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North Dakota is well known for its amber waves of grain and rich supply of natural resources. Nearly 90 percent of North Dakota’s land is devoted to agriculture — the largest segment of the state’s economy. As a result, it’s one of the least populous states in the nation. In fact, its population of just over 755,000 only exceeds Alaska, Vermont, and Wyoming.
But don’t let North Dakota’s farming tradition and modest population fool you. The state’s two largest cities — Fargo and Bismarck — are rapidly expanding, drawing in savvy Millennials and motivated entrepreneurs alike. Why? A growing economy, tax-friendly environment, and high quality of life are just a few of the characteristics that give the Peace Garden State its edge.
North Dakota’s economy may still be small in comparison to the rest of the nation, but it’s growing at an above-average pace.According to a recent report by the Brookings Institution, North Dakota now leads the nation on several economic indicators. It also boasts one of the lowest unemployment rates in the country.
Since the 2008 financial crash, North Dakota’s GDP per capital has risen three percent annually — the fastest in the country. And productivity in the state has grown at a rate of 2.4 percent per year while the national average was flat. Although North Dakota’s recent prosperity has in part been driven by an aggressive move into oil exploration, its growing economy provides a welcoming climate for small business owners.
Tax friendly enviroment
In October 2018, Kiplinger named North Dakota to its list of 10 Most Tax-Friendly States. The state has a modest sales tax of five percent, although localities can add as much as 3.5 percent. Plus, North Dakota has been steadily cutting income taxes for the last several years to nearly non-existent levels. Income tax rates now range from 1.1 percent to 2.9 percent depending on overall income.
Importantly, the state also keeps corporate tax rates low. The highest rate for the 2018 tax year was 4.3 percent on annual earnings that exceeded $50,000.
High Quality of life
North Dakota’s beautiful national parks, healthy surroundings, and community-oriented culture aren’t the only things that make living in the Peace Garden State attractive. It’s also relatively affordable, coming in below the national average on Sperling’s cost of living index.
In addition, the state ranks fifth in the nation on its use of renewable energy, internet access, and quality of roads and bridges — all key components of a high quality of life in any state. In fact, U.S. News ranked North Dakota fifteenth overall on its list of Best States.
Land of opportunity
According to the Opportunity Index, an annual report developed by Opportunity Nation and Child Trends, North Dakota is among the top five states in the country for opportunity in terms of economics, education, health, and community. A similar study found that the Great Plains was the most upwardly mobile region in the United States.
Particularly, millennials in particular are taking advantage of the unmatched opportunity in North Dakota. In fact, Bismarck is the top location in the country for adjusted median earnings among 25 to 34-year-olds.
Thriving startup scene
It may be surprising, but North Dakota has a long history of entrepreneurship beginning with Great Plains Software, a Fargo-based tech company that launched in the 1980s and was acquired by Microsoft in 2000. Today, Fargo is home to the second-largest Microsoft campus in the country.
Fargo is quickly becoming the Midwest’s hotspot for technological innovation and startup activity. Incubators, co-living and co-working spaces, and other organizations that support entrepreneurial activity are emerging all over the city. The state of North Dakota also provides grants, educational resources, and mentoring services to help entrepreneurs successfully launch new businesses. As a result, the city is attracting a wave of transplants eager to take advantage of the city’s support system and energy.
If you’re a small business owner or have a great idea for a startup, North Dakota has everything you need to flourish. Even better, you might draw inspiration from the many like-minded entrepreneurs flocking to the state.