Governor Promotes Small-Town Economic Development; Economist Questions Viability

Last updated on 2011.08.09

Governor Dennis Daugaard is getting around to the small-town economic development program he talked about during last year's campaign. At the Governor's Economic Development Conference Tuesday and Wednesday, Governor Daugaard and his economic development commissioner Pat Costello spoke of their plans to focus on boosting business in towns with populations under 5000.

I don't see details up on the state's economic development website yet, and the discussion in that Sioux Falls paper isn't terribly illuminating. We hear from the governor and his lieutenants about admirable goals—identifying local needs and development options, training local leaders, focusing on entrepreneurship and retaining and expanding existing benefits—but I don't see the details of how, what, where, when, and how much we're spending. Neither does Sisseton-based economic development honcho Lori Finnesand:

"We need that extra assistance and can benefit from it, whether it's just a few jobs or things they can do to make the community better.... I'm not sure I'm real clear on how they're going to focus it, what they're going to be doing, so I'm waiting to see how the program really rolls out, how we can work with the state to help communities [Lori Finnesand, CEO-NESDEC, quoted in Sarah Reinecke, "State Office to Promote Growth in South Dakota's Small Towns," that Sioux Falls paper, 2011.04.27]

Whatever the details, oft-cited economist and USD professor emeritus Ralph Brown is dubious of the value of focusing state resources on small-town economic development:

He also said most growth takes place in cities of 10,000 or more people, or suburbs of larger cities such as Sioux Falls or Rapid City, instead of small, isolated communities.

"I'm not saying we should give up on these smaller towns, but to think that we're going to have a resurgence of growth in small-town South Dakota is probably not going to happen," Brown said.

"You can't save all the small communities in South Dakota; it's just not going to happen," Brown said. "The tough question is which ones show potential for sufficient growth to provide more state support?" [Reinecke, 2011.04.27]

Brown is certainly right about current growth patterns. South Dakota is urbanizing, with just a handful of big towns contributing the lion's share of population growth. Dr. Brown recognizes the fact that many rural communities are dying. He claims he's not saying we should "give up" on smaller towns, but when he says we can't save some small towns, he seems to saying we'll have to pick and choose and deem some small towns not worth further state investment.

Now notice that I'm not criticizing Governor Daugaard's plan. I hope his small-town specialists bring beaucoup bucks to our smallest burgs and prove Dr. Brown flat wrong.

I notice, though, that one of Governor Daugaard's lieutenants, Dave Anderson, says there are 420 communities with populations under 5000. Really? Even if I count Junius, I've never seen a South Dakota atlas that lists that many dots. There are barely 140 school districts serving communities smaller than 5000, and even some of those districts struggle to be economically viable. If the governor is looking at those 420 White Owls and Viennas and Junii as separate economic development units, he may indeed fulfill Doc Brown's fears of frittering away finances.

If our smallest places are to produce a return on state economic development resources, we may need to invest those resources in a Munstermanesque regional fashion, encouraging small places like the Montrose-Humboldt-Canistota metroplex to share training and development efforts. Much bigger communities work together on economic development; regional cooperation is all the more for small towns to reverse their rural decline.

p.s.: The governor tells us a bit more about his small-town specialists and his microloan program in this March 25 press release.