North Dakota: America’s Best Local Business State

Earlier this week, I keynoted a meeting of the Bismarck-Mandan Chamber EDC, which was attended by 600 economic developers, businesses, and politicians in the region. I was asked to give an assessment of the national and state economy, as well as to make some recommendations for future local action. And in preparing for the talk, I discovered some remarkable facts about this state of 800,000.

One is its astonishing economic track record. Over the past twenty years, its employment rate has performed significantly better than the national average. During the Great Recession of 2008, when national unemployment climbed to 10%, North Dakota’s rate remained steady at 4%. During the COVID years, yes, the unemployment rate went up, but much less than it did nationally. Meanwhile, personal incomes have been steadily growing.

The reason is hiding in plain sight. North Dakota is perhaps the most small-business-friendly state in the country. The state ranks fifth in the highest percentage of its workforce in small businesses, and even many of its larger businesses are, in fact, locally owned. A list of the largest twenty businesses in the Bismarck-Mandan metro area revealed that 17 were locally owned anchor institutions—primarily government agencies, public schools, colleges, and hospitals. Jobs in nonlocal businesses were well under 10% of the total workforce.

For years, I’ve presented evidence showing that communities with a high density of locally owned businesses have high rates of job growth, reduce inequality, attract tourists, promote entrepreneurship, improve public health, and engage people through volunteering and voting. And here was a state where it was all happening!

Another source of strength for the state is its strong network of cooperatives in the fields of agriculture, telecom, electricity, and banking. There are more than 250 cooperatives responsible for 10% of the state’s gross domestic product (GDP)—double what cooperatives deliver nationally.

And then there’s the Bank of North Dakota, which we’ve written about frequently in The Main Street Journal. The bank provides low-interest loans to local governments in the state and creates a credit ecosystem that allows small businesses to receive the largest loans of any state in the country. The BND accomplishes all of this and still generates $100 million in profits every year.

I don’t mean to understate the challenges that the state faces: It’s too dependent on a fossil fuel industry that’s fast becoming obsolete. Its biggest trading partner is Canada, which means it’s getting battered in a mutually destructive trade war. Despite affordability generally being better in the state than elsewhere in the country, there is still a shortage of affordable housing for the growing population.

To solve these problems, I made recommendations familiar to our readers: Less corporate attraction. More placemaking. More leak plugging. More local purchasing. More local investing. More targeted local investment funds. Tax credits for local investment.

Will North Dakota embrace these suggestions and improve their economic strength? Stayed tuned. We will be watching carefully.

---

Also in this issue of The Main Street Journal, you will find:

• Speaking of North Dakota…Ellen Brown provides a big picture view of what’s wrong with America’s financial plumbing and suggests that the Bank of North Dakota offers a strong blueprint for fixing it.

• Sherwood Neiss of Crowdfund Capital Advisors makes sensible recommendations to the SEC on how to increase the liquidity of Reg CF securities (only about 1% of which “have achieved meaningful secondary liquidity”).

• Pathlight Law shared an overview of Proactive Sustainable Bonds, which aims to support affordable housing projects.

• Oscar Perry Abello writes about a new loan product the Brooklyn Cooperative Federal Credit Union is offering to worker cooperatives. (Traditional loans are difficult because personal guarantees are not possible.)

• Colorado just launched its Tenant Equity Vehicle, which enables affordable housing tenants to receive “equity” payments for their rent and makes the transition from renter to owner easier.

• A new analysis from the London School of Economics suggests that worker cooperatives, despite their impressive performance, are surprisingly rare because of implicit biases managers have against them. (This is one reason, by the way, I teach my business students at the Bard MBA Program about cooperatives.)

• Finally, there’s a lovely tribute to Helena Norberg-Hodge, one of the pioneers of the local economy movement, on the occasion of her 80th birthday. Happy Birthday, Helena!

---

— Michael Shuman, Publisher

Publication of The Main Street Journal depends on your support. If you like what you’re reading, please consider becoming a paid subscriber today. Paid subscribers can attend our monthly “Mondays with Michael” and receive a free consult on their projects.

NEWS

• Rethinking America’s Financial Plumbing, Sheerpost (January 28)

• Shedding Light on the Private Secondary Market, Crowdfund Capital Advisors (January 28)

• Proactive Sustainable Bonds™ Prioritizes Community Centered Affordable Housing, Pathlight Law (January 20)

• A New Loan Product Is Helping Power Brooklyn’s Co-ops, Next City (January 20)

• Where’s the American Dream for Renters? The Philadelphia Citizen (January 20)

• If Worker Co-ops Work, Why Aren’t There More of Them? London School of Economics and Political Science (January 19)

• Honoring the Work of Helena Norberg-Hodge, Kindred Magazine (January 17)

SPONSOR CORNER

The National Coalition for Community Capital (NC3) is dedicated to educating, advocating, and activating community capital and serves as MSJ’s fiscal sponsor. Thank you for being a part of a growing movement! Contact NC3 for support in integrating local investing in your work: info@nc3now.org.

NC3 UPDATES AND ANNOUNCEMENTS

• NC3 CEO Chris Miller recently connected with the Revalue team of financial advisers to discuss approaches to values-aligned financial planning and investing. The meeting featured Angela Barbash, Revalue Co-Founder and NC3 Board Member, whose work reflects Revalue's mission to help clients align their financial decisions with their values through intentional investing and financial education. The conversation explored NC3's work in advancing community capital and how advisers can help clients who prioritize community impact and environmental considerations alongside their financial goals. Both organizations recognize the growing interest among investors in directing capital toward their communities, while also understanding that all investment approaches involve trade-offs in risk, return potential, and portfolio construction.

PARTNER NEWS & VOICES

• In Reg CF, Impact Isn’t a “Tax”—It’s a Competitive Advantage, Superpowers for Good (January 28)

• The Speech Heard Round the World, Capital Institute (January 26)

• Is Crowdfunding A Good Way To Fund Local Projects? The Bottom Up Revolution (January 22)

• The In(Put)s and Out(Put)s of Regenerative Economics, InCommon (January 22)

NOTABLE NEW RESOURCES

• Hiding in Plain Sight: Lessons from 600 Business Leaders Who Chose Values Over Short-Term Profit, Transform Finance (February 2)

• Homeownership in America: The Starter Home Is Dead. Now What? Prosperity Now (January 29)

• Building Lasting Ownership: Lessons in Community Governance, Wealth, and Resilience, Common Future (January 26)

EVENTS

• Mondays with Michael - Virtual Event: February 9, at 3 pm ET

• Alternative Ownership 101: How Innovative Ownership Structures Are Building a Regenerative Economy - Virtual Event: February 11, at 4 pm ET

• Black Farmer Fund: Investing in Black-Owned Food and Farm Businesses - Virtual Event: February 12, at 1 pm ET

• Impact Investing Info Session - Virtual Event: February 12, at 6 pm ET

• How to Help Your Local Government Break Up with Amazon, Save Money, and Support Local Business - Virtual Event: February 13, at 12 pm ET

• Key Insights: Hiding In Plain Sight Report - Virtual Event: February 19, at 2 pm ET

• Science and Practice for Just and Sustainable Communities - Virtual Course: Begins February 23

• The Future of Business: How Shared Ownership Drives Innovation and Performance - Virtual Event: February 26, at 12 pm ET

• Building Prosperity: Employee Ownership for Chicago’s Industrial Sector and Communities - In-Person Event (Chicago, IL): February 26

ASKS

If you or your community has a project on local investment that needs help, please let us know. We invite our readers to assist each other.

• From Janice Shade, Bard College: We invite you to take our Impact Investing Survey. This survey is the initial step in collecting data for broader research investigating the factors that influence impact investment decisions across emerging markets, especially for non-native investors. We’re interested in understanding which regions you’ve invested in, which you’re considering, and what factors shape your portfolio allocation decisions. Your insights will help identify opportunities to develop solutions that enable more capital to flow to high-impact geographies. If you know other people who might benefit from participating, please share this survey.

JOBS BOARD

• Doughnut Economics Action Lab: Business & Enterprise Lead

• Mission Driven Finance: Senior Manager of Marketing and Communications

• Weave Community Capital Fund: Fund Manager

About The Main Street Journal

The Main Street Journal aims to catalyze the movement of $50 trillion from Wall Street to Main Street, facilitating economic development and economic justice. It’s sponsored by the National Coalition for Community Capital, with grants from the Heron Foundation, Wallace Global Foundation, and the Bondi Foundation. We welcome feedback about everything, from our design to our content. Please send ideas to Jen Risley at jen@main-street-journal.com. 

Our Team:

• Michael Shuman – MSJ Publisher

• Paul Spinrad - Decent Tuesday Writer & Editor

• Jen Risley - MSJ Editor

• Wendy Wasserman - Strategic Advisor

PARTNERS

Abrams+Angell | American Independent Business Alliance | American Sustainable Business Network | Candide Group | Capital for Change | Capital Institute | Community-Vision Solutions | Cordata Capital | Council Fire | Crowdfund Better | Crowdfund Capital Advisors | Democracy Collaborative | Eleanor LeCain | Exit to Community Collective | Fair Food Network | Future Roots | Garlic and Roses | Impact Finance Center | ImpactPHL | Initiative for Local Capital | Institute for Local Self-Reliance | The Kassan Group |Longfellow Health Clubs | Mission Driven Finance | National Coalition for Community Capital | Natural Investments | Neighborhood Associates | Neighborhood Economics | New Majority Capital | Next Egg | Nonprofit Quarterly | Ownership America | Ownership Capital Lab | Ownership Matters | Partnership for Southern Equity | PathLight Law | Project Equity | Project for Public Spaces | Prospera Partners | Raise Green | Revalue | Rising Tide Capital | Schumacher Center for a New Economics | Shelterforce | Slow Money | SOCAP | The Super Crowd Inc. | Sustainable Business Network of MA | Transform Finance | Uwharrie Bank | Village Well | Zebras Unite

We welcome any nonprofit or for-profit entity committed to local investment as a partner. If your organization is interested, please contact Jen Risley at jen@main-street-journal.com.