I don't think Mike Rounds understands competitive advantage. Check out how he rationalizes the privatization of South Dakota's EB-5 program:
South Dakota officials were closely involved with plans to bring in a private company to help run the state's EB-5 program in 2007, two years before the economic development effort was fully privatized.
...Rounds said he was briefed several times in 2007 on plans to reshape South Dakota's EB-5 program, including that there would be private companies involved. At the time, EB-5, which solicited investments from would-be immigrants, was run by the South Dakota International Business Institute, an arm of the South Dakota Board of Regents but under contracts with the Governor's Office of Economic Development.
"What they could not do at the current level through the Board of Regents office was ... set up a separate program where they could offer these partnerships," Rounds said. "The idea was to look more like a regular regional center (like the ones) that they were competing with" [David Montgomery, "Letter Laid out EB-5 Privatization Plans in 2007," that Sioux Falls paper, 2014.09.16].
Separate program... these partnerships... I feel like I do when I'm in the insurance office and my agent isn't making himself clear. Rounds is talking about the scheme under which his man Joop Bollen formed a private company to aggregate EB-5 dollars into loan pools, collect huge fees from the investors, and keep it all off the state books so that when things went south, interested citizens would have a heck of a hard time following the money trail.
But think about the business model. There are two ways to compete in business: offer something cheaper or offer something different. South Dakota got into EB-5 in 2004 to offer something different: to lure foreign dairy investors with the additional benefit of a green card through the then underused EB-5 program. Three years later, that advantage was fading, as more "regional centers" popped up to offer EB-5 investment opportunities.
To compete for more EB-5 money, the Rounds Administration thus needed to offer a different different or offer cost savings. Mike Rounds could have done both. Imagine this alternative-universe pitch from a governor with real competitive ganas:
Hey, EB-5 investors! Tired of being fleeced by all those private regional centers? Want to deal straight up with a state government that will handle your investment with efficiency, integrity, and rigorous public accountability? Sign up for South Dakota's EB-5 program! We are one of the only state-run EB-5 programs in the country.
Private regional centers will charge you fees of $30,000, $40,000, even $50,000 or more on your $500,000 investment. South Dakota will only charge you $1,500.
Private regional centers just want to recruit more investors to pad their pockets. South Dakota wants to help you come to America and ensure that your money supports viable projects that pay off for everyone.
South Dakota EB-5: We're different! We're better! We're cheaper! We're here to help you. [South Dakota Regional Center, promotional video, alternative universe, 2008]
With a pitch like that, South Dakota could have recruited more EB-5 investors than it knew what to do with.
But our Mike Rounds chose to do the opposite: he thought South Dakota could compete by doing the same privatization and charging the same hefty fees as other regional centers. His plan led to some brief profits for his cronies but ultimately to a huge failed project in Northern Beef Packers and corruption that led to dozens of investors losing their money and Governor Daugaard shelving the program in 2013. So much for competitive advantage.