Friday, September 22, 2006

The Richest State?

“When people become rich, they tend to give things away. We in South Dakota must be some of the richest in the country, because we keep giving away the great minds of our young people. The saddest day of the year for me is graduation day at South Dakota State University, when I see $2 million in lifetime payrolls walking across the stage to get their diplomas, and then moving out of state.” Al Kurtenbach, Chairman of publicly held Daktronics, headquartered in Brookings, SD, was addressing the Regional Economic Summit in Aberdeen.

He told of how he started Daktronics which has grown into one of the larger firms in the state with 2,200 employees, “I was a professor at SDSU for 10 years when I met another fellow professor in 1968 who also saw an opportunity to start a business to take advantage of the things being researched at SDSU and the talent that was graduating in engineering.”

Later at lunch about that start-up, “We raised $200,000/year from local people for a four year period. We started in biomedical devices but found it to be too costly and with too long of a lead time to allow us to survive. We switched to scoreboards when a SDSU wrestling coach came back from a national wrestling tournament and told us of the need for a scoreboard specifically for wrestling. Today we are the largest scoreboard company in the world. Our products are used at the Olympics, by the Chicago Bears, the coke sign in Times Square and other locations. Right now digital billboards are a big growth area for us and we are starting a new plant in Sioux Falls to take advantage of that market.”

Another luncheon partner was Valerie Kuhl from Citibank in Sioux Falls. She explained how Citibank, with its 3,200 employees happened to come to SD, “Governor Bill Jankow and Walter Wriston did a handshake deal in 1981 when the prime rate soared to 18%. Jankow agreed to get the state law changed on usury rates when Connecticut, where Citibank’s credit card operation was headquartered refused to raise its maximum interest rate of 18%.”

Today Citibank is the largest credit card operation in the world; South Dakota developed a niche in the rapidly growing cluster. Its 3,200 employees in Sioux Falls provided over 50,000 hours of volunteerism in the region.

It continually amazes me how towns develop and companies are started in the strangest of ways. The impact upon towns, regions and even states can be incredible!

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