Midwest Economic Outlook Summit - 2025

Summary

Highlights

• The Innovate 28 initiative aims to make the Midwest a leader in innovation by 2028.✨
• Strong focus on turning North Dakota into a hub for energy and technology sectors.🔋
• Matt Finn shared insights on macroeconomic trends, highlighting the resilience of the Midwest economy.📈
• Discussions emphasized the significance of workforce and housing in supporting economic growth.👥
• Economic leaders expressed optimism about AI and tech developments enhancing productivity.💡

Key Takeaways

• The Midwest is positioned for growth with major initiatives like Innovate 28 leading the charge! 🚀
• North Dakota is utilizing its abundant natural resources, especially energy, to attract industries and foster economic development.⚡️
• The economy experienced volatility due to changing rates and inflation, but remains resilient with community-driven solutions and innovation.💪
• There’s an emphasis on housing and workforce development to accommodate economic expansion in the region.🏠
• In the coming years, advancements in AI and technology are expected to significantly drive productivity and economic growth.🤖

Overview

Chapters

• 00:00 - 06:30: Introduction and Welcome Address The chapter "Introduction and Welcome Address" seems to start with background music, possibly creating a welcoming ambiance or setting the tone for the content that follows. However, the transcript doesn't provide further details or dialogue to elaborate on the specifics of the introduction or who delivers the welcome address. Additional content would be needed to summarize it more fully.
• 06:30 - 82:00: Keynote by Matt Finn The chapter titled 'Keynote by Matt Finn' contains very limited information with only a single utterance 'oh' in the transcript. This possibly indicates that either the content has not yet been transcribed or is missing essential details.
• 82:00 - 110:00: Panel Discussion 1 - Strategic Investment Trends The chapter begins with a warm welcome to the viewers and introduces the topic of the panel discussion centered around Strategic Investment Trends. It highlights the importance of strategic investments in shaping future business landscapes and economic growth.
• 110:00 - 115:00: Conclusion and Closing Remarks The chapter titled 'Conclusion and Closing Remarks' discusses the introduction speech by Shannon Full, President of the Fargo Moorhead West Fargo Chamber, during the Midwest Economic Summit. She energizes the audience with a call for more coffee and welcomes them to a day dedicated to 'Big Ideas'. She emphasizes that the summit is occurring at a pivotal time for the Midwest and beyond.

Midwest Economic Outlook Summit - 2025 Transcription

• 00:00 - 00:30 [Music] [Music] [Music]
• 00:30 - 01:00 oh
• 01:00 - 01:30 [Music] [Music] ladies and Gentlemen please welcome to the stage the president and CEO of the Fargo Morehead West Fargo Chamber of Commerce Shannon f
• 01:30 - 02:00 all right good morning everyone okay we need a lot more coffee in this audience so good morning everyone all right uh I'm Shannon full president of the Fargo Morehead West Fargo chamber and I'm honored uh to welcome you here to this year's Midwest economic Summit today is about Big Ideas we are standing at a pivotal moment not just here here in the Midwest but across
• 02:00 - 02:30 the country our economy is Shifting Industries uh our economy is Shifting Industries are evolving at break next break next speed the workforce landscape is transforming right be right before our eyes and with a new Administration the policies priorities and opportunities are all in flux so the big question is are we going to sit back and react or are we going to lead here in the far Morehead West Fargo metro we've
• 02:30 - 03:00 already made our choice we are leading our innovate 28 initiative is an ambitious Forward Thinking initiative designed to fuel Innovation Drive economic growth and ensure that we aren't just keeping up but we are the ones setting the pace think about this by 2028 where do we want to be I want us to be standing as a national model for Workforce Solutions business expansion and economic
• 03:00 - 03:30 competitiveness that's why today that's what today's conversation is all about we've gathered the top economic experts to break down the trends discuss what's ahead and most importantly figure out how we can work together to turn challenges into opportunities so thanks to the support of our incredible sponsors we're able to have conversations that don't just inform form but that drive Innovation collaboration and action so let's get started buckle up because we're going to
• 03:30 - 04:00 see firsthand the economic forces our region that are shaping our region and what they mean for our businesses thank you to our Premier sponsors Bremer Bank and C County Electric Cooperative for actively investing in the successes of our region both for our businesses and our community as a whole I'd also like to thank today's gold sponsor next next era energy and of course I extend my
• 04:00 - 04:30 heartfelt thanks to our media sponsors in forum and mwc advertising of Fargo Morehead your support plays a crucial role in amplifying our message to reach a wider audience in forum is broadcasting this Summit on 20 of their news sites across Minnesota North Dakota and South Dakota providing realtime coverage and bringing an important conversations that are happening here to people throughout the Midwest mwc promotes each Summit across its many
• 04:30 - 05:00 leading stations and hosts onair conversations with our expert speakers panelists and major sponsors thank you both to inum and NWC for your partnership and for helping us share these important economic updates for those attending virtually I'd also like to thank our silver sponsors am1100 the flag and wda Fargo Inc First International Bank and Trust Harland Trust Company Marvin
• 05:00 - 05:30 Minnesota State University Morehead North Dakota State College of science Prairie business magazine Pro Resources Sanford Health and Western State bank and our corporate sponsors who you can see listed on the screens are are give us all of give you all the access to today's insights additionally I'd like to thank Kent and the team at Livewire for all their work that they do to make this an exceptional production it truly is topof the line Dennis curl with 5'2
• 05:30 - 06:00 design Lounge you'll see him uh snapping your fabulous photos as he walks through the audience today and our venue sponsor for today's event is the Red River Valley Fair uh Fair Association Cody you and your team really do uh a fabulous job providing us this space another key factor that makes the Midwest Summit Series so impactful is the power of collaboration so in add addition to the
• 06:00 - 06:30 in Forum news sites this year 31 Chambers and associations from across Minnesota Missouri North Dakota South Dakota and Wisconsin are live streaming today's events in their own communities This truly is uh remarkable to think about 31 other organizations that believe strongly in collaboration you can see our incredible co-hosts on the screen now thank you all for your partnership and commitment to driving
• 06:30 - 07:00 progress here in the Midwest thank you to all of our sponsors and co-hosts for your support of this important event your dedication to fostering economic growth makes events like this possible and we are truly grateful let's give all of our co-hosts and sponsors a round of applause so the first part of our uh event today we're going to hear from economic leaders who can break down some of the landscape in North Dakota and
• 07:00 - 07:30 Minnesota so unfortunately due to the timing of the event and the legislative session the state of Minnesota was not able to send anyone to represent them today but they did send us a brief video to highlight some key insights looking into Minnesota's economy following the video I will have the opportunity to sit down with Rich Garmin from the North Dakota Department of Commerce for a moderated conversation as we dive into North Dakota's current landscape now please your turn your attention to the screens for a short video from Nila Mo
• 07:30 - 08:00 molgard director of The Office of small business Partnerships for the Minnesota Department of Employment and economic [Music] development hello everyone I'm Nila molgard the executive director of Deeds office of small business and Innovation on behalf of commissioner barck and the
• 08:00 - 08:30 entire deed team I'm excited to connect with you today to talk about Minnesota's economy I'm sorry we aren't able to be there in person especially because I'm proud to share our economy has real momentum and we're looking forward to working with all of you to keep that going for instance our labor market is having a particularly strong moment Minnesota has added jobs 10 of the last 12 months totaling nearly 37,500 in the last year our unemployment rate
• 08:30 - 09:00 is 3.3% lower than the national rate of 4.1% we have a strong Workforce these job figures are carried by one of the nation's most active labor markets our labor force participation rate is 67.8% more than 5 percentage points higher than the United States the news is even better locally job growth in the Fargo Morehead MSA is up 1.6% over the year outpacing the state as a whole
• 09:00 - 09:30 Beyond jobs we know that much of the economic narrative in the last couple of years was about Rising prices in other words inflation that was outpacing wage increases and therefore eroding the purchasing power for workers and families Minnesota has turned down that corner average hourly private sector earnings are up 5.4% over the year more than the rate of inflation and much faster than as the nation as whole the
• 09:30 - 10:00 good news for these workers is that we have a lot of new expanding businesses looking for employees in 2024 67,500 new businesses were formed that's nearly 50% increase over 5 years ago and businesses that form in Minnesota stay in Minnesota we have a high survival rate we're ranked 10th nationally for business survival rate with 54.2% of businesses formed in 2019 still
• 10:00 - 10:30 surviving in 2024 it's no wonder the US news world reports ranks Minnesota 4th best state for business and CNBC ranks us Sixth and not only are businesses surviving and expanding but they're finding a place for the products in a global Marketplace through the first 9 months of 24 Minnesota exports grew nearly 10% over the S same time period in 2023 compared to 3% nationally as you
• 10:30 - 11:00 can see our economy has momentum we're proud to have played a significant role in this alongside you and so many partners so next I'd like to go a little bit deeper into the details about Deeds work and our agenda for the year ahead first we continue to invest in business expansion last fiscal year our Core Business Development programs helped leverage nearly 1.5 billion in outside investment at business
• 11:00 - 11:30 expansions around Minnesota these Awards help create 2,000 new jobs and we're set to shatter that Mark this year so far the first six months of fiscal year 25 our business expansion programs have helped create more than 1,800 new jobs deed is helping ow this growth one way is through our Minnesota forward fund which has helped three companies polar semiconductor and skywater technology in Bloomington and solagen and Marshall Marshall secure
• 11:30 - 12:00 massive Federal Investments and create hundreds of jobs now we're asking the legislature to give deed even more flexibility to the forward fund allowing us to use our funding to support major business expansion even if they are not pursuing a federal match these companies are choosing to invest here to grow their business here and to create jobs here it's because Minnesota is uniquely POS position to offer the skilled Workforce
• 12:00 - 12:30 the spirit of Ingenuity high quality of life and worldclass infrastructure that businesses need to flourish it is our agency's job to help these companies lay the foundation for growth and we're doing that work every single day but businesses alone are not what makes a healthy economic landscape we're also making targeted Workforce Development Investments to create structured Pathways for workers to Industries where employment is in high
• 12:30 - 13:00 demand and offers family sustaining wages for workers as you know Minnesota's tight labor market continues to be a significant challenge for the state which is why we're working so hard to get more people into good jobs in important industries last year we launched a brand new program drive4 five designed to support five high demand High pay Industries technology caring profession s education manufacturing and the trades
• 13:00 - 13:30 through driver for five we're aligning Workforce training efforts with business demands and creating Partnerships between businesses trade associations and Workforce Development training programs to connect people to good jobs last year our grantees served an initial 1,200 people to build on the success of the program we're asking the legislature for 16 million for the program during the next bium helping us serve hundreds
• 13:30 - 14:00 more motans looking for good jobs and businesses looking to hire good people one of the best ways to loosen up our tight labor market is to get more people off the sidelines we'll keep working to help more motans join our labor pool and get good jobs I want to thank you all for having me and for your continued commitment to helping businesses succeed in your region and Beyond we are greatly
• 14:00 - 14:30 appreciative of the partnership and the opportunity to speak with you I hope today's Summit is informative and instructive as we work together to support businesses and grow jobs across Minnesota thank you so much [Music] so now we're going to take a a moment
• 14:30 - 15:00 and uh jump across the river in North Dakota please help me welcome um joining us for the conversation today is Rich Garmin director of economic Economic Development and finance for the North Dakota Department of Commerce let's give him a warm welcome well Rich while Rich gets settled in um I'm gonna give just a a couple more um um pieces of housekeeping
• 15:00 - 15:30 for you if you if your table run this is an important one if your table runs out of coffee there is coffee on the back uh in the back as well so please um make yourself at home uh come and go as you please and we'll jump right into the conversation today so thank you for joining us today we're glad to have you here Rich thanks for having me so for those that don't know Rich Spears spearheads economic diversification business expansion and strategic growth here in North Dakota so leveraging decad of experience in project management
• 15:30 - 16:00 infrastructure development and Strategic investment Rich Rich's expertise makes him a key voice in today's conversation but before we dive into the conversation uh just one more piece for all of you we want you all to be a part of the of the conversation so whether you're uh watching us virtually or here in the audience we've got a couple ways for you to do that uh first you could scan the QR code at your table or on the screens or for those online you can visit chamber questions.com chamber
• 16:00 - 16:30 questions.com to submit your questions we really do we've got some great prepared questions but we want this to be all about you and the questions that you have so if you've got particular questions please send them on up to us and we'll address them as we can so let's get it uh let's get it kicked off Rich can you start a little bit with just uh a little bit more about your role and your background sure sure thank you uh I'm not a native North Dakota so don't hold that against me but I married
• 16:30 - 17:00 one so um that counts that's how I got back to North Dakota um I spent 30 years in the electric utility industry I spent 15 years down in uh Wyoming and Utah and Oregon and Washington State while working for a big utility out west and in 2007 um I came home from work um wasn't loving my job at the time we were living in Wyoming and um my wife the native North dakotan asked me if I had ever heard of this company in business Mark and I'm like no I I haven't and she
• 17:00 - 17:30 goes well you're applying for a job there so so four months later we were we were uh packing and and heading for bismar so we we live in Mandan North Dakota now we've lived there since 2007 uh we moved back uh we I grew up to be fair I grew up in eastern Montana I was 10 miles from the border so it wasn't that far away we used to sneak across the border all the time and buy fireworks that were legal in North Dakota we'd BR bring them back to Sydney so um but that's that's how I
• 17:30 - 18:00 got back to North Dakota I spent 15 years in uh Wyoming and west of there and working for utility then I spent 15 years uh working for a Cooperative utility here in the state of North Dakota um a few years ago in 2021 I had the opportunity to uh to take a buyout from that particular utility and lo and behold there was an opportunity um with the state of North Dakota working in Economic Development um while working for the utility in North Dakota I had focused in business
• 18:00 - 18:30 development and economic development uh the latter part of my career there and so it was a natural fit to to step over into economic development in in North Dakota um May for the state of North Dakota I've been in uh I've been in the Department of Commerce and economic development and finance for about three almost three and a half years now um it's the best job I've ever had I love doing what I'm doing my job is to tell people how amazing and how great North Dakota is that's that's my full-time job
• 18:30 - 19:00 if anybody can match that let's let's compare notes because it's it's a great job I love doing what I'm doing and um there's so much opportunity in North Dakota right now there's so much to talk about so many good points to sell I I just can't I can't keep going I can go on and on about that for for hours but I suppose we should probably answer a few questions well yeah let's jump into it I will say this chamber gig is pretty good too so I might have yet uh but let's um let's talk a little bit give a give us a little bit especially for those that are
• 19:00 - 19:30 watching online or maybe aren't as familiar with the North Dakota landscape talk a little bit about the economy here in North Dakota in general and then we'll get into some of the sectors sure uh I I think anybody that's has a pulse understands the economy in North Dakota um is booming it's it's moving uh fast forward all the time uh even in the worst of times North Dakota seems to be doing better than anywhere else in the nation uh because we're Diversified um and and the things that we do uh we're
• 19:30 - 20:00 resilient um back in the utility industry we used to talk about all of the above and a lot of times that meant all of the above as long as it mine was in that list you know um but all of the above in everything we do in North Dakota we're willing to try everything and anything to make sure that we can keep moving forward um to steal a words from uh from the governor I think the state of the economy is strong I think that's I plagiarize that from the governor's State of the Union Address or State of the State address I think but I think he
• 20:00 - 20:30 plagiarized it from previous Governors but the State of the State is so strong we used to I used to believe that I had to go out and really sell North Dakota that's not so much the case anymore um the Secret's out North Dakota people are are are knocking on our doors at a very rapid Pace the biggest reason they're knocking on our door is our availability of energy um energy is what's driving so much of the economic development right now so that's that's
• 20:30 - 21:00 the key driver right now is economic in economic development is energy development we've got a long ways to go but we've got a lot of opportunity in economic develop I mean in energy development yeah let's talk a little bit about energy and and Power in as a you know kind of the the focus on that we know that uh a lot of the National Security is tied to the to energy production uh what what are you seeing as some of the um uh most opportunistic aspects of the energy sector for here in in North Dakota yes thanks um bottom line is
• 21:00 - 21:30 North Dakota has I I know this is not a fair term almost an infinite supply of natural gas now that's obviously not true but we have an amazingly large supply of natural gas in the state and it's growing every day and that's based on our oil production um the oil production that's as it matures in the state there's more natural gas that comes up out of every well for every barrel of oil that comes up um it's a great problem to have right now but
• 21:30 - 22:00 we're at a point now where that natural gas has just about filled the the lines exporting that natural gas from the state they're they're nearly full I don't have the statistical data on that handy but let's just call them almost full we are working hard to find projects that can utilize that energy we have a lot of energy we don't have a lot of electricity we have a l we have quite a lot of electricity but we we need more electricity every business that's out
• 22:00 - 22:30 there every um value added egg project every AI project every data project needs lots of energy um typically in the form of electricity we've got that we've got that in Spades and that's what is attracting most of the companies to the state right now is our amazing amount of energy that we have available the lift we have right now is to convert that into the right type of energy or the approp rate type of energy for the project everybody's talking
• 22:30 - 23:00 about data centers AI things like that right now they need electricity they need a lot of electricity we can provide that but we have to build off the infrastructure to to get that done and that that infrastructure includes pipelines uh to move that gas from 08 point B and it includes power generation sites so so in addition to the power um needs uh you mentioned some of the industry sectors that we're hearing uh that have great growth and potential AI uh value added a uh what what can we be doing here in
• 23:00 - 23:30 North Dakota uh to better position ourselves for those companies one of the greatest things we can do is to educate ourselves um one of the stumbling blocks that we come across often is is lack of knowledge of a project before we make a decision on a project as a as a city leader or a county leader or Township leader or
• 23:30 - 24:00 whatever educ let's educate ourselves and understand what a data center really is what a what a soybean processing plant really is what it does um ethanol name name the project it doesn't matter what the project is let's really educate ourselves and understand what impacts they'll have on your community they're going to have impacts a lot of them are positive some of them are are maybe not as positive and and just from a from a noise standpoint or from a for something else but really educate yourself and
• 24:00 - 24:30 don't don't let fear or or lack of understanding Drive decision- making understand it educate educate ourselves on what's going on most of these projects that we're bringing to I fact all these projects we bringing to the state are are good for the economy of the state of North Dakota now we have to place them in the right spots um I don't want to build uh some industrial facility in the on you know on Main Street downtown far but there is a there is a place for
• 24:30 - 25:00 those facilities to be built educ let's educate ourselves and and and have that knowledge before we make decisions on on saying no let's not say no until we educate ourselves we're not doing a lot of that right now saying no but there's enough of it to say let's let's let's eliminate that from our conversation by by educating ourselves so yeah I think that's so important the education side of it uh the other part that that I noticed coming here four years ago uh was that we don't often tell our story
• 25:00 - 25:30 real well in North Dakota I know that's part of your job it's part of uh many of our elected leaders are looking at how do we how do we do that um so when we're when you were thinking about attracting um we when we talk about attraction both in the business sense that we want to bring new companies here to North Dakota uh but let's also talk about the workforce component of it there's no doubt that um uh we have a Workforce shortage just like everywhere else across the country uh what is the state doing around uh Workforce attraction
• 25:30 - 26:00 retention development uh can you give us a little glimpse into the workforce lens a little um um that's that's not my my uh area of expertise but I I uh I have full uh full faith in the uh in the leadership that's that's trying to to work that problem um Workforce Development is actually a a division within Commerce as well um led by Katie uh Rolston how they they have their hands full there's a there's a lot to do
• 26:00 - 26:30 there and there there are several programs that are out there and it's more than just Workforce um uh Child Care is a Workforce issue housing is a Workforce issue quality of life in the communities is a Workforce issue you've got to have all those things in place to make it attractive for people to want to come live in North Dakota and they're doing their level best I mean across Commerce also in Commerce is uh Community Development which is the quality of life issues you know making sure we have nice places to live um all
• 26:30 - 27:00 of that together from our side of the fence and economic development and finance um technology um automation automation used to be scary now it's sort of a godsend um autonomy sort of related to automation but utilizing the the the the best technology out there to get the job done um letting the employees do the jobs that are the most necessary and maybe not the the the the most mundane of jobs let's try to
• 27:00 - 27:30 automate those and maybe take those out of the out of the lineup so that we can focus on the jobs that are the most important to get the the most of the work done but it's it's so multifaceted and you're right we we have a a Workforce deficit you hear that every single time anybody picks up a microphone it's a it's a big problem that has many many solutions being being worked to try to make it work for the state great so when we think about um uh
• 27:30 - 28:00 the key drivers for economic development when we're when we're looking at business attraction obviously uh but there's a lot going on uh to cultivate businesses here whether they be small businesses to the to Second Stage or perhaps it's the entrepreneurial climate can you talk a little bit about some of those um drivers that are driving business growth here in the region sure sure one of the biggest things that drives business growth I think in North Dakota is accessibility um and it's I don't know how to put that on a on a one
• 28:00 - 28:30 pager really and I don't know how to bottle that but it's accessibility to to elected officials to um regulating regulator officials is that a phrase I'm not sure that's right um but it's accessibility uh we you joke about North Dakota is a small town with a really long Main Street it truly is everybody knows everybody in the state and that's either very very good for a project or very very bad for a project if you if you make a mistake and you do bad things people in rugby and won know it in
• 28:30 - 29:00 within a matter of hours but if you do good things that that also gets out and so accessibility is huge that that's a huge driver and it's hard to explain that to people that have never had that before when you talk to folks from other states they don't they don't have access to the deart Department of Environmental Quality in some other state I won't pick on any states in particular or or water resources or the governor's office or
• 29:00 - 29:30 the Commerce commissioner or whoever it is they don't have access like that we offer that in North Dakota um we also have I mean we've talked about it already but we have energy for days literally I mean we've got energy for that that other states Envy we just have to work on how we get that energy in the right form for the right projects there are several programs out there as well um that that help attract various levels of of companies um there's various tax uh tax policy
• 29:30 - 30:00 opportunities where you can be sales tax exempt on certain projects there's property tax um options that that can some property taxes can be waved at the local level um there's there's some granting programs not a lot there's several loan programs um one of the key ingredients that North Dakota has too that nobody else has is their own state run Bank um that's unique and when you tell people that they almost don't believe you and they don't understand what that means means but it's it takes
• 30:00 - 30:30 away a lot of risk on a lot of projects because North the Bank of North Dakota I won't speak for them or get in trouble for that but but they do step in on a lot of projects and they may take on a little bit more risk and partner with other Banks where they wouldn't have that opportunity in other states so kind of come at it from 10 different directions and and offer that o those opportunities so yeah that is a really unique um feature and option with the Bank of North Dakota I know some of the the companies that we've talked about just the com the the ability to
• 30:30 - 31:00 complement the Traditional Bank we have a lot of banks in the audience today so being able to complement some of that to share some of that risk and that uh we also are seeing um a a new level of venture capital interest coming into to the state uh can you talk a little bit about what that um that flexibility in financing allows for mainly small you know startup or small businesses and how important that is for us sure we have a a couple opportunities I won't steal Cody's Thunder I'll let her talk about a
• 31:00 - 31:30 lot of that but but just a little bit that we have within the Department of Commerce um my division is economic development and finance the and finance part um contains several opportunities and one of the biggest ones is the North Dakota Development Fund um I don't know if I would qualify it or call it exactly a venture capital opportunity but it it sort of looks like one and acts like one well they will they will take calculated risks on various projects um generally in this several hundred, to
• 31:30 - 32:00 several million dollar range but they give opportunities to projects that may not be completely bankable at another bank they may need to have some of that risk taken by an entity like like the North Dakota Development Fund there's also other funds out there that we have opportunities to use uh Lyft Legacy investment for technology I think I got that right um and a few others that that offer early early companies an opportunity to to gain access to some
• 32:00 - 32:30 cash um up front so they can get they can get moving forward there's a few others um there's some outside of our department um in the egg World um there's um apuk apuc and then ad which are more geared towards agriculture um there's a couple that are also managed by the industrial commission renewable energy commission or Council and um cing sustainable energy Authority obviously those are aimed at sort of the egg energy Nexus um so there's a lot of opport ities to to get access to funds
• 32:30 - 33:00 for projects what's the best way so when we have all of these different programs I think about this as a a small business owner you're just trying to do your business every single day right um what's the best way to find or figure out those programs because I I know that's something I've been um vocal with the state we're in the middle of the legislative session right now we need to make it easier uh for the business owners to understand what's available to them what's the best way for uh a company to find out more about these
• 33:00 - 33:30 programs well I'm going to have to lay a definition out first um primary sector what does primary sector means primary sector H has some certain um bars that a a company or or a project has to get over they're basically on bringing New Wealth into the state we want a certain amount of new wealth and a certain percentage of that new wealth has to come in from out of state because we want it's important to churn the dollars in the state but it's also very important to bring in dollars from outside of the state so my division works primarily with primary sector um
• 33:30 - 34:00 but there are opportunities for non-primary sector companies as well that those would maybe be less dollar value or or less percentage of income coming from out of the state so for the primary sector projects I I have a team of six individuals that all have various subject matter expertise expertises that range from uas technology to uh value added egg energy manufacturing and I'm leaving somebody out I'm sure um
• 34:00 - 34:30 but the very fastest way and the most North Dakota way is to work with one of those folks and they will hold your hand from point A to point B to make sure that you understand all the programs that are available we put together what's called an incentives package we'll gather information on your project in particular get some some cash flow numbers get some you know employment numbers things like that and put together a package for in an individual company that's custom tailored to you now if it's non- primary sector we do have opportunities for them as well um
• 34:30 - 35:00 many of those right now would flow through Community Services but that's also a division of Commerce so that's just across you know across the hall uh same same office so contacting us is the best way and I think the term concierge level is what we would give them we would give them that level of effort to help them through the process great so one of the audience questions thank you so send some more that'd be great uh but one the audience questions coming in can you talk a little bit about the
• 35:00 - 35:30 regulatory Andor tax environment in North Dakota yes some I can um it's it's far more attractive than most States um I go back to the access uh we have access to many of the regulatory agencies in the state so we can bring these companies to the permitting agencies on day one they can meet with the appropriate people on on the first day that they come to the state uh there's no there's no surprises
• 35:30 - 36:00 there's no gotas if they need a water permit an air permit a solid waste permit what whatever the number whatever it is they have that opportunity to meet with the right people very early on on their project so there's like I said there's no gotes at the last hour on the project um that's again I don't know how to Market that other than to just tell people that but most of them won't believe me because that's not the way most of the rest of the country operates another thing that we have in North Dakota is Primacy a lot of people don't understand what
• 36:00 - 36:30 Primacy is um but it really becomes apparent when we talk about carbon capture use and sequestration ccus um basically capturing CO2 off the backside of either ethanol plants or power plants or other places what do we do with that carbon dioxide after we capture it we can utilize it that's that's my goal I want to use it all we want to add value to everything or we can sequester it we can push it underground and and store it infinitely underground there's only three states in the United States
• 36:30 - 37:00 right now that have privacy and one of those States is North Dakota in fact North Dakota was the first one so us Wyoming and Louisiana are the only three states that have that Primacy well what's that mean it means that the North Dakota Department the regulatory agencies in North Dakota can permit those Wells and it's not reliant on the EPA that's probably enough said right there but I haven't checked in quite a while but I don't think there's been a permit approved a a carbon car carbon dioxide sequestration permit approved by
• 37:00 - 37:30 the EPA in over seven years so I don't know what the time frame is but it's over seven years I think it generally takes North Dakota six to nine months maybe a year call it a year they can have the permit in your hand before you're ready to sequester the carbon dioxide that's huge so that's the regulatory part of it the the the tax environment is really good and getting better um if you've heard my new my new boss's boss I guess uh Governor Armstrong uh one of his key key points
• 37:30 - 38:00 is uh property tax reform that's only going to help make North Dakota more attractive for that Workforce that we're so Desperately Seeking um it's one more Cog in the wheel uh income taxes are are very low in North Dakota they're not quite zero yet but they're darn close it actually almost becomes a sticking point I'll have a company come to us and say well California offered us a $10 million tax abatement and I'm like
• 38:00 - 38:30 well how about if we just don't charge you $10 million and only charge you a million dollars they they have to stand back and think about that math it's like the only reason they're offering you a $10 million tax abatement is because they were going to charge you $10 million in the first place we were never going to charge you that money so we got to do the math with them a few times get the Whiteboard out and and talk to him about that so the the although we're trying to lower the tax burden in North Dakota it's already pretty low compared to the rest of the nation so I it's one
• 38:30 - 39:00 of our tools it's one of our best tools that we can use to recruit companies so makes us very competitive yeah so I know that um there are really exciting industries that are advancing here uh and I know that when we when we're able to hear stories of some of these companies or or projects that you're working on um not the ones that are under NDA but the others uh can you share a little bit on some of those industries that whether it's UA or it's uh EG Tech uh whether it's
• 39:00 - 39:30 manufacturing and can you just give a little bit of an example of the kind of the diversification that we're seeing out there sure sure one one of the we've talked about we've h on this two or three times already today but one of the big drivers in the state is utilization of natural gas that's sort of coming to the to the top at the at the exact right time there's a huge demand for energy worldwide right now and that's being driven by data uh AI data that's being
• 39:30 - 40:00 driven by that when I work for the power companies if if we had a load uh a power load request I can't remember who I was talking to right before the meeting here but of two or three five 10 megawatts that that was a big request we're not even close to that anymore we're in the you had to add at least one zero if not two zeros to those requests so requests for a th000 megawatts are are pretty common right now um we don't have that right now but we're
• 40:00 - 40:30 we're getting closer and closer to that opportunity we have like I said we have the energy we just have to be able to convert it into electricity that's going to take pipelines that's going to take power uh Power Generation units and it's going to take a lot of a lot of capital um and a little it's going to take some Drive uh right now the natural gas is concentrated in the western part of the state obviously we have to build out the infrastructure to bring that further and further east um there's at least one
• 40:30 - 41:00 project if not two to bring it at least to the Missouri River right now and then plans to continue on East eventually hopefully here um so we can keep driving that that uh those opportunities to bring that natural gas all the way across the state so data that's a huge project that's coming to the state of North Dakota do you know one of the things that they love in the data industry that North Dakota has just been gloriously displaying over the last four or five days let me guess yeah it's GNA have something to do with the weather cold
• 41:00 - 41:30 weather is dat's friend they love cold weather um the facility that's being built down in endale they they shared with me a number I probably I'm going to mess it up here but the power factor for a facility say like in Georgia is like 1.5 what that means is they need about 50% of their energy to not run their data processing they need about 50% of their energy basically to cool their facility it's 1.2 or so in North Dakota that's a significant drop so you'll be
• 41:30 - 42:00 able to take that power and use it so much more efficiently in North Dakota because it's cool here more of the year and it's it's a great opportunity so data AI it's not going to slow down and North Dakota is prime to be able to take part of that we're also a very well-connected State and that surprises some people for being such a rural state but we have very good fiber Connection in North Dakota some of the best in the nation um utilizing other opportunities to use natural gas natural gas is part of processes um we've got an iron ore
• 42:00 - 42:30 processing plant that's looking at Landing in the state um that needs energy they need electricity and they need natural gas for their process and and and to power their their system so who have thought we would be an iron ore processing facility here in the state a nickel processing facility is looking to come to the state too I won't mention where they're coming from but it's not very far from here um five miles four miles um actually is further than that but um but they're coming to North
• 42:30 - 43:00 Dakota to take advantage of the Abundant available energy sources that we have uh uas technology is just idling waiting to go uh there's so much opportunity in the uas world and North Dakota has become a leader in in that right now there's a bill in the in the state legislature for uh the the Northern Plains test site in Grand Forks to be able to have access the bill is to fund the opportunity so the uas or the
• 43:00 - 43:30 northern PLS test site can have access to FAA radar I had to have them explain that to me what that meant but the FAA doesn't allow anybody access to their radar data it's very well controlled the uas test site Northern Plaines test site in in in Grand Forks has built that confidence in the FAA FAA and now has access to that data what's that mean they can fly drones now with that data when they have that Beyond visual line of sight which means
• 43:30 - 44:00 they don't have to see the the Drone what that they're flying they can track it with radar think about flying airplanes if we had to maintain visual line of sight with airplanes that we flew we wouldn't be where we are today well that's coming that technology or that opportunity is coming in in the in the uas world as well so that's great um let's maybe we'll touch a little bit and and the all of the um advancements in as are really spectacular we've got um
• 44:00 - 44:30 let's talk a little bit about uh agriculture because the diversification in agriculture is significant here everything from egg Tech to value added egg to um now we're seeing a lot more uh investment in livestock uh options here can you touch a little bit on the kind of the future and the Horizon of Agriculture because so much of this we're hearing from a national perspective um both National Security is dependent upon energy resilience it's dependent upon food security touch a
• 44:30 - 45:00 little bit on agriculture one phrase you use there was value ad that that is the that is the key phrase in everything we do North Dakota is really good at producing Commodities we produce um oil we produce natural gas we produce even electricity although it is processed from coal or natural gas that's still viewed as a commodity resource that that's generally shipped out of state same in the egg world uh until three years ago every soy being
• 45:00 - 45:30 produced in the state was shipped somewhere else um corn was that way prior to the six corn ethanol produ production facilities we have in the state now adding value to those Commodities is is the key to success in North Dakota so in the last like I think it's three years we've gone from 0% soybean produ processing in the state to I think it's about half now between uh spiritwood uh the green bis facility in
• 45:30 - 46:00 spiritwood and then um the facility in Castleton it's about half so that's incredible and there's more on the horizon there's more facilities on the horizon that are looking to process soybeans uh corn ethanol uh that that's a little bit older Market that started in the mid early 2000s like 20078 n where they were they were building out ethanol facilities I think there's six in this state I might be high one but um but that's taking on a new life as well
• 46:00 - 46:30 there's a new demand for sustainable aviation fuel um which is a a lower carbon option for for airplanes um aircraft that can be made from ethanol it's not cheap it's it's not easy if it was easy it' already be being done right but that's an opportunity that's out there to take the ethanol coming from the ethanol plants add more process to the backside of those ethanol plants and produce sustainable aviation fuel so that's one more value add we can
• 46:30 - 47:00 do we already adding value to the corn by making ethanol we can continue to add value to it and make sustainable aviation fuel um animal agriculture that's becoming the regulations on that are being or the restrictions on that I shouldn't say regulations the restrictions on that are being loosened somewhat so that we can attract animal agriculture facilities because guess what now that I have all these ethanol plants and all these soybean processing plants one of their main products is a feed product why don't we take that and
• 47:00 - 47:30 continue to add value in North Dakota rather than shipping that feed product to somewhere else as well so it's a continue value ad stream everything that we do what's the next step so just continuing to add value is there's we're never done I will say we will never be done we want to continue to add value to that stream so well clearly there's a lot of uh exciting opportunities here in North Dakota and Rich we're so lucky to have you uh with us today thank you so much for taking time uh we we are excited for the future
• 47:30 - 48:00 here thank you so much for the opportunity um I I hope it shows I love what I'm doing I have so much fun doing what I'm doing uh it's an incredible opportunity I've had you know late in my career I I was I never pictured myself doing what I'm doing today but what what a great opportunity and what what a great place to be doing it is in North Dakota so oh wonderful well thank you please uh give Brer thank you all right now we'll move
• 48:00 - 48:30 on please help me welcome one of our Premier sponsors of the day Ray GFF shine to the stage from brummer Bank when you're running a business you don't have time for doubt you need a banking partner you can trust one who is as invested in the success of your business as you are and has all the products and services you need Under One Roof at Brier Bank we're here to listen and learn because you know your business best and we'll back you up with insightful advice and personalized
• 48:30 - 49:00 solutions that help you achieve your goals work with Brer bank because understanding is everything good morning everyone Ray gin Fargo market leader at Brer Bank Brer bank is proud to be a sponsor of today's event and a longtime partner of the chamber Brer has been helping communities throughout Minnesota North Dakota and Wisconsin Thrive for more than 80 years and we are more excited exed than ever about what our future holds the chamber has a mission of being
• 49:00 - 49:30 a catalyst for growth and prosperity events like today provide an excellent opportunity to connect with each other and hear from Top economic experts about issues that are important to our local businesses in Midwest Region's economic future I would like to thank the chamber for organizing this event and everyone in attendance for taking time out of your busy schedules to be here today next we have the privilege of hearing from Matt Finn today's keynote speaker with over 30 years of experience
• 49:30 - 50:00 in trust and Investment Management Finn is the chief Economist at 1834 a division of Old National Bank he leads the company's economic Outlook asset allocation guidance and portfolio management Finn has volunteered with a chartered financial analyst Institute for over 20 years grading CFA exams and contributing to the profession he regularly speaks at conferences on the US economy and has mentors mentored and led teams at Old National throughout much of his career Finn holds a
• 50:00 - 50:30 bachelor's degree in economics from the University of Missouri and is a graduate of the American Bankers Association National Trust school and northwestern's ABA National graduate trust school he is also a chartered financial analyst Charter holder and a member of the CFA Institute at the end of Matt's presentation Channon will join him on stage for moderated Q&A you can submit question questions using the QR code at your tables or by going to chamber
• 50:30 - 51:00 questions.com you can ask questions anytime throughout the presentation so please help me welcome your keynote speaker for today Matt [Applause] Finn thanks sir appreciate it well thank you so much for the opportunity to be here make sure my clicker works okay uh you know you know there's no shortage of what I call economic Point forecast what are what's
• 51:00 - 51:30 the yield on the tenure going to be in 6 months or what's you know what's the unemployment rate going to be in you know a certain number of months and I tend to really focus on bigger picture things because I've noticed that most of the time when those economic data points come out economists like me spend most of their time explaining to you why it doesn't match their forecast and so you kind of right so you kind of give up on that and and the analogy that I've used
• 51:30 - 52:00 with the economy is if if I'm a shop owner in a port city what I need to know is there's a cruise ship arriving tomorrow it it doesn't really matter whether there's 3,462 passengers or 5,280 passengers right I just need to know that there's a cruise ship coming tomorrow so I tend to again focus on what I call bigger bigger picture items so I'm going to run through some things uh uh particularly about the North Dakota and and Regional economy and then and then sort of dive
• 52:00 - 52:30 into what uh I I see as again longer term trends that are unfolding um there are a lot of moving pieces uh among them uh Trump 2.0 we were talking uh last night that I'm I'm actually sort of struck by the idea that people aren't uh calling out more of a contrast between what's going on in the first several days of of this Trump Administration versus what happened in
• 52:30 - 53:00 the last Trump Administration and my feeling is he sort of got caught off guard perhaps on his first time around and decided not to make that same mistake whether you agree with it or not that's probably what he's doing uh we've got monetary policy easing now I know the FED is currently on hold uh we don't expect the FED to lower rates based on most recent economic data things like CPI coming out a little hot the unemployment rates uh dropping uh so
• 53:00 - 53:30 we're kind of in the camp of uh the fed's going to be on hold for a while we've got immigration tariffs inflation energy policy uh and and some demographic changes so what I thought you know I'd run through right quick is to see you know how all of this macro environment is impacting uh or does it support growth in in North Dakota so you take oil and gas for instance
• 53:30 - 54:00 well sure the current Administration is very Pro energy development and and reducing the requirements for permitting and and all the things that they're doing uh freezing regulations and and the like is is going to be generally positive for energy development here in in the dtas uh for agriculture uh I put a question mark there being from Indiana uh which is agricultural State I've never met a farmer who goes yeah
• 54:00 - 54:30 everything's fine don't need a thing it's all good right so so I put a question mark there to keep them happy right because if I said oh yeah everything's fine that you know they'll find something to argue with you about um in terms of manufacturing you know and I'm talking about just I'm using that in the broadest sense of the term but but manufacturing meaning we have a uh freeze on new regulations that the federal level which is going to be good uh for for small businesses uh
• 54:30 - 55:00 streamlining you know processes for small businesses application processes and the like so in general tax you know there there's a focus in Washington on lowering corporate tax rates and tax reform so in general my point here is that the setup is pretty good for for manufacturing and of course defense spending I think you know we can all see that there's going to be increased defense spending under this Administration and so I think that's
• 55:00 - 55:30 good uh you know overall for the economy in terms of opportunities then for for North Dakota um I I did some did some digging and found out that only 4 and a half% of North Dakota residents are foreign born compared to 14% in the US as a whole and my point here is this is just an opportunity uh uh for North Dakota to increase uh the percentage of of
• 55:30 - 56:00 immigrant population higher education while more North Dakota residents have a high school diploma than average fewer have a college degree only about 32% compared to 35% in the US as a whole you've got great universities here in North Dakota there's a lot of opportunity uh their broadband internet uh just slightly behind the us as a whole about 87 and a half perc of North Dakota households have access to broadband
• 56:00 - 56:30 internet um more people in North Dakota work that's probably no surprise to the people in North Dakota the participation rate the number of people that are uh of an age to be in the labor force that actually choose to work is 67.8% compared to about 63% in the US as a whole and substantially more women work in North Dakota 64 4.2% versus 58.7% for the national average and
• 56:30 - 57:00 people here work hard uh again that's probably no surprise if you're from North Dakota but I was shocked to find out because I had never looked at it before that North Dakota has the sixth highest per capita GDP out of all 50 States GDP for the United States is about 66,000 800 per person and in North Dakota it's
• 57:00 - 57:30 $774,000 so people here work hard people here aren't afraid to work and so that's that's great for the state and I I think uh you know you know again this is these are a lot of opportunities what's sort of working against us here is uh and my colleagues have heard me mention this slide you know a lot of times every day in the United States for about the next Dozen Years or or so 10,000 people turned
• 57:30 - 58:00 65 let that sink in 10,000 people a day it's 300,000 people a month that's 3.6 million people a year turn 65 every day so what are the implications of that well the good news is that you know the population of North Dakota is slightly younger than the us as a whole 177% of North dakotans are over 65 uh compared to 17.7% for the US
• 58:00 - 58:30 however while the total population of North Dakota grew 15.8% between census 2010 to 2020 the percentage of North Dakota residents over the age of 65 grew 26% so you're not immune to the fact that as an econ you know as a as a state you're getting older just like the rest of uh just like the rest of the United States there are
• 58:30 - 59:00 fewer young people in an older labor force I think this graph is sort of interesting what I want you to see here is the blue line that's at the sort of at the top represents the number of workers who are aged 20 to 24 okay and the uh gold tan line is the labor force the United States what I want you to see here is and this is a problem that we're coming up
• 59:00 - 59:30 against is the number of young people in the labor force today is the same as it was in 1979 but there are a 100 million more people in the labor force so what that tells me is the percentage of young people in the labor force has gotten much much smaller and the labor force has gotten much older so this is a transition this is something that we're going to have to deal with as we go as we go over the next say decade North
• 59:30 - 60:00 Dakota has the second highest percentage of young workers 20 to 24 in the whole United States at 7.6% some states are as low as 5% of their workers so North Dakota does have a good resource here and that you have young workers you have some great colleges you need to retain those people in the state in order to promote OTE Local Economic growth this is a slide I've had for for
• 60:00 - 60:30 quite some time because the demographics don't change that fast the blue bars represent the yearly change in available new workers and what I want you to see is you know back in 2000 we were adding as many as two to two and A4 million new workers into the labor force each year and that has been steadily declining now you can see the disruption that came as a result of covid but we're back down to
• 60:30 - 61:00 we're only net adding about a half a million people into the labor force each year so where's the rest of it coming from if you think about our labor force there's again about 177 million people in the labor force we add as an economy 2 million new jobs a year five 500,000 of them are coming from us-born
• 61:00 - 61:30 workers where's the rest of them coming from immigration immigration has filled the majority of new jobs in this country for the last several years because we don't have enough we don't have enough people in in the United States to fill those jobs the line at the top is the fertility rate okay the the average woman is only having 1.6 children that's below the replacement rate of 2.1 and so we're producing fewer
• 61:30 - 62:00 children in in our in our economy and yet we're expecting it to grow 2 and a half or 3% a year how how are we going to reconcile some of this further Graphics employment growth is slowing this is again the civilian labor force by decade this is just a growth rate and you can see that as the Baby Boomers have worked their way through the the number of new workers has been
• 62:00 - 62:30 steadily deining so what we're looking to replace that with is AI and technology and and that sort of thing I'll get into that in just a second this is a chart that's showing the share the share of foreign born workers by occupation not the absolute number so the way you interpret this is the construction industry has the highest
• 62:30 - 63:00 share of foreign born workers at about 30% the most foreign born workers are in education and Health Services which is about three or four from the bottom that has the most workers but that industry itself is much bigger than the construction industry so the share of foreign born workers is not quite as high what I want you to see here is is if we get a little
• 63:00 - 63:30 overzealous with immigration reform uh and and if we get a little overzealous with deporting uh workers this is where it's going to hit first because these are the industries that are most vulnerable uh that because they employ the highest share of foreign born workers what are we doing about this well uh my friends at the association
• 63:30 - 64:00 for advancing automation or Au cubed uh gave me some statistics on this is the this is an industry trade group and they've gathered up the share of a sales of industrial robots and and the blue lines represent Automotive applications so we've all seen the industrial robots that are painting cars welding on cars flipping them over dipping you know doing all that stuff but what's interesting is now
• 64:00 - 64:30 56% of industrial robot sales are going to non Automotive applications so I made this comment before we'll see how many people get it if you want to know when Sky Net gets built it's probably right around this time uh if any of you have seen that movie um but I think what's interesting here is uh two of the fastest growing segments are food processing and handling that's had 60% year-over-year
• 64:30 - 65:00 growth and pharmaceutical prescription processing that's had 43% year-over-year growth in automation I don't know if any of you saw this a couple of weeks ago it it was in the Wall Street Journal and and and Google Quantum AI had released this data that they're working on a quantum computer that was able to solve a very complex problem problem uh in about 5 minutes that would take the current
• 65:00 - 65:30 world's fastest supercomputer 10 to the 25th years to solve the same problem so right about the time that we're having difficulty with an aging population right about the time we're having difficulty getting young workers into the labor force right we're coming up with creative AI Solutions I I I've said this is a
• 65:30 - 66:00 technology that perpetually feels like it's about 5 years away but it may be only about two years away in other words we're advancing so fast and and we're making so many inroads in in AI that this may be what keeps us what keeps our economy humming along right about the time that we're starting to run out of of live bodies to to fill some of these jobs Tech investment drives productivity what
• 66:00 - 66:30 you can see here is this is the amount the percentage of GDP that we spend on intellectual property and communication technology you can see that the United States down at the bottom leads all other developed countries in the amount of money that we spend on intellectual property and I think this is very very important because Tech drives
• 66:30 - 67:00 productivity productivity drives economic growth and what you can see here again is that the average annual growth in our GDP is driven by largely gains in productivity and some in adding new people into the labor force whereas when you look at say the UK or other countries most of their gain comes from their Reliance on still adding people
• 67:00 - 67:30 right countries like Germany and France the UK are in the exact same situation we are they have an aging population they have trouble getting young people into some of the trades they have trouble getting people into jobs that they need to fill and what's happening to them is they're still relying on their old model whereas the United States is embracing the fact that we need to raise productivity by employing
• 67:30 - 68:00 technology I'm going to skip over this real quick but this is the latest beige book uh from the Minneapolis fed and it's this is actually this is the beige book from all of it but uh overall um growth is increasing slightly in all the regions you know that the FED uh covers but not at a not at a high Pace in other words there's still a lot of disruption I think this next slide is really more interesting what this shows is um in
• 68:00 - 68:30 previous beige books how often respondents talked about things like a Slowdown um lending issues inflation supply chain concerns and suddenly everybody's talking about tariffs everybody wants to know how tariffs are going to impact uh their their district and so that's getting a lot more attention we are uh in the camp
• 68:30 - 69:00 of we're not forecasting a recession we're not forecasting uh even a soft Landing which would imply that we touch down to a zero growth rate and then take off again we're we're forecasting that the economy of in the United States is going to continue to to grow at 2 and a half% or so you know this year so and probably you know a little a little bit better than that uh perhaps next year the latest employment report that
• 69:00 - 69:30 came out showed that uh the unemployment rate dropped to 4% it was a little bit higher uh for 4.1% the the previous month you may have noticed that some of the comparisons get a little difficult because what happens is uh the Bureau of Labor Statistics survey businesses just like they do you know with with political surveys they survey
• 69:30 - 70:00 a percentage of businesses and then extrapolate what the national unemployment rate is what the number of jobs created is all of that as they go throughout the year and they get better data they actually get more detailed uh data on the number of businesses that have been created it's called the birth death model they actually get better data on unemployment claims who's filed they they go through what's called a benchmark revision they get better
• 70:00 - 70:30 population estimates from the Census Bureau all of that and so all throughout the year it's estimates upon estimates upon estimates and then once a year they go back and they reset all their data so it makes comparisons between usually January and December are are not good month over month because they they've reset the benchmarks but nonetheless what we're seeing here is is we've got a solid economy and I've said all along that it's kind of hard to have a recession when everybody's working right
• 70:30 - 71:00 so again we're in the camp that the economy is going to go along uh uh pretty well in in 2025 this is a graphic here of uh yeah how normal people look at inflation because what I've graphed here is at the top line is the cumulative change in prices since January of
• 71:00 - 71:30 2021 and what you can see here is that prices are up about 21% and then the line just below that is I've taken average hourly earnings from the monthly employment report and I've multiplied that times weekly hours worked so so we've got a measure of weekly take-home pay from from workers and what we've seen here is the cumulative change
• 71:30 - 72:00 in hourly wages and actually that's somewhat of a typo because it's really the cumulative change in weekly take-home pay that Gap is an erosion of the standard of living this is what workers and and consumers are upset about is they they can feel it they know it and this is this is where you can see the data so the overall price price level has been rising faster than your take-home pay and so
• 72:00 - 72:30 this is what this is what causes people to feel a little bit uneasy I realize that the year-over-year change the bottom line is is the change in CPI it's the rate of inflation that everybody gets quoted but the reason that there's some sort of Disconnect between economists saying relax inflation is only 3% and and what people are feeling is shown in this graphic here which is I've had an erosion in my standard of living and we need to close that
• 72:30 - 73:00 Gap there's been some talk about actually lowering prices a lot of you will remember from your econ 101 class that deflation an actual lowering of prices represents demand destruction and that's bad so what we're more likely to see is Wages will have to start catching up to overall price levels we talked about tariffs a little bit um tariffs it just depends on what day
• 73:00 - 73:30 it is as to you know what's going on with the tariffs that's that's been the biggest problem is you you don't really know what's going to stick and what's not going to stick let me see if I can quote some of this from memory the UN the United States economy is about 29 trillion dollar a year okay we import roughly four trillion worth of stuff $29 trillion economy we import about $4 trillion
• 73:30 - 74:00 worth of stuff every year about 600 billion got to be careful when you're quoting these millions and billions and trillions 600 billion comes from China so I do the math 4 trillion of stuff that we're importing from across the world 600 billion of it comes from China we raised the Tariff on China 10% so we're talking about $60
• 74:00 - 74:30 billion on a $4 trillion import line item on a $29 trillion economy it's damaging to say the least but it's not catastrophic and what we're showing here is if you think the US economy is growing at about 2 and a half% a year currently imposed tariffs may take a tenth or two tenths off of the growth
• 74:30 - 75:00 rate of the US economy I I'm not dismissing the significance of raising prices on us consumers I'm not dismissing the significance of raising prices for manufacturers who rely on Chinese Imports or r on imports from other countries but it's not enough to Sidetrack the US economy when you look at other countries and this is interesting too when you look at
• 75:00 - 75:30 say Canada well 70% of their economy is dependent on foreign trade only about 10% of the US economy is dependent on foreign trade but 70% of Canadian economy is dependent on foreign trade when you look at the EU it's even higher than that it's like 80 to 90% of their economy is dependent on foreign trade and I think getting political about it but I think what the president is trying to do is to say well this is
• 75:30 - 76:00 going to hurt you more than it hurts me and and so that the right this tariff business is is aimed at getting those countries to Blink first we talked last night at a gathering about the fact that you know there's a very narrow road that leads to success with this tariff business and there's a lot of negative probabilities out there so that's why it's got everybody freaked out because again it's it's not that we won't be
• 76:00 - 76:30 successful it's just that there are a lot of opportunities for for missteps here and so hopefully this all works out all right I've said this for years technology is not a job killer it's a job reallocator there's a great article in the journal the other day about the fact that uh um call centers typically the economics for a call center is they cost
• 76:30 - 77:00 about a dollar a minute per caller so if you run a call center every time somebody calls you it's a dollar a minute to have a live person answer the phone Salesforce now sells a service called agent force this isn't a commercial for them it just happens to be what they're selling um that can cut the number of call center workers in half because it can do a lot of work using voice recognition technology press one press two press three that that sort
• 77:00 - 77:30 of thing it can do a lot of the leg work of looking up your account right you ever call with credit card Airline whatever they go hold on a minute I have to look up your account well all right so AI can do a lot of that leg work that reduces the number of operators but at the same time Salesforce is hiring 2,000 new salespersons to sell agent force every time whether it's telephone
• 77:30 - 78:00 operators bank tellers travel agents what have you every time those jobs have been eliminated or replaced by new technology those those folks as a whole are getting better jobs with more pay due to AI so it's reallocating jobs last point I'll make on this is McKenzie did a study that's projecting 8 to 9% of Labor demand in just 5 years will
• 78:00 - 78:30 be in types of jobs that don't exist today so think about that up to 10% let's be generous up to 10% of new jobs in the next five years will be jobs that don't even have a job title today so so I I think that's kind of fascinating kind of getting to the end here wrapping up but I you
• 78:30 - 79:00 know I wrote this slide about a week ago and it's already you know somewhat out of date Trump will likely tighten legal immigration um let's think about this again rough tough the economy generates two million new jobs a year we need at a minimum about a million and half immigrants to fill those jobs because we're only producing about 500,000 new
• 79:00 - 79:30 workers into the labor force each year so again not getting political but whatever gang members we want to deport you know we're all about it but but the problem is if we start to get a little overzealous here immigrants are currently providing the backbone as it were of the US Workforce in terms of new jobs allowing the economy to grow we're relying on AI
• 79:30 - 80:00 to supplant some of that but but th those two have to meet at an appropriate point and and we're not there yet on AI we're getting closer but those two have to meet so there's an opportunity for a shortterm misstep here as it relates to immigration same thing for tariffs right there's an opportunity here to misstep on on the Tariff Wars and and leads to to negative
• 80:00 - 80:30 outcomes um I know we're going to get a question about deficits and debt again rough tough the United States raises through taxes tariffs and other other means about 4 trillion a year we're spending 6 trillion a year we're running a $2 trillion a year deficit now the the
• 80:30 - 81:00 rat through the snake is the baby boom generation the 10,000 people a day that are turning 65 every day that are saying okay I've been paying into social security for the last 45 years I want mine right they're signing up for Medicare and they want to get paid and and so I I don't think that there's a lot that federal government can really do about that except pay pay those people off so we we've got Elon Musk trying to find other ways to save money
• 81:00 - 81:30 and that's all well and good except 10,000 people a day are going I want my I want my check from the federal government and and that's going to continue on for uh another couple of decades considering I'm one of those people maybe two and a half decades that'd be nice uh but but in the meantime you know that that's that's somewhat problematic um drill baby drill is a nice sentiment
• 81:30 - 82:00 but he's not the one spending the money it's the oil companies that are going to have to raise the capital and decide whether they want to commit to these new projects and and explore and and do the things that they want to do so again the environmental setup uh you know for this I don't mean environmental I shouldn't use that word but the the the setup the regulatory environment for this is good it's just going to take some time uh because it's not like the oil companies can just turn a dial and increase
• 82:00 - 82:30 production um I think over the next several years again banking regulations should ease up the FED is trying to lower rates and become much more accommodative with their monetary policy the federal government is looking to lower taxes right the federal government is again easing up on on regulations small to
• 82:30 - 83:00 midsize companies generate 80% of all new jobs in this country so is the environment for small to Mid midsize businesses conducive to growth I think it is um lower energy prices again as this unfolds over a number of years is that good for generating higher levels of growth sure it is we get more labor force participation we get uh better manufacturing uh and and maybe these
• 83:00 - 83:30 tariffs lead to more onshoring uh it it maybe it positions us produced Goods in a more favorable light because of the inherent cost structures of trying to produce something and sell it cheaply in what I call our first world country right we we have standards of living here and and and we're not going to employ workers at at the same rate that they can they can make in other countries so you know it's only going to improve that a little
• 83:30 - 84:00 bit I'm in the higher for longer Camp s here I'm in the higher for longer Camp I think bond yields stay higher for longer because the government is going to continue to run a deficit maybe not as much of one but they're going to continue to run a deficit uh bond yields I think are going to have to rise somewhat um I think we'll see again higher growth in defense spending I think we'll see a reduction in illegal immigration which
• 84:00 - 84:30 hopefully stabilizes everything and I think we get uh some reduction in inflationary pressures as the government reallocates some resources from the chips Act and the inflation reduction act big themes uh going forward this is my last slide big themes going forward healthc care again 10,000 Americans turning 65 every day uh and think about the potential here we can't have 10,000
• 84:30 - 85:00 people I'm not saying when you turn 65 you go into a a home but what I'm saying is 10 years from now well thankfully right 10 years from now 10,000 people a day rough tough are going to turn 75 right 20 years from now 10,000 people a day are turning 85 I mean think think about the math that way we can't have all those people moving into assisted living facilities we don't have the staff for that we're already talking about the fact that we we don't have enough workers to fill the available jobs right there are 1.2 job openings for every for every unemployed worker in
• 85:00 - 85:30 the United States we simply can't fill those jobs so what are we going to do well we're going to employ technology wearable technology virtual doctor visits nurse visits right in your home allowing you to stay at home so the the name of the game here with Healthcare is keep Mom and Dad home longer artificial intelligence and Robotics we've talked you know we've talked a lot about that you know but but here's
• 85:30 - 86:00 Here's the the big big picture the last thought I'll leave you with on that if your population is not growing the only way to continue to grow your economy is you have to replace that with technology you have to fill that Gap with technology and so this is either going to work or it's not going to work but it seems to be working working so far but we're we're not really there yet we haven't seen all of the really cool stuff that's going to happen yet um and
• 86:00 - 86:30 and then I I think you can't have more information right right now everybody carries around a cell phone you you everybody can find out everything all the time and I don't think you can have that sort of technology and have isolationism right I I think I I think you see more and more interconnectedness across the world as information becomes
• 86:30 - 87:00 more and more a available uh but I also think uh we're going to see somewhat of a manufacturing Renaissance in the United States I think there's a lot of and particularly you know as as the earlier speaker was talking about North Dakota is a great place to start businesses Indiana is a great place to start businesses there are a lot of midwest states that have a very very very favorable economic environment a great Labor Force full of good people
• 87:00 - 87:30 lots of land lots of resources lots of power generation capabilities and I think that the Midwest is going to benefit from that uh o over the next decade or so let me stop there um and ask uh Shannon to come back up on stage I think we're going to do some Q&A all right yeah there you go there you go all right I'll sit on this side this
• 87:30 - 88:00 time oh there you go change it up a little bit so all right well um first of all hugely insightful thank you Matt uh for that now excited to have a little bit of um again interaction with all of you and your questions so please um start to send those in I'm starting to see some of them already uh those QR codes on your tables or chamber questions.com uh so let's start um there's so many places but let's start first with um I thought this was fascinating last night we had a a a VIP
• 88:00 - 88:30 Summit with our sponsors and um congresswoman Julie fedorek newly elected congresswoman uh joined us uh she talked about uh her priorities as as uh she now is really looking at energy regulation uh and uh made this comment about the national debt so in the national debt uh is now 36 trillion about 36 trillion uh and and to put that in perspective I thought this was an
• 88:30 - 89:00 amazing analogy that she shared she shared that uh if you were to spend $20 a second it would take you 19 months to SP to spend a billion dollars if you if you spend $20 a second it would take you $1,576 years to spend a trillion dollars and we are $ 36 trillion in debt so as you think about um as you talk about the economy and um the decisions
• 89:00 - 89:30 that are being made now what are what are your thoughts around how those decisions are being impacted by that looming debt that we have and and how are we ever going to get progress in that yeah well this is the thing I I I don't want to I don't want to bring the room down but growing the national debt is an inevitability for about the next 20 years because uh we have used Social Security
• 89:30 - 90:00 money to fund other areas of government and so now that the bill is coming due the Baby Boomers are retiring we're going to have to fund that through debt most mainstream forecasters are suggesting that our debt could top out at around 50 trillion that sounds like a lot of money it is uh we produce $29 trillion do a year in in
• 90:00 - 90:30 our economy but um debt is going to continue to increase and I think that it's it's great that your tax dollars will be spent more efficiently anything we can do to increase efficiency is is a good thing um as as Elon Musk Musk has said uh is he going to bat a thousand no does he expect to
• 90:30 - 91:00 be called out when he says something off sure but if they can find more ways to increase government efficiency that's just all the better but I I I I don't want to be a Gloom and Doomer about it because the go you know the United States is a Sovereign Nation we can pay off our debt but in the meantime it's going to grow and that growth in the federal debt makes it very difficult to lower interest rates and it makes it
• 91:00 - 91:30 very difficult to lower borrowing costs and and so that is a that is a bit of a headwind it's a bit of a headwind for the US economy so as we as we think about and you've talked a lot um uh about the tariffs this is probably the number one thing that I am hearing as a as a chamber leader here is the significance of our proximity to Canada uh and and it's and it's amazing right we're hearing most of the Tariff conversation is really um at least in
• 91:30 - 92:00 the midwest in our area uh is focused on Canada much less on Mexico and China and I think it's probably just because that's where we get so many of our Goods uh and that that interaction uh uh with Canada but I I found it fascinating um how you were talking about the dependency on this or the or maybe the hype around it obviously right is it overhyped and what do you say to those midsize small companies or the larger manufacturers that are dependent upon the steel the aluminum the um as far as
• 92:00 - 92:30 what this this tariff piece how do you not have Panic uh ensued in in right you know the general business yeah I mean if you're a home builder and you're looking at the you know the cost of of lumber uh you know increasing it's it's it's very difficult and and so it is there's a lot of there's a lot of I I wouldn't call it maybe full full-blown panic but there's a lot of concern over you know the potential for these terrorists to be
• 92:30 - 93:00 fully implemented uh to to raise costs and and the like and I think that it's it is a little bit unnerving I think businesses just need to remain focused on again their long-term plans and realize that that a lot of this won't actually come into fruition and that and that I believe the president is using tariffs particularly with Canada and Mexico right because it's like all of a sudden and hopeful you know but they're like what the heck
• 93:00 - 93:30 I mean we you know we we didn't do we didn't do anything and and and now we're getting these these uh these tariffs and but to the president's point it's like well that's just the whole point you didn't do anything so he's looking for them to increase border security stop the flow of illegal drugs stop the flow of illegal people that you know that that sort of thing and he's using the threat of economic damage in order to get them to do something internally so I don't believe the president and the
• 93:30 - 94:00 president's advisors are like hey let's tank the US economy by raising the cost of goods for everybody I I don't think that's what they're hoping for is that the other countries blink first good point and I think it's it's on a um that multipronged approach or multifaceted approach is really thinking um that there are there are there are many more aspects to this than simply the Tariff component of it so um as we uh you you just mentioned it being a a home builder
• 94:00 - 94:30 so I I would love to ask your thought and question on two other big issues we're hearing that ultimately affect Workforce the ability for more people to be in the workforce are housing and child care those are a couple things that maybe weren't mentioned here can you speak to either one of those as um parts of a critical part of the economy or a hindrance of of the economy so last month we built on an annualized basis uh
• 94:30 - 95:00 1.3 million new homes so in other words the housing start data for January came out and if we build the same number of houses in January right the annualized rate is about 1.3 million housing units the population of the United States is rough tough 345 million people generally speaking we add 3 million people a year year to the to the US population and we're building a million3 new houses we've been doing
• 95:00 - 95:30 that for 20 years yeah we got a housing problem we've got this is this is this is what has created the fact that housing affordability is at an all-time low because interest rates have gone up we have we have a shortage in the supply of of houses being built in the United States that doesn't keep up with the population and so it's forcing people into multif family and there's a phenomenon called uh lockin which means
• 95:30 - 96:00 if I'm currently living in a home for which I've refinanced my mortgage at 3 and a qu% and the current prevailing mortgage rate is seven something I'm sort of locked in because in order to sell my home and find something else I'd have to eat that higher mortgage rate and people don't want to do that and so the result is it's kept mom and dad in a home that's too big because their kids are all gone now it's kept young families in a home that's too small
• 96:00 - 96:30 because they're starting to outgrow it as they have children and and and begin to expand and it it's led to a real conundrum here with housing I don't know I don't know how we get out of it to be honest it's it's going to take homebuilders building smaller homes it's it's yeah it's it's there's a lot to unpack there with the housing market and we're seeing a lot of um States uh midwest states I know for sure both North Dakota and Minnesota looking at
• 96:30 - 97:00 are there some types of programs that the states can put forward right that allows for some match dollars to really incentivize development and further homeb building um is that something that we should be looking at at a federal level or is this really well it's so different from I think it's better handled on the local level state level everything's better handled on the local level right I mean other than the Army I'll give him that everything's better at the local
• 97:00 - 97:30 level although we would like some regulations to stay consistent from state to state but we can we can get into that some great questions you you uh I thought I was just going to say that the housing piece is kind of this tsunami of everything together and interestingly enough we have a question that said considering the silver tsunami we are seeing in the workforce what are you seeing in the business transition environment are business owners selling to private Equity at higher rates or considering alternative transition structures such as sales to employees
• 97:30 - 98:00 specifically through Employee Stock ownership plans yeah it depends on what kind of business you're in I mean we've seen a lot of interest in in private Equity we've we've seen it there's there's been a huge increase um just this is related give me a minute the Wilshire 5000 stock index only has about 3,500 companies in it where the other 15 00 go the problem is nobody's going public anymore they're being sold to private Equity firms and the like so
• 98:00 - 98:30 even the Wilshire 5000 can't keep up right the Russell 1000 still has a thousand companies in it but the makeup is changing all the time because not enough companies are going private or going public I should say and they're going private so uh yeah we're seeing a rise in the alt Market specifically because investors can't get the diversification that they need in the public Equity market and so we're seeing a a dramatic increase in interest in the
• 98:30 - 99:00 altz market as a result of that interesting uh another question from the audience please keep sending them in this is great do you think entitlement reform is inevitable do you think it is required effective effectively manage our country's debt problem uh I think some entitlement reform is inevitable I think that the reality of of um what the president wants to do about
• 99:00 - 99:30 um um lowering taxes right it means that we're going to have to do something about what is the role of the Federal Government in your life right as opposed to again state and local authorities churches Charities you know that sort of thing and I think we've got away from people being taken care of in the community where they live and and being taken care of by the federal government
• 99:30 - 100:00 and and that's I think I think that's that's a goal here anyway is to reform yeah and and on that federal government piece I think we get asked a lot about what's the federal government and what's the state government's role in the whole Workforce side of it so let's switch a little bit to to more Workforce by far the the piece that we hear the most is the concern about Workforce um I think you you said it well and I'll I'll just add that we need more babies more immigration we need you to work longer and we need Automation and AI right I
• 100:00 - 100:30 mean that's really kind of what I what I'm thinking about right uh so the more babies piece of it we also know is a much longer term uh it's going to take a a little while for them to to get into the the mix of things um but let's talk a little bit about which of those is most important or what what are you seeing as the priority piece around immigration keeping people and working longer Automation and AI how do we balance all of that I think the goal here is a again I I'll use the the term
• 100:30 - 101:00 first world country right an advanced economy and this happens across all all advanced economies is as you rise in affluence uh those economies tend to have fewer children uh women uh God bless women they make up 60% of college students that's a wonderful wonderful development the problem is they're now
• 101:00 - 101:30 much older when they graduate college they're having difficulty finding a a a suitable mate because most most of us that are married uh try to marry up right we we think we're we're marrying somebody that's right exactly right I I I out I outran my coverage a long you know a long time ago uh but uh women because they're much more
• 101:30 - 102:00 educated compared to you know historically you could just say we're smarter that's fine you could sure uh but but are having difficulty finding that person that that that that allows them to marry up and and so they're getting married later and because they're getting married later they're starting a family later and because they're starting a family later they don't have that many years where they desire to have children
• 102:00 - 102:30 and so this problem that we have is is in you know ingrained in society the United States in Canada years ago I mean our ability to think stuff up far exceeds our ability to do anything about it right we we can't make everything we want e even if we had to make it all in the United States we there's not enough labor to make everything that we consume
• 102:30 - 103:00 that's the advantage of being a a a highly developed economy and so I think that problem is is endemic in in the economy AI is supposed to make that easier right I I I'm embracing this change in technology uh you know I love my job those guys are sitting out there I love my job I don't want to be doing it when I'm 75 right so in other words I'm embracing technology that enables us to
• 103:00 - 103:30 live better lives at a at an easier Pace there are millions and billions of people around the globe who would gladly do the work that my dad used to do that my mother used to do uh that none of us want to do anymore yeah and that that's uh the I think that's the biggest piece around immigration for us uh we hear from a lot of you know you when we saw the slide foreign board workers highend construction clearly
• 103:30 - 104:00 here in agriculture uh what are some of the um short-term we look at immigration from a short-term lens and a long-term lens what are some of the short-term things that need to happen in Immigration um we we know we've been in gridlock forever with two parties one on DACA One On the Border uh and so what could we do shortterm and then what are more long-term strategies as you look at immigration reform in the short term we need
• 104:00 - 104:30 to again I'm not trying to sound like I'm a politician in the short term we need to secure the border and gain immigration needs to be handled on our terms not on somebody else's terms so we need to we need to secure that clearly we need to make it easier to come in through the front door apply for a social security card get a job start paying into social security
• 104:30 - 105:00 for me uh but you know so we need to we need to you know we need to make it easier for people to immigrate to the United States legally under a controlled environment I mean I think that's the short-term solution here is to is to to get a handle on on all the chaos um and again longer term will see because to the extent that the United States is spending a lot more money on artificial
• 105:00 - 105:30 intelligence and and the like than other countries are Perhaps Perhaps we'll still need many immigrants and and we Embrace that but perhaps we don't need as many as we thought because right now we're relying on them to to do a lot of the manual work that makes a lot of sense I think that we've we hear a combination of that also you know as you as you think about current Visa programs how can we um we've got arbitrary caps set on some of
• 105:30 - 106:00 them we've got Antiquated language associated with them so Visa reform could also be part of that but you touched a little bit on um some of those I would call populations of immigrants that are easier to bring through legal immigration this ties into the next question I have for you about we have a lot of Education higher education Professionals in the room partners of ours uh partners of Industry um when I think about immigration so a couple questions one I think about how do we
• 106:00 - 106:30 how do we provide more citizenship for students that are coming through our College systems that are able to then that want to stay here um but what does education how does higher education really play into the economy uh around Workforce demand and what we're doing with education what needs to happen in education to really match and meet the needs of business and industry well that's what needs to happen education needs to match the needs of what's being demanded out there and and and we you
• 106:30 - 107:00 know higher higher education institutions are are finding that out um um I have four children they've all been to college um uh one of them is a nurse so very practical degree one of them majored in international studies and and so we're not quite sure yet what what that brings to the table uh but but you know no so the but the
• 107:00 - 107:30 issue is really for higher education is to match the needs of the workforce and and I think that to some extent um you know the idea that you know all these kids need to go to college and get a four-year degree it's like well if you talk to the trades you know they're struggling right they're they're they need electricians they need plumbers they need Carpenters they need Brick Layers they need you know the the trades need people and and I think uh we're not doing a good enough job
• 107:30 - 108:00 guiding young people into the trades uh until they realize that they can make more money than some of their college educated friends who have a degree in international studies and so you know and maybe no debt yeah and and no debt so so yeah I think that's but I do I do agree there's that balanced approach we need fouryear we need twoyear we need direct entry uh that that is a piece and so much of that starts with the parents right the perception of the parents and how are
• 108:00 - 108:30 you guiding uh your children into these different careers we're also finding that um that exploration is starting earlier and earlier right we've got elementary kids looking at what they want to what they want to do uh here's a here's a a a shift uh from the audience how do you see the current and predicted economic climate impacting philanthropic and charitable giving well it it Americans are are a generous people
• 108:30 - 109:00 uh but tax reform clearly drives a lot of that right we we have a thing in in in wealth management where we're encouraging some of our more affluent clients to make qualified charitable contributions qcds out of their Ira so it's like don't take the the money out of your IRA pay taxes on it you know your your required minimum distribution and then turn around and give money to your church you know I told a client the
• 109:00 - 109:30 other day stop writing checks to the church just figure out how much you want to give them will take your annual distribution out of your IRA and we'll just send that directly to the church and then you don't have to pay any income taxes on that so to the extent that um tax reform will drive some of that but again I I I mean I I TR and I mean this most sincerely Americans are very generous
• 109:30 - 110:00 people and want to take care of their Community uh so I don't see that charitable gifting or philanthropy will will dry up if you don't have a tax uh incentive to do it but it just takes a little you know it might take some shifting in attitudes great so I know we're running short on time believe me I'm I get the red timer on here that says Please wrap up please wrap up but um and this is where they hate when I say but um but I have a couple lightning questions sure one or two answer really
• 110:00 - 110:30 quick rapid fire okay ready all right one word to describe the economic Outlook optimistic one economic indicator you're watching right now um I'm watching weekly unemployment claims because I want to know very quickly when the employment situation starts to soften if if it does you're so funny because you say you're not a politician but you can't do a one or two word answer right okay so all right uh recession I'm Economist that's even
• 110:30 - 111:00 worse recession or sustainable growth growth perfect biggest strength of the Midwest economy people industry with the most growth potential in the next five years oh AI uh most definitely and and health care for sure biggest villain in the economy interest rates inflation or something else um inflation always most overused economic buzzword of 2025
• 111:00 - 111:30 Doge and one surprising economic Trend in the next five years um I I think I you know again not in a bad way but I think we're all going to be shocked when the FED pivots and has to raise rates uh in in about five years so well we could have had a lot longer conversation so uh Matt thank you so much for being being here for bringing your expertise please help me thank Matt Finn thank you very
• 111:30 - 112:00 much all right uh to our online viewers you get a 10-minute break to all of you here 10 minutes and we'll reconvene back here in a very short amount of time [Music]
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• 122:30 - 123:00 [Music] ladies and Gentlemen please find your seats the second half of the Midwest
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• 123:30 - 124:00 this is your region these are your resources this is your reliable affordable cleaner than ever electricity we're all in on all of the above [Music]
• 124:00 - 124:30 energy ladies and Gentlemen please welcome to the stage president and CEO of C County Electric Cooperative Paul [Music] matthys have loud CL well quickly before I get started I'm going to do my favorite thing to do when I speak to people and that's to go off script and I know pton is just cringing right now but one of the comments that was made to Matt and Shannon uh about
• 124:30 - 125:00 the silver tsunami that's taking over I just want you to know I resemble that remark okay back on track good morning everyone it's an honor to be here with you today and I'm excited to share in this conversation about the future of our Region's economy my name is Paul matys and I have the privilege of serving as president and CEO of C County Electric Cooperative we are proud to co-sponsor the Midwest economic Outlook Summit this year alongside Bremer Bank C County Electric is a member-owned
• 125:00 - 125:30 Cooperative meaning we're governed by the members we serve our mission is to provide reliable power and reinvest into the community ensuring that prosperity of our members and of the region we serve 10 counties in the southeast part of North Dakota including much of Fargo and West Fargo as a not for-profit organization our board of directors allocates ex excess revenues called margins back to our members this year we're pleased to return 2.75 million back to our members in recent years High inflation
• 125:30 - 126:00 and interest rates have brought stress to many but C County Electric has been able to keep electric rates low and stable and maintain record reliability even through events like the unprecedented 20123 Christmas ice storm this success can be attributed to running our operations efficiently and embracing technology we are fortunate to be in an area where economic growth and prosperity continue to thrive over the
• 126:00 - 126:30 past 23 years we've added an average of 1,600 new accounts annually directly reflecting our community's growth I want to take a moment to express my gratitude to the Fargo Morehead West Fargo Chamber of Commerce and the greater Fargo Morhead EDC for their dedication to fostering new businesses in ensuring the growth of existing ones through the innovate 28 initiative the chamber has a fantastic program lined up for us today and thank you again for being here and continued
• 126:30 - 127:00 supporting of our community with that let's dive into the final power pack SE segment of today's program up next we have an expert panel that will explain Strategic investment Trends across banking housing and private Equity giving you information to navigate today's evolving Financial landscape scan the QR codes on your table or go to chamber questions.com to submit questions to our panelist leading today's conversation is Katherine
• 127:00 - 127:30 Berkland Ronald K and olssen Dean of the North Dakota State University College of Business let's welcome Katherine and the panel to the stage thank you good morning it's nice to see all of
• 127:30 - 128:00 your smiling faces this morning um I am glad to be here thank you for asking me H thank you to the chamber for asking me to moderate the panel of experts that we have here with us today um for those of you I haven't met as he said I'm kathern Berkland I'm the Ronald and Kay olssen Dean at the NDSU College of Business and I've been in town for about 18 months now so I thank you for the warm welcome that my family and I have received I appreciate uh the community and and the
• 128:00 - 128:30 way that we've been able to integrate so thank you for that um my background is that I am a macroeconomist by training so today is my bread and butter uh it's fantastic I also appreciate that Matt was the one to give the predictions so that if things don't turn out the way he predicted you can go back to him and I don't have to make any predictions so I appreciate that as well um we are going to talk a little bit about Investments today and and how the growth that Matt
• 128:30 - 129:00 referenced uh and the growth that Rich talked about uh can be facilitated um with some of those Investments and how that works and what that future might look like so with me today uh I have a fantastic panel um we've got Julie Whitney senior vice president at Bremer Bank she is representing our discussion about banking Finance U Michael Neil a senior fellow at Urban Institute is talking about our housing and real estate Investments and Cody first uh director at 50 South Capital who's talking about private equity and Venture
• 129:00 - 129:30 Capital so um we'll go ahead and get started my first question is a softball please introduce yourself and your organization and tell us a little bit about the investment Focus that you have um and what you're sharing today that connects to our economic growth Outlook good morning everybody Julie Whitney with Bremer Bank um I cover U my and my and I cover our commercial segments in our three state footprint um and um and I office here in Fargo and I'm thrilled to be here today um so the um the
• 129:30 - 130:00 investment area that I'm representing today is business investment from a banker's perspective and um and and I think you asked you know how that's important how does that contribute to the community and in the simplest of terms um we take savings we transform them into loans um th those loans provide liquidity into um for businesses so that they can run their operations smoothly they can pay their employees and most importantly for today um they
• 130:00 - 130:30 can invest in new opportunities so we um extend commonly extend loans for um equipment purchases plant expansions um growth we we we'll help fund um working capital for growing businesses um Acquisitions um and um those types of things so that's contribute thank you my Michael yeah good morning everyone uh my name is Michael Neil again it is great to be here with you although I'm freezing so there's that I'm from
• 130:30 - 131:00 Washington DC um below the Mason Dixon line um where it's a little bit warmer but not by much um and I'm a fellow at the urban Institute uh I do uh a lot of research related to the economy related to the housing market um thinking about the housing market more generally um but also thinking about winners and losers um you know who benefits and who often uh is not able to uh get into and sustain home ownership um the urban
• 131:00 - 131:30 Institute uh is a think tank that was created uh during the presidency of Lyndon Johnson um really uh focused on providing uh data and evidence um toward uh uh uh toward influencing and informing um the policy debate um and uh I think at the same time uh really focused on uh issues related to uh domestic uh challenges uh faced around the country uh my background I started off uh uh first at the home builders at
• 131:30 - 132:00 the National Association of home builders thinking a lot about supply issues there before moving to Fanny May and thinking about demand side kind of challenges related to mortgages um I personally love housing I'm uh one of those people who started off in the macro Finance space and moved over to housing um and I find number one that it's a very very intuitive in part because housing is so critical to all of our personal lives um we all have stories around uh uh the experiences the excitement that we had in homes things
• 132:00 - 132:30 that we've celebrated um but also things that we might have cried over and all of that happens in home and so it gives it a very more a much more intuitive um approach to kind of thinking about the world relative to other topics in my own opinion um but at the same time housing is critical for the economy right I mean you know we tend to think you know that uh first uh uh uh housing uh is uh housing uh uh produces jobs businesses higher um at the same time when people
• 132:30 - 133:00 buy homes they often or when they're selling a home they often make improvements to their home and so that also boosts uh uh economic growth um but we also know that uh housing is a leading indicator of the economy that is if you want to kind of know what's going to happen in the to the economy overall 6 months maybe 12 months into the future look at housing um but at the same time that also means that housing leads us
• 133:00 - 133:30 out of economic conundrums that is a lack of economic activity what is it that gets people moving again how does the economy grow why does it not continue to decline in part is the animal spirits uh asso and the risk-taking that's associated with Builders who take those uh low interest rates in turn seek to build homes um and in turn then wind up jump stting the economy um the last thing I'll say is that is important for municipalities as well that is that uh the local tax
• 133:30 - 134:00 revenues uh uh tend to increase consistent with more housing uh activity so for all of these reasons housing is just so critical for the economy good morning everyone um first thanks to the chamber for pulling us all together and thanks to NDSU for moderating this panel I'm a proud NS you grats this feels like a very full circle moment to be sharing the the stage with the dean um uh my name is Cody first and I work with 50 South Capital we're an
• 134:00 - 134:30 Institutional private Equity Firm that um has deep roots in the midwest we're a wholly owned subsidiary of Northern Trust um northern is is older than the state of North Dakota and has long been um bullish on the Midwest but our team at 50 South is like I said institutional private equity which primarily means that we invest in funds and so we are a fund of fund um we invest across the capital stack so we invest in Venture predominantly on the early stage we invest in buyout opportunities we've got
• 134:30 - 135:00 um a very active private credit team right now as the Market's really interested in that as a product um and a very busy secondaries team as LPS are looking for liquidity and and looking to kind of sell things earlier than than some funds are holding um we also do direct co-investment strategies um and outside of our core funds we have a pretty active separately managed account business where um a fund of one hires us to really do two things one to make
• 135:00 - 135:30 money and two to change the numerator of something that client cares about um so in the case of North Dakota we were able to launch a fund and serve as a general partner of the North Dakota growth fund which was the instate investment strategy that was launched in 2021 um if you follow the legislative process it was House Bill 1425 um that really looked at the Legacy fund and said what would it look like if we took some of North Dakota's money and actually bet on North Dakota and that
• 135:30 - 136:00 legislation changed the asset allocation um and activated the instate strategy which again 50 South was hired to serve um as a general partner um I'm a a ranch kid from Southwestern North Dakota and and still can't believe I get paid to bed on North Dakota every single day but um I think you know the coure things have always been true here which is people are solving real problems we haven't had the opportunity to do stupid things because there's been Capital restraint so there's really good
• 136:00 - 136:30 businesses here um and communities like Fargo have done a tremendous amount of work to build an ecosystem that supports people taking risks and so um it's been a real privilege to do the work since 2021 in North Dakota but more broadly 50 South Al also manages instate programs for the state of Indiana and the state of Illinois and so the last 10 years we've invested over a billion into funds across Venture and private equity and um have a really you know wide view on the market that's going on kind of in our
• 136:30 - 137:00 backyard thank you thank you all three of you uh I have a whole list of questions because I would not be a professor if I did not come prepared with all the questions that I ever wanted to ask them uh but if you would like to ask a question don't forget that at your table there's a QR code that you can send your questions in or go to chamber questions.com um be able to send your question in they will appear on this monitor here that's in front of me so I can add them to my list that's the professor look that says
• 137:00 - 137:30 you're supposed to ask questions don't forget so if you have questions for our panelists make sure you send them in uh Julie gets my first question um so we think about uh expansion so we heard from Matt we heard from Rich that there are opportunities for expansion uh in the state of North Dakota in the state of Minnesota there are opportunities and and really looking toward whether it's Tech things whether it's people oriented things um there are opportunities to expand our business so if we want to expand often businesses are are going to come to a business Banker if they want
• 137:30 - 138:00 to expand if they want to buy another company if they want to acquire a merge or whatnot um when we think about coming to A A A Traditional Bank to get financing um the ability to get financing has changed a lot uh over even just the time that you know that even the time that I've lived in North Dakota has changed uh so can you explain what's been happening in bank finance fining availability lately uh and what it it's like now yep absolutely thank you so economic Cycles always have a big
• 138:00 - 138:30 impact on how Banks um banks are able to fund loans so but most recently the biggest issues are inflation and interest and I think everybody in this room probably knows that um in 2022 the Federal Reserve started um ramping up pretty quickly its federal funds rate and that ultim Ely for a number of reasons led to uh some liquidity constraints and kind of um on the most extreme end of that in 2023 we saw a handful of um kind of high-profile
• 138:30 - 139:00 bank failures um the the banking industry is is strong um but the that limited liquidity in the in the market and The Limited Capital LED Banks to pull back on lending and so some of the things some of the ways that impacted businesses is it was um it was a little more chenging to get credit um Banks were allocating their credit to their their what they consider their good relationship customers to those with the strongest credit um spreads on on um
• 139:00 - 139:30 bank loans went up to um to account for the you know the supply demand mismatch on liquidity so those um so that's you know most recently that's that's been the um the impact to businesses as it relates to bank financing um the Federal Reserve has started cutting they started cutting rates in September came down 1% in total to Matt's point
• 139:30 - 140:00 they paused um anybody's a guess on how long that's going to last um the the um Outlook seems relative I mean I think in this in in our community we're we're we really are resilient we're innovators and so we can get through all different kinds of all different kinds of Cycles but um we are seeing and bank bank balance sheets are strong liquidity is is improving Banks
• 140:00 - 140:30 learned learned some valuable lessons in in 2023 um they put the put some work to um remedying those issues and um and we're seeing competition ramp up in some cases the the the 1% reduction in the FED funds rate resulted in lower short-term rates long-term rates have been more stubborn and more volatile um and and maybe um more subject to fluctuation from some of the uncertainties in the market um but I
• 140:30 - 141:00 think in general the Outlook is well um I think you know I think in general the Outlook is positive you heard Matt no no recession no no uh soft Landing we're we're just going to keep humming along and definitely I I think in in the midwest we we see um a lot of positivity going forward it's like you knew that was my next question which was what I was going to ask what did we think was your outlook moving forward and whether we thought that that would change the ability to get financing and whatnot um so I will augment that question uh so we
• 141:00 - 141:30 know that there's a bit of uncertainty happening in the macroeconomy um give me your understanding of how much Banks like uncertainty Banks do not like uncertainty business business decision makers don't like uncertainty either I mean nothing will stop stop in your tracks quicker than not knowing what your next move should be so um so yeah uncertainty is certainly tricky um there's a lot of talk out there there's a lot of there's certainly a lot of real
• 141:30 - 142:00 challenges um but I would just encourage try to parse the challenges from um from the noise there's a lot of noise um I think again and in this this community is so resilient um what we see when when time when times get tough we see our community really um really rise up and um for those who are you know ready and willing to be flexible um
• 142:00 - 142:30 those who are ready and willing and prepared to to take advantage of the challenging times and um and turn those into their own their own Market you know Market um um competitive improvements those are the ones that emerge strongest so that's yeah I think generally yeah and I think that Echoes what Matt said as well that there's a lot of noise uh but maybe the impacts are not going to be as big as we thought they would necessarily be so when we think about uh
• 142:30 - 143:00 impacts on business and we think about the ability to grow your business here in the state of North Dakota we know that getting Workforce is an issue and get finding them a place to live is an issue so I'm going to turn my next question to Michael because this is when we think about firms really at the basic sense for an economist firms need capital and they need workers those are the things that they use and they put those together with technology and they make output and so we think about how do we get Workforce where do we have a place for them to live so I'm going to turn my question to Michael real estate
• 143:00 - 143:30 and housing are important they we know they bring in workers how is the real estate market in the midwest doing compared with the rest of the other areas of the country yeah that's that's a great question um you know I I I'll answer it in two ways I think um compared to you know how how how the market has evolved over time I think is one way of kind of looking at it and thinking about it um but then kind of comparing it to the rest of the country I think is is another way um if you
• 143:30 - 144:00 don't mind I'm going to start with the be with the first one and then move to the second one um and you know say a couple of things I mean uh it's you know it's it's certainly a challenge I mean uh uh a lot of you know a lot of what you said about uh interest rates and debt really matter in part because housing is a debt Finance industry um both on the supply side um but also on on the demand side um now you know uh what's interesting there is uh in part
• 144:00 - 144:30 uh the the challenges of financing on the supply side at least according to the home builders account for roughly one and a half% 2% of the final cost of a home um it really is kind of concentrated in in in in construction costs um but on the demand side um that's where we see it really being a challenge with respect uh to uh to to to to higher mortgage rates fueling a broader conversation about about the lack of affordability um all of that saying that
• 144:30 - 145:00 we've certainly seen home sales uh struggle uh over the last few years um we've seen uh housing activity uh more broadly uh be challenged um in ways that uh in ways that I think depart from what we've seen in the overall economy more generally um that being said though I think when we turn specifically to this part of the country there are you know some additional Silver Linings when we think about what's going on elsewhere um certainly what we when we look at lists of of of of affordability we see that
• 145:00 - 145:30 the greatest challenges are certainly kind of on in those coastal areas um at the same time the home ownership rate tends to be higher kind of across the Midwest um and and and and and and thirdly at least more recently we have seen at least in terms of permits we've seen a bit of a faster uh uh faster growth in uh permits to actually start a a home in the midwest relative to the rest of the country now that doesn't take away from the lack of housing but
• 145:30 - 146:00 it does suggest that there's a bit more of a faster uh uh uh growth in terms of in terms of the housing that's coming down the pipeline um in the next two to three months so all of that for me says yes on the one hand definitely challenges particularly uh in the midwest uh get given all of the macro dnamic interacting um with Global Financial CH with Global Financial uh uh uh issues um but at the same time when I
• 146:00 - 146:30 think about some of the key fundamental kind of drivers of housing specifically at the local area uh many of them on balance suggest a bit better here than maybe other parts of the country thank you so that brings that facilitates my next question you talked about how um the affordability tends to be more of an issue on the coast but we do see some struggles here uh and you we do in the in the midwest here use that term affordable housing uh to think about especially uh I am I of course
• 146:30 - 147:00 work at NSU so I think about students and I think about their ability to enter the the workforce as a a new grad and a place to find a place to live as a new grad and so um that ability to have affordable housing so we know this is a focus Nationwide and here in the Midwest it's a Workforce challenge um can you talk a little bit about the current conditions related to that term affordable housing um and what your thoughts are on on if there's things that could help to remedy that situation yeah uh you know let me say that uh you
• 147:00 - 147:30 know particularly um you know one of the ways to think about housing is certainly you know in terms of affordability and and that's an appropriate way to think about you know uh how much income do you have uh what is the uh price for the home what is the mortgage rate you might even extend it to taxes and insurance and think about kind of what we call Piti more generally um to start to get at affordability um but you know another way to think about housing is really to think about it as your life cycle that
• 147:30 - 148:00 is to think about okay I'm living with my parents um ultimately I move out and you know hopefully I'm able to find a a home typically your first home is going to be a rental um ultimately we hope that life events happen such that you then feel the confidence and the ability to then get into Home Ownership generally you'll buy an existing home first um and then ultimately you know move up to a more expensive uh but hopefully your dream uh new home um so you know for me when I think about your
• 148:00 - 148:30 question that really kind of makes me focus on kind of housing as a as as part of that life cycle um and then what are the challenges with affordability kind of right there um so you know a couple things uh the first one is um certainly we have seen uh challenges um with first of all with respect uh to uh to to to incomes um in part uh fueled by uh student loan debt that might be taking on uh research does suggest that student
• 148:30 - 149:00 loan debt does delay uh ultimately your ability to get into Home Ownership um but at the same time I Matt had a terrific chart uh showing um how uh uh uh the higher cost of living winds up eroding the purchasing power of your income um and that's also going to be critical but it's hitting up against the challenges that Builders are facing in terms of being able to bring affordable rental housing to Market such that what we are really observing is a large share uh of of rent or households um that are
• 149:00 - 149:30 that are what we call Cost burdened um that is uh 30% uh of their of of of of their income goes to their rent uh in a given year um even a large percentage that are severely cost burdened where 50% uh 50% of their income uh uh uh uh may go to rent I mean ultimately what we're also seeing is increases in people who are then moving back in uh with their uh with with with their parents so all of that I think is really that
• 149:30 - 150:00 affordability challenge um with respect to housing is interacting particularly with a group that's at the beginning stages of their earnings life cycle in ways that may make it more challenging and ultimately delay uh their ability to move AC move to progress across that life cycle ultimately to home ownership thank you look at all the things you're learning today when we think about economic growth in the region and we think about businesses wanting to
• 150:00 - 150:30 expand we think about them wanting to hire workers we think about uh where those workers are going to come from and whether they're going to move to town and if they're going to stay in town um one of the aspects that I promote when I talk about this area that I discovered when I moved here that I think is fantastic is that it is a fantastic place to start a business so there is an entrepreneurial climate that allows uh starting of businesses here that is not necessarily the same in every state so that leads me to our third panelist so
• 150:30 - 151:00 I'm going to ask Cody a little bit about um first of all sort of she she gave you a preview of what 50 South Capital does and what their uh plans are I if you were thinking of starting a business if you were thinking of expanding if you had a new idea because we have a lot of those here in North Dakota um can you explain sort of how venture capital operates here in North Dakota and across the country and maybe um what industries are getting the most Focus perhaps in the midwest because I could say some but I don't have any information to back
• 151:00 - 151:30 that up fair um yeah I mean I think nationally if you were paying attention to to venture There Was You know the peak of the hype cycle was in 2021 there was a zero interest rate policy environment people were writing checks for wild ideas the valuations were Sky High um that has resulted in a liquidity crunch now in 2024 because companies are staying private a lot longer the IPO window has been closed for quite some time the increas in interest rates have
• 151:30 - 152:00 reduced the m&a activity and so all of a sudden you know companies are working to grow into those valuations which means they're not exiting and without exit that means that LPS don't have liquidity to be able to then reinvest in subsequent funds and so um there certainly is is a little bit of a I would say Market correction going on in Venture I think 2024 there was 80% less fewer firsttime funds and there were in 2021 which means it's really hard to go
• 152:00 - 152:30 raise a fund right now Blue Chip firms that you know people know those Brands they're they're taking up the majority of new LP capital and so um that macro environment means Ventures getting a lot more disciplined um the focus continues to be on not just scale and you know Venture math is a little bit 1 plus 1 has to equal 5 instead of 1 plus 1 equals 2 and so um there's always been a focus on scale but there's now I would say much more of a focus on your
• 152:30 - 153:00 durability of your growth and your unit economics and are you Capital efficient and you know how is the capital going to help you actually grow instead of um to some extent in 2021 where it was just writing checks at Wild valuations just to get the money out of the funds um the supply to demand ratio private Capital to startups has flipped so in 2021 there was more Capital than there was demand uh for that kind of capital and 2024 it you know ends the opposite way and so
• 153:00 - 153:30 expect that to certainly kind of be the case into 25 but I think more locally um North Dakota's private Market is still fairly nent and so you know we haven't had um crazy headlines we used to be on the very bottom of the number of venture deals and the total volume deals um until the growth fund was activated in 2021 and so we're starting to see some some very real movement on the number of deals being done um I firmly believe
• 153:30 - 154:00 it's hard to be what you can't see and so every time someone you know raises around or gets on a stage or has a big meaningful win for customers that's that's sending a signal to the market that you can build here um but in regards to Industry specifically you know 2024 nationally AI deals took up 45 % of venture capital so it's not going anywhere it's going to continue to to be that way um and in North Dakota there's there's AI all over our underlying portfolio you know we've committed 89
• 154:00 - 154:30 million that's gone into five funds um and for direct co-investments our portfolio has invested over 150 million now into nearly 50 companies have been impacted by the work um and it's everything from construction Tech to uas to longstanding manufacturers in this market um to a lot of egg Tech and kind of everything in between so you know I think if you're an established business
• 154:30 - 155:00 owner and you're part of that screen on on thinking about generational transition um part of our portfolio construction is is the underlying belief that North Dakota is not immune to that generational transition uh we firmly believe that firms that are here are going to win those opportunities because um a handshake still mean something here and you know especially I live in Dickinson so the further west you go the more they're averse to anyone from New York City or you know a full-on suit so
• 155:00 - 155:30 um you know I think just knowing that there are firms that are sourcing here firms with deep roots here firms that share the conviction in North Dakota um many of whom are sitting down in the black building now with an office and so uh for the transitional piece that part's there for the startup component there has never been a better time to start a company in North Dakota than there is right now um and it is it is hard to encapsulate how much both policy Financial Resources but there is now a
• 155:30 - 156:00 community that says what can we do to help you um that is real and palpable and makes a very big difference for entrepreneurs so if you're thinking about it just do it and start um and if you're someone who's you know just wants to be in the arena of supporting entrepreneurs there's a lot of strategic JS in here um you know become a customer think about you know investing as a strategic partner invest in the funds that are trying to invest in the market so they can increase their LP base um
• 156:00 - 156:30 because I truly do believe like Venture and private Equity but especially Venture you saw the slides that technology is what's going to continue to increase our productivity and if we can keep betting on our own here we're going to be better off in the long run this is such an optimistic panel I'm loving it it's fantastic uh just a reminder there's a QR code at your table so if you would like to send some questions in uh I can direct them to a specific panelist if you want or we can throw them out to everybody if you want
• 156:30 - 157:00 so you can scan the QR code or go to chamber questions.com um I'm going to throw one out for all three of you so I we'll see who wants to answer it first um each of you has talked about a little bit about what you expect will happen in the coming year so I'm going to just make you give that a little bit more a finer point so in the next 3 to five years uh in your field what do you think they will be the biggest Trend or shift uh that Business Leaders here in this room need to be preparing
• 157:00 - 157:30 for yeah I'll start off you know um I certainly want to pick up on the technology Point um you know uh I think particularly with respect to supply of of affordable housing um and that relates to you know the challenge I think that the real estate sector has around productivity um we just we don't get a lot of Labor productivity in fact over the last 20 to 30 years it's
• 157:30 - 158:00 basically been flat with some fluctuations around the broader economic cycle um you know what that suggests is either you need a whole lot more workers um but you know that it's already been articulated how those challenges at the macro level have important implications for uh for the availability of Labor um uh in in in in in the real estate sector um but then it also starts to bring in you know uh what can we do around Factory built housing what can we do around is there more that we can do
• 158:00 - 158:30 around manufactured housing is there more um that we can do around prefab is there more that we can do um to try to uh to re to in part reduce those costs in part gain greater productivity around housing um that is certainly something that I think is somewhat nent at when you look at the data um and and and that in part is reflect is uh reflects uh uh the challenges with with financing uh among other challenges um but certainly
• 158:30 - 159:00 one that I think uh is getting a lot more attention um across a number of of of spaces um that's on the supply side is what can we do you know what can we do around technology to um to to to to to increase housing that's going to run into building codes that's going to run into Perman I mean it's going to interact with all of the different challenges that are at play maybe you need a little less wood uh but at the same time do can you have a factory that allows you to build uh to uh two regul two two two two two two permitting rules
• 159:00 - 159:30 two regulations across a number of different areas in order to drive scale um on the demand side um you know I you know certainly I think uh it's it's it's you know it's around it's around population I mean certainly uh you know one of the one of the kind of Silver Linings I think that we've seen um uh uh is uh amidst the affordability challenge uh particularly on the on the forsale side of the market has been that Millennials are still sizable in part because their parents were sizable um
• 159:30 - 160:00 and uh and as they go through specific life events um you know jobs uh uh larger families um Etc that does itself put pressure uh on you uh to buy a home I always like to tell a story when my um it it it hit me personally when uh we when my wife was pregnant with our third kid um and this was in uh December November December of 2022 and we drove a
• 160:00 - 160:30 Jetta then and I loved my Jetta because it you know we live in the city it that small car can get into every parking space it's fully paid off why do I want to take out debt for a car um but you know a Jetta is not going to fit you know all of the people that are the five people that are now uh in my family um but at the same time uh around December 2022 excuse me December 2021 uh chairman pow gets up and says they got it wrong on inflation and as
• 160:30 - 161:00 someone with an economics background it's okay you know interest rates are going up you know you don't wait you have to buy and so you know in that case certainly on the margins affordability matter to me um but given the fact that we were adding another kid we needed that bigger car um and you know and and and and that's what and that's what we had to do and and and subsequently we wound up having high gas prices at the same time so a double whammy there but that really spoke to me about behaviorally that certainly affordability can matter but as you also
• 161:00 - 161:30 go through these certain life events there is that need for more space there is a need to make those purchases um that will ultimately show up in in the data now why do I say all that I say all of that because you know next 5 to 10 years is where we really see that Cliff around population um even I mean you you know the charts were already shown um if you if if if if you if you plot the population by age I mean you see that by the time younger gen Z gen Alpha you're talking about real population declines
• 161:30 - 162:00 even population declines to the point that will we start saying a new will we start telling a new story around you know housing and whether or not we have enough housing or the type of housing for people that would be something that's very interesting but it's something that I think will be coming in the in the in the medium term um that I think will ultimately be critical for the real estate sector thank you Julie do you want to highlight what you think sure yeah thank you absolutely so I mean you talk about our optimism and I think a big key to the optimistic tone here is
• 162:00 - 162:30 the state states that we're operating in um there's um Paul mentioned earlier a lot of programs here to be supportive of businesses and I'll just say that the EDC has uh what they call their smartbook and it's I don't think it includes everything but it's a pretty exhaustive list of all of the um economic um incentives tax incentives that are available to um the region in fact the states Minnesota North Dakota
• 162:30 - 163:00 and um and some and some national programs as well so um that I think there's good reason for optimism here um what is going to change over the next three to five years is technology I don't I don't know if there's a sector that would have a a different number one um for banks there um you know AI is putting us in a spot where we can we can give customers access to their data um very secure very simple um and and um and real time it's
• 163:00 - 163:30 going to be transformational for businesses and helping them make decisions it's helping us make decisions it's going to help us be um more prudent at underwriting it's going to help us um be more prudent in managing our balance sheet um we think that people and we we're in a people business we think people are still the core of what we do um but but technolog is going to have an impact and and hopefully a positive one I mean I
• 163:30 - 164:00 think you know if we keep that people Centric mindset technology will just only enhance it um when it comes to the kinds of growth we're seeing from businesses it is the workforce is is um the workforce challenge is not going to get better um with the number of people turning 65 per per mat every year so um absolutely financing for automation um and then if you and if you look at some of the area programs there is support
• 164:00 - 164:30 there's tech support there's um there's State funding the Bank of North Dakota has some fantastic programs there are there is support for automation there's support for buying the Machinery there's support for training your staff um the five you know the the the 5% jobs that we don't even have a job title for today you're going to need support businesses are going to need support and how do we how do we train the the individuals to do these brand new jobs so um so that's what I see for the future thank you
• 164:30 - 165:00 so I'm not going to let you answer this question because I actually got someone to send in a question and I'm so excited that someone actually sent a question in for you that I'm going to just short circuit well you can answer both of them so I'm giving you two which is give us your forecast of what you think will happen in three to five years but in addition to that we heard heard from Matt uh that we expect that bond yields probably will remain high we're not probably going to change the amount of government borrowing that's happening so um with bond yields High um and when we
• 165:00 - 165:30 think about the choice of those who have funds to either invest them in bonds or to invest them in um different types of funds of which you manage um are you seeing any of that movement are you are you can you address what we if we bond yields to stay high how that affects your ability for private Equity or venture capital and then do you see some people who are just choosing to wait and and hold and be much more cautious
• 165:30 - 166:00 rather than than participate yeah I mean so on the first thing about the predictions for the next three to five years the only thing I would add Beyond just AI continuing to to consume a lot of the capital dollars is um Matt mentioned this but the the focus on National Security and what that means now for venture capital um historically Venture wasn't investing in National Security because it takes a long time to do anything in in deep Tech and hard tech and doesn't fit some of the return profile but um the
• 166:00 - 166:30 sba's and the dod's partnership and now they're starting to license some s funding to really focus around the 14 critical Technologies around National Defense and National Security you're starting to see funds across the market who are really saying okay what does a AI do to help help us get deep Tech figured out faster and more efficiently um and that's everything from you know I think Shannon mentioned this earlier like sometimes we take for granted in North Dakota that we know where our food comes from and food security is a
• 166:30 - 167:00 national security issue and so you know we're really looking at how does egg Tech play into that um certainly cyber security Healthcare bio it's you know National Security is more than just like the weapons discussion it's really around American dynamism and I think we'll continue to see that focused in the next 3 to 5 years on the question around you know Bond I think broadly across 50 south I mean that's that's where there's so much interest in private credit right now because you can get the liquidity um
• 167:00 - 167:30 quicker you still have an elevated return and then there's activeness on the secondaries Market where folks just want liquidity and the distribution that that is not coming right now because of the exit window being so closed so I think the fundraising market for firms in the next you know 12 to 18 months is going to continue to be hard um if you've primarily raised from high net worths there's a lot of conversations being had around cash and where does that money go and do you want it to be
• 167:30 - 168:00 that liquid um if you're raising from institutions institutions have had a little bit of an overallocated to venture because they haven't been able to get liquidity and so there's that reset happening um but I think it ultimately comes down from at the fund level it just comes down to your performance and how are able to Source have you been able to have you know either marked or you know realizations that are real or just paper but if they're paper is there a status a story behind that um and I think in North
• 168:00 - 168:30 Dakota the state's just taken this big commitment to fostering a private Market that can invest locally um and and because of that you know there's there's this we're almost like the outlier to some of the national Trends because there are more firsttime funds there are more funds looking at North Dakota um um there is more stuff being built here as a result of that that climate you know on a per capita standpoint perfect thank you um we're getting close to the end so I'm going to ask each of our panelists
• 168:30 - 169:00 they have one minute can you do this in one minute I don't know that any of you can do this in one minute um each of them has one minute to sort of give their final closing thoughts on our discussions today and we'll be um headed into our next part of the the panel so go ahead I'll start with you Julie awesome thank you so um in closing I would say um with the uncertainty um that we seem to be facing today the best thing we um can do for our customers and our customers can do for us is to
• 169:00 - 169:30 collectively control our destiny so for our customers make sure make sure your your capital structure is correct we are Advocates of carefully managed leverage um if it if it if your business aligns with that um make sure that you're protecting your liquidity make sure that you're communicating early and often with your bank um the the world's going to throw us curve balls and the best thing we can do is is be ready for them so um thank you perfect Michael you know um
• 169:30 - 170:00 I'll say two things um the first one is that uh the world's not going to stay like this forever um and uh you know to the point that you were making earlier um you know those that uh you know those companies we see it especially coming out of the Great Recession those those businesses uh that were that were in the construction industry um that were able to uh diversify um away away from construction maybe toward home improvements um those that were able to
• 170:00 - 170:30 partner um with uh with with with with with with with industry and with government we really the ones that were able to get through um those trying times so for me it really is around you know how do you diversify how do you uh remain connected to the broader ecosystem um in a way that helps you smooth out your EXP experience over the ups and downs yeah the last thing I would say is just um bullish on North Dakota and and the Midwest is on the rise I mean I think people realize that there are unbelievable communities to raise a
• 170:30 - 171:00 family here there's a community of support that looks different and um good deals come from good Founders and there's really good Founders in North Dakota and across the Midwest so um optimistic about 2025 nationally but really bullish on on what can happen here fantastic fantastic thank you all three of you thank you for your time today uh thank you for everyone who sent their questions in uh we are delighted to have had a discussion today about investment I think you heard some common
• 171:00 - 171:30 themes uh from Matt's presentation and from our panelist today and from Rich's conversation this morning uh we all are very bullish on on the Midwest we're all bullish on North Dakota and Minnesota and the things that are happening here um there are headwinds no doubt and I liked the way Matt put it where he said there are opportunities for error uh and so uh perhaps uh we will be uh part you know reach out to your Bankers reach out to your Venture Capital friends uh think about what the uh atmosphere feels like
• 171:30 - 172:00 in your town so that we can address some of those housing concerns and recruit more people uh to the Midwest to North Dakota specifically so uh I appreciate all of your comments today I appreciate the look at really the Midwest part in the context of the us and what we expect to happen in the next few years or so so please join me in thanking our panelists for their time today and we're GNA wrap up and I
• 172:00 - 172:30 believe that we'll have Shannon next so thank you ladies and Gentlemen please welcome back to the stage the president and CEO of the Fargo Morehead West Fargo Chamber of Commerce Shannon F all right we have wrapped up so three hours in a pretty quick fashion so um I just want to say thank you so much to all of you for attending those that um uh watched online uh to our partnering Chambers this is why we are able to do this uh in the level that we are and
• 172:30 - 173:00 then our sponsors um C County Electric you're a phenomenal partner have always been uh Bremer Bank uh is uh such a great partner to work with and we're so excited uh to welcome uh new friends and family of Old National Bank as you enter into our Marketplace we're really looking forward to that uh I want to say uh we've got a couple things coming up I'd be remiss if I didn't talk uh about our next uh uh Summit is the Midwest agriculture Summit we talked a lot about agriculture today and how important
• 173:00 - 173:30 agriculture is uh to not just our economy uh to the National economy to the global economy uh and what we're doing around uh food sustainability uh food security uh as it relates to National Security so June 10th is that event um I also tell you that the reason we are successful is because of the engagement that all of you have with us I would highly highly encourage you to consider joining us on our DC Flyin this year we're taking a group of Business
• 173:30 - 174:00 Leaders and Community leaders May 19th through the 21st to to Washington DC we have new partners joining us from other parts of North Dakota um and Minnesota this we there will be briefings by all of our key agency uh leaders which we've got some really good um agency leaders positioned in the midwest in the administration right now and so we have an opportunity to access them we'll meet with all of our Congressional delegates we'll do uh some fun tours and just
• 174:00 - 174:30 being able to be together I think this is what we talk about why is it that we have such great attendance at events like this it's because people want that belonging they want to be together so join us in DC I promise you it will be a really good time I'm looking out there to some of you that have joined us in the past I know it's on your calendar already but May 9th to 19th through the 21st um once again we just really thank you for all of your engagement in participation uh my team I want to thank my team uh they uh are so many of their
• 174:30 - 175:00 duties not assigned uh or un uh or things that they focus on they served you your breakfast this morning uh so to the team that puts together this the content the agenda the logistics uh I couldn't work with better people so I wish you all the best uh today we look forward to seeing you again really soon in the future have a great day [Music]
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