2020 & Beyond: Planning for the Future

It was, of course, the X-Files’ well-manicured man who famously said, “We predict the future — and the best way to predict the future is to invent it.”

North Dakota is in the process of inventing its future, with the goal of making sure it’s at least as good as the present – a present that has most other states looking on with envy.

Indeed, according to the U.S. Bureau of Economic Analysis, North Dakota`s gross domestic product increased by 7.6 percent last year. Since 2000, the state’s economy has averaged an annual growth rate of 7.52 percent, compared to a national growth of just 3.9 percent. The Detroit Free Press pointed out recently that the residents of only nine states have returned their economic output to the level that existed before the downturn struck at the end of 2007. North Dakota, it suggested, “is the nation’s true economic miracle. It topped the nation in GDP growth per person last year, the year before, since the downturn and in the last decade.”

Andy Peterson, President and CEO of the North Dakota Chamber of Commerce, opined in the pages of the Duluth News Tribune in early June that the state’s long-term approach to economic and business-development policy “is and should be a model for the nation. North Dakota’s congressional delegation, governor, legislators and state officials are easily accessible and respond quickly to the concerns and needs of the business community. In addition, both sides of the state’s political aisle have similar goals regarding business development and investments. They work together more often than not to create a regulatory, tax and legal environment where businesses thrive. Business regulations are kept to a minimum, and regulators work to get businesses permits in a timely and uncomplicated fashion.”

Now, to keep things that way.

Gov. Jack Dalrymple, the North Dakota Chamber of Commerce, the Freedom of Enterprise Foundation and the North Dakota Economic Development Foundation launched their much ballyhooed 2020 & Beyond planning initiative back in January. 2020 & Beyond is a statewide development initiative that resulted from legislation passed during the 2011 legislative session. A steering committee and advisory board made up of business leaders representing the state’s eight regions has been guiding the process and helping to develop a plan to address major themes. The steering committee will provide a report — expected to result in several legislative initiatives — to the Governor and the North Dakota legislature in the fall outlining its recommendations.

The initiative, according to the governor’s office, will “advance the state’s emphasis on job creation and building a positive business climate, while focusing on enhancing North Dakota’s quality of life and the livability of its communities.” Its focus is on three critical keys to the state’s ongoing success: people, places and opportunities.

After decades of slow growth, explains Gov. Dalrymple, “we came into office in 2002 on a message of job creation. We needed to focus on creating new, good paying jobs in industries like energy, agriculture, technology, advanced manufacturing and tourism.”

Job well done — the economy has responded to those policies, with four years in a row of budget surpluses and the lowest unemployment rate in the nation.

“We feel we have arrived at a place where we have achieved what we set out to do,” says Dalrymple. “The question is, where do we go from here? We’re feeling a strong need to actively shape the state.” For the first time in history, the governor points out, North Dakota has an opportunity to decide what it wants to be. “We don’t want to look back and realize we made a mistake, and this is what’s led to the 2020 & Beyond.”

And so, the governor’s office has taken the show on the road, listening to citizens and collecting ideas, suggestions and complaints at meetings across the state: Bismarck, Dickinson, Wahpeton, Fargo, Williston, Devils Lake, Minot, Grand Forks and Jamestown.

The current process is similar in many ways to that of a decade ago, says Al Anderson, Commissioner of the North Dakota Department of Commerce. The public meetings have been “a chance for citizens to get involved. In gives them a chance to provide comments and insights so that a steering committee, which is made up of people from across the state who are proven business leaders, to look at our new plan and ask, ‘How do we develop our vision for 2020 and beyond? How do we build on the growth that we’ve had? How do we expand our visions for the future, for economic development in particular?’ Part of it is also, how do we maintain some of the culture? How do we bring in new people and meld them for the future? How do we ensure that we still maintain a good quality of life? And then last but not least, how do we diversify our economy?”

“This is an important initiative for our state as we build on our progress and capitalize on the opportunities that have emerged as a result of our state’s impressive economic growth,” Dalrymple said. “To ensure the success of this effort, we need input at the grassroots level to identify the issues that are impacting our people and the opportunities that will advance North Dakota’s continued economic prosperity. We need to make sure that we have a strategic plan in place similar to the plan we put in place in 2001. This goes beyond commerce. This is about the total picture of what life should be like in North Dakota.”

A Blessed Position

“The state is in a very blessed position right now,” says Kayla Effertz, Senior Policy Advisor to Gov. Dalrymple, “and it comes from a variety of reasons. One is that we can look back on 10 years of good, solid policy put into place to make this a good environment for businesses to come and start and expand and really flourish and thrive.” What Effertz calls “the real story” has been the number of jobs statewide that are presently unfilled: 24,000 in all. Many are concentrated in Cass County (Fargo).

Another major plus, of course, has been the well-known Bakken Play, considered by many to be the largest deposit of hydrocarbons in the Western Hemisphere, producing huge amounts of very high quality light, sweet crude with high production levels of oil relative to natural gas.

The 2020 & Beyond initiative is “an opportunity for people across the state to provide their input, their thoughts, their best ideas on how to build the future of our state,” says Effertz. “It’s a work in progress. It’s not finished. It’s not even drafted.”

“We have had probably the strongest economy anywhere in the nation,” Anderson relates. “The three last Gallup polls have ranked North Dakota as the nation’s best state for creating jobs for 2009 to 2011, so that’s been consistent. And of course, most everybody knows that we have the lowest unemployment rate.” Indeed, the most current numbers show unemployment in the state at just 3.1 percent.

Many across the nation are surprised to find that, contrary to their preconceptions, the robust job situation is not due solely to the surging oil industry. “So many people outside the state think, ‘Well yes, it’s because you’ve got an oil boom going. There is a lot of activity there, but two-thirds of the jobs we have open are outside of the 17 oil- and gas-producing counties. So it’s a lot more than that.”

Those who credit the lion’s share of the state’s economic vigor to oil fail to notice that oil and gas account for only about 25 percent of state revenues. Something in the neighborhood of 60,000 jobs have been added in the last decade, and per-capita personal income has increased by more than 78 percent since 2000. Says Anderson, “We’ve gone from 38th among the 50 states in terms of per-capita wages to ninth today. People say, again, that it’s all related to oil, but it’s not. Every county across the state has seen improvement. We were 38th in 2007 or so before oil really took off we moved to 17th (per capita personal income). So it’s been improving, and that’s one of the things why – our previous plan has been very, very effective in job growth and really setting up the economy to be very strong here in North Dakota. So the question is: What changes when you look out to 2020 and beyond that? What do we need to do to prepare for that?”

Because it’s where so many of the jobs are, North Dakota is also one of the very few states that is seeing young people flocking to it – and thus, its population is getting younger. As Anderson points out, “That’s just the opposite of the majority of states in the U.S., because most of them are aging. And North Dakota is becoming more diverse than it was in the past.”

The 2010 census was the first in which North Dakota surpassed its 1930 all-time high population. The number of state residents now stands at 672,500. In fact, the population has grown in seven of the last eight years, and the estimate for 2011’s final number is 684,000. That does not include the 20,000 to 24,000 who are residing in crew camps, or temporary housing.

Education has always been important to North Dakotans, but legislators have begun working more closely than ever with the state’s university system – both the two-year schools that fit well with a lot of the technical positions that are becoming available and four-year institutions. Residents’ educational attainment since 1990 has continually gotten better, not only with regards to the graduation rates of high school students but a higher percentage of people earning graduate degrees, as well.

One of the primary educational goals for 2020 and beyond is to make sure that curriculums are well aligned with industry needs. An estimated 68 percent of statewide college graduates got jobs in the state last year. Says Anderson, “We want them to have the ability to all work here if they’d like.”

Another statistic Anderson finds “truly interesting” is that 44 percent of North Dakota’s out-of-state graduates were still in the state a year after they graduated. That says good things about life in the state. “We’ll want to continue to increase that. We’re growing and we want to make sure we have a good educational system that meets with that.”

Water is a serious issue for the future. North Dakota must care for an essential water infrastructure. The western part of the state has been dry, Anderson explains, and so has pushed a lot of water-development opportunities – “piping to move the rural water around, essentially,” he notes – for both communities and industry.

State officials have almost tripled the amount of dollars spent each year on western highways, adding lanes, widening truck-passing and turn-off lanes and reinforcing roads in general to handle heavier weights. “That’s a program going on very quickly now, and so hopefully we’ll be in a much better position.”

Anderson, who has been traveling around the state (14 cities in all, primarily in the western region) along with representatives of nine other agencies, has thus far met with over 600 local leaders. The message he is sending, is that he and the other officials are there to provide support.

“Most of the incredible growth that we haven’t been able to handle as well as we’d like, where we’ve had some of the infrastructure challenges, has been in the west,” he notes, “so we wanted to make sure we knew exactly what those local leaders were up against. We wanted to make sure we were working together with them, that it was a coordinated response.”

He is also informing them that during the last legislative session $1.2 billion was put aside for infrastructure improvements, what he terms “just catch-up. What that includes is everything from the city and county distribution of tax revenues to energy impact grants. Those usually dealt with below-ground needs for housing development: water, sewer, curbs, things like that.”

The most pressing need, Effertz suggests, is “tough to say at this state of the game. There have been nine community sessions throughout the state, and they have collected hundreds and hundreds of different ideas — everything from additional infrastructure, building upon what was put in place, to ideas on how to move education forward. We’re taking those ideas and really wading through them and seeing which ones are the best ones and how we can further develop them.” There is also an online forum for North Dakotans to use, as well.

No Stone Unturned

The hardest part of the process, according to Effertz, is to leave no stone unturned, or in this case no good idea unacknowledged, and to get out of thought leaders’ ways. “You don’t want to discount any idea, not just from business people and innovators but from individuals from all walks of life. It’s different industries coming to the table, and I think that’s really, truly when you see true innovation. You have to let the process play out to be able to get those good innovative ideas. So I would say it’s a matter of letting the innovation happen sometimes.”

Dalrymple acknowledges that the process must and will include more than just the government apparatus. “We know that industry itself is going to have to carry forward these ideas. They will continue to be included.”

The administration has reached out to leaders from the public and business sectors, as well as those Dalrymple refers to as “thinkers,” and asked them to brainstorm on what North Dakota should be. He boasts that the process features “a balance of east and west, public and private. I think we are generating a lot of ideas.”

The process and its ultimate result, Dalrymple concludes, have nothing to do with legacy. “I don’t want to be in that position, where it seems like this is a Jack Dalrymple plan for North Dakota. It’s the people’s plan for North Dakota. I think it’s very important that is the way it’s done.”

“We’ve been successful,” says Anderson. “We’re growing as a state. We’re actually growing younger, which is really a dramatic change from the past.” At present, he continues, agriculture and energy are two sets of commodities that are extremely high priced, and thus strong sources of revenue. “We’re also doing pretty well in things like advanced manufacturing and tech businesses, and of course tourism does to some extent, too. But how do we make sure we don’t have booms and busts?”

“I think everybody is very eager,” the governor concludes. “Everyone is excited about what will come out of this. It is a process, and doing it well is very important. It’s very exciting.” Indeed, much of what’s being discussed looks even further down the road, to 2030.
“North Dakota’s economic success demonstrates the proven benefits of a friendly business climate,” the Chamber of Commerce’s Peterson concluded. “There’s no reason why the North Dakota model can’t be duplicated elsewhere.”

Exactly the words many Americans have been waiting to hear.