A caller to the radio show last week questioned why the North Dakota economic experience seemed is such stark contrast to the Minnesota situation. (She asked this while almost getting hit by a school bus breaking traffic laws.) There are a couple of reasons for this, one pretty easy to explain on the radio, and the other is visual and so is not as easy to explain. I should point out the two stories are not in opposition to each other. That is, they can be part of the same larger narrative.
One of the questions I hear constantly has to do with the impact, or potential impact, of an industry on the local economy in Grand Forks. To be clear, there are no clear rules on which industries will have the highest impact. There are multiple factors influencing such outcomes, such as the supply chain factors in the local economy, the response of the consuming public, whether the business is in a “new” industry from the perspective of the local economic portfolio or will be competing with existing firms, and so on.
Numerous stories and sources document the growth of the North Dakota economy over the last decade. The North Dakota economy grew by leaps and bounds over this time, and economic development started in many industries and in many counties. Recently, somebody asked me about the contribution of oil over the last several years. This question is in contrast to the often asked question regarding which industry is most important in the North Dakota economy currently.
I imagine the different sectors of economic activity in any state argue about their relative importance. Lately the contest in North Dakota has been about the relative importance of agriculture and mining. My personal opinion is that if the data support an actual argument of this point than you are fortunate enough. These debates rage though and so I tend to investigate. There are many different ways to approach these types of questions but I am not going to go through a refereeing of different methods. I will just go through what I think the data are trying to impart to us.
JT and I talked about the issue of economic development in Grand Forks on the Jarrod Thomas Show today. Let me preface my remarks with a recognition that economic development is a difficult process, whether we are talking about managing it, reacting to it, hoping for it, or whatever. Development can inherently alter relationships in an economy, and in unpredictable ways. (Note I am not advocating management of economic developing because I think that often creates its own issues but we can discuss that later.)