Imagine a young, bright-eyed graduate from a North Dakota university, diploma in hand, standing at a crossroads. One path is to chase after opportunities in distant cities. The other keeps them rooted in the community that provided their education. Sadly, the decision leans towards departure for more than half of these graduates. In 2017, a mere 49.1% chose to stay, reflecting a deep-seated challenge facing North Dakota, the ‘brain drain.’
In a recent development, the North Dakota Legislature passed a bill to bolster the North Dakota University System’s budget for the 2023-25 period. This budget reached nearly $800 million, representing a remarkable 15.5% uptick from the previous one. This investment is particularly noteworthy given the state’s relatively modest population. However, this investment in education seems to be slipping through the state’s fingers as these talented individuals are compelled to seek opportunities elsewhere. To taxpayers and the state, the issue lies not within the financial commitment but in the lack of sufficient retention to gain a return on this investment.
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So, how can the state turn this tide, ensuring that its investment in education translates into tangible growth and opportunity? Enter the North Dakota Growth Fund, a beacon of hope with $100 million in capital ready to deploy. This is more than just a fund; it’s a statement of intent, a commitment to turning the state into a fertile ground for innovation and enterprise.
Spearheaded by 50 South Capital, the NDGF strategically invests in sectors that could change the game — from agri-food to tech startups. It strategically allocates funds into various investment avenues such as venture capital, private credit, private equity, growth equity, infrastructure and tangible assets opportunities. These investments will be directed towards entities and private funds headquartered in North Dakota or having a substantial presence within the state.
Take, for instance, the Fund’s investment in Lewis & Clark Agrifood, which subsequently backed Bushel, a Fargo-based digital platform revolutionizing the agricultural supply chain. Fueled by this influx in capital, Bushel is a testament to what can happen when new capital meets local ingenuity. It’s not just about the 50-plus North Dakota graduates they employ; it’s about showing what’s possible within the state’s borders.
The story doesn’t end here. Looking across the Midwest, in Nebraska, we find a parallel fund with ‘Invest Nebraska.’ Boasting investments in over 106 high-growth companies and creating more than 1,044 full-time jobs, their blueprint is one worth emulating. It proves that state-assisted capital programs are not just theoretical exercises but practical solutions to real-world problems.
North Dakota stands at a crossroads, and the path forward is clear. The NDGF emerges as a pivotal catalyst that tips the scales, encouraging graduates to build their future where their roots lie. It’s about creating an environment where ambition and local loyalty are not mutually exclusive but are instead two sides of the same coin.
As policymakers and leaders contemplate the future, it’s crucial to maintain sight of the central element of this issue: the dreams and aspirations of our young people. The North Dakota Growth Fund has the potential to be a wellspring of inspiration. This force ensures our state’s graduates not only secure a livelihood from their degrees but also can build a truly fulfilling life right here in North Dakota.
Oudom Hean is an assistant professor of finance at North Dakota State University and a faculty scholar at the Challey Institute for Global Innovation and Growth at NDSU. Corey Wilmer is an undergraduate research assistant at the Challey Institute.
