Challenge

Unveiling South Dakota’s Potential: A Deeper Dive into Corporate Perceptions and Economic Development

South Dakota, despite its numerous advantages such as favorable business policies, a skilled workforce, and cost-competitive environment, remains an untapped resource for many corporate leaders when considering site selection and investment opportunities. This lack of awareness represents a significant challenge for the state’s economic development efforts. Recognizing this issue, the Governor’s Office of Economic Development commissioned comprehensive research studies in 2022 and 2024. The core objective of these studies was to delve into the perceptions of C-suite executives and key decision-makers across the United States regarding South Dakota as a potential business destination.

The research aimed to uncover the primary factors that influence corporate site selection and investment decisions, with a specific focus on South Dakota. By identifying these key decision drivers, the state can develop targeted strategies to enhance its appeal to corporate leaders and attract greater investment. The studies employed a mixed-methods approach, combining qualitative and quantitative data collection techniques such as surveys, interviews, and focus groups with C-suite executives and decision-makers from diverse industries and geographic regions.

The findings of the research are expected to provide valuable insights into the strengths, weaknesses, opportunities, and threats that South Dakota faces in its pursuit of economic growth. This information will enable the state to develop a comprehensive and data-driven economic development strategy that leverages its unique assets and addresses the concerns of corporate leaders.

Key Areas of Focus for the Research

• Perception Analysis: Understanding how South Dakota is perceived by corporate leaders in terms of its business climate, infrastructure, workforce, quality of life, and overall attractiveness as a business location.
• Decision Drivers: Identifying the primary factors that influence corporate site selection and investment decisions, such as tax incentives, regulatory environment, workforce availability, infrastructure quality, and access to markets.
• Comparative Analysis: Comparing South Dakota’s strengths and weaknesses to those of other states competing for corporate investment.
• Targeted Messaging: Developing effective messaging and marketing strategies that highlight South Dakota’s unique value proposition and resonate with corporate leaders.
• Stakeholder Engagement: Building strong relationships with key stakeholders, including business leaders, site selection consultants, and economic development organizations, to promote South Dakota as a prime business destination.

Approach

Through qualitative and quantitative research, one-on-one executive interviews and a large-scale survey provided deep insights into site selection motivations. The 2022 study conducted in-depth interviews with executives from industries including manufacturing, cybersecurity, retail, biotech, and professional services. The 2024 follow-up study expanded on these insights with 207 surveys targeting business decision-makers in key states such as Colorado, Minnesota, California, and Illinois.

Insights

1. Factors Influencing Site Selection

Executives prioritize a mix of economic incentives, workforce availability, and infrastructure when evaluating relocation opportunities:

• Tier 1 Priorities: Tax incentives (53.8%), available workforce (50%), quality of life for employees (47.7%)
• Tier 2 Priorities: Available buildings (39.2%), corporate tax structure (36.2%), pro-business government (35.4%), and state fiscal condition (34.6%)
• Tier 3 Priorities: Trained workforce (30.8%), ethical business environment (29.2%), and shovel-ready properties (16.2%)

2. Perceptions of South Dakota

While many executives expressed interest in relocation, awareness of South Dakota’s advantages remains low:

• 2022 Insight: Executives lacked knowledge about South Dakota’s business environment, workforce, and infrastructure.
• 2024 Shift: While 77% of businesses surveyed were considering relocation, only 50.8% viewed South Dakota as a viable option—down from 73.8% in 2021.
• Common Concerns: Workforce availability, shipping logistics, and economic growth potential.
• The 2024 study revealed that 65.2% of decision-makers plan to move or expand within the next 5-10 years, a notable increase from 57.3% in 2021.

4. Media and Information Sources

Executives rely on digital channels for site selection research:

• Online searches and YouTube (50%)
• LinkedIn and social media (24.2%)
• Industry publications (9.1%)

Strategic Recommendations

Through our interviews and surveys, the responses indicated that some of our top priorities in our integrated work alongside our parent agency Designsensory should be to:

1. Amplify Awareness Through Targeted Digital Marketing

• Leverage video content on YouTube showcasing South Dakota’s business success stories.
• Enhance LinkedIn outreach with case studies and executive testimonials.
• Improve search engine visibility with robust, data-driven content.

2. Position South Dakota as a Business-Friendly Hub

• Develop messaging that emphasizes low taxes, economic stability, and available workforce.
• Address concerns about workforce availability by promoting trade schools, universities, and workforce training programs.
• Highlight cost-effective relocation opportunities for mid-sized businesses, emphasizing agility and reduced overhead costs.

3. Direct Outreach to Decision-Makers

• Focus efforts on CEOs and sole decision-makers who drive expansion plans.
• Engage site selectors at industry events and trade shows.
• Develop partnerships with major employers in South Dakota to serve as advocates for the state’s business environment.

Impact

The findings from these studies provide a data-driven foundation for South Dakota’s business recruitment strategy. With an informed approach to digital marketing, messaging, and direct outreach, the state can significantly increase its visibility among corporate decision-makers, leading to long-term economic growth and investment.