong entrepreneur and investor ecosystem has been part of the success and the Center has become efficient through public and private partnerships.â€
RIAN is publishing just 10 profiles of selected venture development organizations around the nation that exemplify how different approaches tailored specifically to their regional assets and entrepreneurial needs are all yielding significant results.
These results include impressive figures for job creation and successful innovation-based startup companies in their regional economies.Â RIANâ€™s goal is to restore resilience in Americaâ€™s regional economies by approaching economic development strategy as a regional innovation systemÂ and create and improve the nationâ€™s community of venture development organizations.
About the Regional Innovation Acceleration Network (RIAN)
RIAN is a project of the State Science & Technology Institute funded by the U.S. Economic Development Administration (EDA) to establish and support a virtual nationwide community of non-profit Venture Development Organizations.
EDA is supporting the RIAN effort, and EDA is the most important federal agency relating to promoting economic development, infrastructure, innovation and competitiveness, preparing Americans regions for economic growth and success.
The organizations are business-driven, public or non-profit organization that promotes regional growth by providing a portfolio of services. These services include assisting in the creation of high-growth companies, providing expert business assistance to these companies, facilitating or making direct financial investments, and speeding the commercialization of technology.Â www.regionalinnovation.org
RIAN profiles the best practices, lessons learned, as well as key programs that are making a significant difference looking at venture development organizations across the United States.
About the University of North Dakota Center for Innovation
The Center of Innovation was one of the first entrepreneur outreach centers in the nation when formed in 1984. The Center provides assistance to innovators, entrepreneurs, students and researchers to launch new ventures, commercialize new technologies, and secure access to capital from private and public sources throughout North Dakota and northwest Minnesota.
The Center has a track record of success in venture development and creating a dynamic ecosystem for innovators, entrepreneurs, and investors.
The Center has worked with more than 550 startups over the years that employ over 4,000 people, and have secured more than $130 million in capital. Plus the Center has teamed up with the EntrepreneurÂ Department to develop a major and certificate program in entrepreneurshipÂ which was ranked in the top 1 percent of entrepreneur programs nationwide.
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*UND Center for Innovation http://www.innovators.net/innovators/public_html/
*RIAN profile of UND Center for Innovation http://www.regionalinnovation.org/assets/files/profiles/RIAN_Profiles_UND%20Center%20for%20Innovation.pdf
Bruce Gjovig, entrepreneur coach and director
UND Center for Innovation