Free Enterprise Staff  | March 31, 2015

This City Represents the Future of Healthcare

Residents of Sioux Falls, South Dakota, are proud of their city for a lot of reasons (see here). If you ask local public officials, they’re especially proud of the huge strides the area’s healthcare sector has made over the past decade.

That’s because Sioux Falls rapidly changed from a city whose healthcare sector was relatively indistinguishable from those elsewhere in the region, to one of the strongest in the Upper Midwest. A combination of factors have helped drive its ascendance, including public and private investments, the city’s convenient location between two other major healthcare hubs, and the local government’s commitment to facilitating healthcare’s growth.

The city’s robust healthcare economy is a point of pride for Mike Huether, who was recently reelected to his second term as the mayor of Sioux Falls. Born in South Dakota, Huether worked in corporate America for two decades before returning to his home state to fulfill a lifelong dream of running for office. In a recent interview with Free Enterprise, Huether said that the city’s healthcare sector has become so strong, in fact, that it has helped offset weaknesses in other industries that were incongruously impacted by the recession and its aftermath.

“We’re going to find the cure for Type I diabetes and breast cancer in Sioux Falls,” Huether said. And that’s just something that was unheard of five to 10 years ago.”

While that may seem like an audacious statement, Huether is confident that Sioux Falls will continue to push the boundaries when it comes to healthcare and medical research over the coming years. There are, after all, “a number of reasons” why it has succeeded since the worst economic retraction since the Great Depression, he pointed out.

“For example, we’ve got a gentleman, Denny Sanford, who invested significantly in Sanford Health,” he explained. “So, he’s helped infuse millions of dollars into finding a cure for juvenile diabetes or breast cancer at that health center, and he wants to build one of the best and most respected research institutions in the Midwest. Then, at the same time, we have another organization in town called Avera McKennan, which is also investing millions into their research, infrastructure and vision.

Benefitting from its partnership with the University of South Dakota’s Sanford School of Medicine, Sanford USD Medical Center is the largest hospital in South Dakota. . And because it is a teaching hospital, it receives government funding that allows it to pursue all kinds of research initiatives, including those into new and better treatments for diseases like breast cancer. Backed by Sanford and his vast personal fortune, the hospital also enjoys strong independent support.

This kind of financial support has enabled Sanford to beef up its research team, which has increased to more than 200 scientists over the past few years. Besides the largesse of Sanford himself, local philanthropists have also backed the medical research facility, donating more than $500 million that has been used to improve its academic and research standing among major national healthcare institutions like the Mayo Clinic and the Cleveland Clinic.

Sioux Falls and the state of South Dakota aren’t resting on their laurels, however; they also actively work to promote the area’s healthcare economy through a range of initiatives. The South Dakota Technology Business Center, for instance, is a massive incubator designed to help entrepreneurs get their ideas off the ground. Distinguishing itself from other counterparts, the 45,000-square-foot facility also features six wet lab suites that biotech and medical startups can use to hone their products and develop new ones.

The University of South Dakota has also helped stoke the healthcare sector’s flame. Among its most successful programs has been the creation of the Graduation Education & Applied Research Center (GEAR), which opened in Sioux Falls in 2009. GEAR’s stated mission is to stimulate applied research and commercialization in South Dakota.

Like the South Dakota Technology Business Center, GEAR encourages entrepreneurship through a number of initiatives and public and private partnerships. The public-private partnership has thus far been successful, resulting in the development of new and novel medical devices and biological materials and processes.

By supporting its medical and healthcare sectors and constantly working to drive growth and fuel innovation, Sioux Falls and the state of South Dakota have been able to become a dominant force in a sector that only a decade ago had a much weaker local presence. With public and private groups continuing to collaborate and devise increasingly creative and innovative programs, Sioux Falls is well on its way to joining esteemed peers like Rochester and Cleveland as one of the nation’s premier healthcare hubs.

This is part of our ongoing #SiliconCitiesUSA series.

What Is #SiliconCitiesUSA?

Over the course of this year, we’ll explore how entrepreneurs and businesses are faring in non-major U.S. cities, beginning with Des Moines, Iowa. We’ll be reporting on the ground from each city, talking with elected officials and business leaders about how they’re harnessing their unique resources and local talent to fuel economic growth and better compete against more established urban centers like San Francisco and New York City.