South Dakota may be known more for its expansive prairies, rugged Badlands, and colossal presidential sculptures than for its cutting-edge technology. But in recent years, a small yet mighty tech ecosystem has taken root in the Mount Rushmore State, fueled by a combination of entrepreneurial spirit, digital expertise, and Midwestern work ethic.
According to the Computing Technology Industry Association (CompTIA), South Dakota‘s tech sector employs over 18,000 workers and contributes $2.1 billion to the state economy each year. While these numbers may seem modest compared to coastal tech hubs like Silicon Valley or New York City, they represent significant growth and opportunity for a state with a population of just 886,000.
In fact, South Dakota‘s tech industry has grown by nearly 30% in the past decade, outpacing the national average. Much of this growth has been centered in Sioux Falls, the state‘s largest city and commercial hub. With a population of 187,000, Sioux Falls has emerged as a rising star in the Midwest tech scene, thanks to its supportive business climate, skilled workforce, and vibrant startup community.
Datasync/Flywheel: Empowering Businesses with Data
One of the standout success stories in Sioux Falls‘ tech ecosystem is Datasync, a software development and consulting firm founded in 2005. Now operating under the name Flywheel, the company has grown from a small startup to a global player, serving clients in manufacturing, healthcare, agriculture, and other data-intensive industries.
Flywheel‘s mission is to help organizations harness the power of their data to make better decisions and drive operational efficiency. The company‘s team of software engineers, data scientists, and business analysts work closely with clients to design and implement custom solutions that integrate disparate data sources, automate workflows, and provide real-time insights.
One of Flywheel‘s key offerings is its manufacturing analytics platform, which enables producers to monitor and optimize their production processes using data from sensors, machines, and other sources. By identifying bottlenecks, predicting maintenance needs, and minimizing downtime, manufacturers can reduce costs, improve quality, and increase output.
For example, Flywheel worked with Rosenbauer America, a leading fire truck manufacturer, to develop a real-time production monitoring system that tracks key metrics like cycle times, defects, and labor costs. The system has helped Rosenbauer reduce production delays by 20% and improve on-time delivery to customers.
Flywheel has also made significant inroads in the healthcare sector, particularly in the area of telemedicine and patient engagement. The company‘s software platform enables healthcare providers to securely share medical records, schedule virtual appointments, and communicate with patients via mobile devices. During the COVID-19 pandemic, Flywheel saw a surge in demand for its telehealth solutions as providers sought to maintain continuity of care while minimizing in-person contact.
Looking ahead, Flywheel sees significant growth opportunities in industries like financial services, logistics, and renewable energy. The company recently expanded its Sioux Falls headquarters and plans to hire 100 new employees over the next few years. With annual revenues exceeding $25 million, Flywheel is well-positioned to continue its trajectory as a leading tech firm in South Dakota and beyond.
Other Key Players in South Dakota Tech
While Flywheel may be the most prominent tech company in Sioux Falls, it‘s far from the only one making waves in the state. Here are a few other notable firms driving innovation across various industries:
| Company | Location | Employees | Revenue (2021) | Industry |
|---|---|---|---|---|
| Daktronics | Brookings | 2,500+ | $482 million | Electronic displays |
| **Raven Industries*** | Sioux Falls | 1,300 | $348 million | Precision ag, engineered films |
| Black Hills Corp. | Rapid City | 3,000+ | $1.7 billion | Utilities, digital infrastructure |
| Innovative Systems LLC | Mitchell | 180 | N/A | Telecom software & services |
| Sencore | Sioux Falls | 200 | N/A | Video broadcast equipment |
*Acquired by CNH Industrial in 2021 for $2.1 billion
These companies showcase the diversity and depth of South Dakota‘s tech ecosystem, which encompasses everything from precision agriculture and renewable energy to telecommunications and digital media. While each firm has its own unique focus and market niche, they all rely on advanced software, data analytics, and digital technologies to drive innovation and solve complex problems.
Take Daktronics, for example. Founded in 1968 by two engineering professors at South Dakota State University, the company has grown into a global leader in electronic displays and scoreboards. If you‘ve ever attended a major sporting event or walked through Times Square, chances are you‘ve seen a Daktronics display in action. The company‘s state-of-the-art LED screens and video boards can be found in stadiums, arenas, and commercial spaces around the world, from the Super Bowl to the Las Vegas Strip.
But Daktronics is more than just a manufacturer of flashy signs. The company is also a pioneer in digital content management, cloud-based control systems, and data-driven advertising. Its latest generation of displays feature advanced sensors, cameras, and AI algorithms that can detect and respond to audience behavior in real-time, enabling more targeted and engaging content experiences.
Another company at the forefront of digital innovation is Raven Industries. Founded in 1956 as a manufacturer of high-altitude research balloons, Raven has since expanded into a diverse range of industries, including precision agriculture, engineered films, and aerospace technology. In particular, the company‘s Applied Technology division has emerged as a leader in autonomous farming equipment, GPS-guided steering systems, and other precision ag solutions.
Raven‘s technology enables farmers to plant, spray, and harvest crops with unprecedented accuracy and efficiency, reducing costs and maximizing yields. For example, the company‘s Hawkeye® Nozzle Control System allows sprayers to apply herbicides and fertilizers with pinpoint precision, minimizing waste and environmental impact. Raven‘s AutoCart™ system enables a single operator to control multiple grain carts during harvest, streamlining logistics and reducing labor costs.
In 2021, Raven was acquired by CNH Industrial, a global leader in agricultural and construction equipment, for $2.1 billion. The acquisition will enable Raven to accelerate its growth and innovation in precision ag technology, while providing CNH with a strong foothold in the rapidly evolving world of autonomous farming.
Nurturing the Next Generation of Tech Talent
One of the key factors driving the growth of South Dakota‘s tech industry is the state‘s strong pipeline of skilled workers. South Dakota‘s universities, including South Dakota State University (SDSU), Dakota State University (DSU), and the South Dakota School of Mines & Technology (SDSMT), are producing a steady stream of graduates in computer science, engineering, and related fields.
DSU, located in Madison, has particularly emerged as a hub for cybersecurity education and research. The university offers a range of degree programs in information systems, cyber operations, and digital forensics, as well as a PhD program in cyber defense. DSU is also home to the Madison Cyber Labs, a state-of-the-art research facility that partners with government agencies and private companies to develop cutting-edge cybersecurity solutions.
SDSU, the state‘s largest university, is also making significant investments in tech education and research. In 2020, the university opened the Precision Agriculture Center, a $46 million facility that houses classrooms, labs, and collaborative spaces for students and faculty working on advanced farming technologies. SDSU is also home to the Jerome J. Lohr College of Engineering, which offers degree programs in computer science, electrical engineering, and other high-demand fields.
To help retain and attract tech talent, South Dakota has launched a number of initiatives aimed at supporting the state‘s tech workforce. In 2019, Governor Kristi Noem signed legislation creating the South Dakota Tech Schools Initiative, which provides funding for high schools to offer computer science courses and apprenticeships in partnership with local tech companies. The state has also launched the Dakota Roots program, which helps connect out-of-state job seekers with career opportunities in South Dakota.
At the local level, cities like Sioux Falls and Rapid City are investing in coworking spaces, accelerators, and other resources for tech entrepreneurs and startups. The Zeal Center for Entrepreneurship in Sioux Falls, for example, provides office space, mentorship, and networking opportunities for early-stage companies in fields like software development, e-commerce, and biotechnology. The center has helped launch over 300 startups since its founding in 2004.
Challenges and Opportunities Ahead
Despite its many strengths, South Dakota‘s tech industry still faces some challenges as it looks to compete on a national and global stage. One of the biggest challenges is attracting and retaining top talent, particularly in highly specialized fields like artificial intelligence, machine learning, and data science. While the state‘s universities are producing more STEM graduates than ever before, many still choose to leave for larger cities with more job opportunities and higher salaries.
Another challenge is the relative lack of venture capital and angel investment in the state. While South Dakota has a growing number of successful tech startups, most are bootstrapped or rely on traditional bank financing to fuel their growth. More risk capital could help spur the creation of new companies and accelerate the growth of existing ones.
Despite these challenges, many in South Dakota‘s tech community remain optimistic about the future. The COVID-19 pandemic has accelerated the shift toward remote work and digital transformation, creating new opportunities for tech companies and workers in smaller cities and rural areas. Sioux Falls, with its low cost of living, high quality of life, and growing tech ecosystem, is well-positioned to attract remote workers and startups looking for an alternative to the crowded and expensive coastal hubs.
The state government is also taking steps to support the tech industry‘s growth. In addition to the Tech Schools Initiative and Dakota Roots program, Governor Noem has made cybersecurity a top priority for her administration. In 2019, she signed an executive order creating the South Dakota Fusion Center, a centralized hub for sharing threat intelligence and coordinating cyber defense efforts across state agencies and critical infrastructure providers.
Looking ahead, South Dakota‘s tech industry has the potential to be a major driver of economic growth and innovation for the state. With a talented workforce, supportive business climate, and growing ecosystem of startups and established firms, the Mount Rushmore State is poised to make its mark on the digital frontier. As companies like Flywheel continue to push the boundaries of what‘s possible with data and technology, they are not only creating jobs and wealth, but also solving real-world problems and improving people‘s lives.
In the words of Daktronics co-founder Al Kurtenbach, "Innovation is not a destination, it‘s a journey." For South Dakota‘s tech trailblazers, that journey is just beginning.
