A new chapter in South Dakota’s biotechnology sector begins with the opening of the Discovery District in Sioux Falls. This 80-acre campus, inaugurated this year, features its first building dedicated to enhancing the state’s life science and biotechnology research industry. After nearly three decades of planning, this initiative aims to foster collaboration among various stakeholders to position South Dakota as a leader in these expanding fields.
The Discovery District is home to both emerging and established companies focused on biotechnology. This includes major players like Sanford Health, Avera Health, and the Rapid City-based innovation firm Phylloceuticals. According to Built In, a prominent online tech community, biotechnology merges biological, engineering, and computer sciences to utilize living organisms and biological systems for diverse applications, ranging from pharmaceutical research to food production.
Joni Ekstrum, the executive director of the South Dakota Biotech Association, highlights the growing interest in the industry. “Membership (of the association) has grown in size. We’ve attracted not only biotech members but also law and construction firms interested in our growth,” Ekstrum stated. This expanding interest reflects the increasing recognition of biotechnology’s potential.
Market Study Reveals Industry Growth
The Discovery District’s 2025 Market Study offers insights into the biotech landscape in South Dakota and nationally. Conducted by Tung Nguyen, who manages marketing for the district, the study is in its third year. In its latest iteration, Nguyen attended the BIO International Convention in Boston, engaging with industry leaders to discuss their priorities and what South Dakota can provide.
Key themes emerging from the market study include the strategic advantage of South Dakota’s transportation infrastructure, growth in healthcare and pharmaceutical imports, and an environment conducive to early-stage business development. One international life sciences company noted, “A business may have five years of runway in Boston, but for the same capital, that business can have a 10-year runway in South Dakota.”
Nguyen emphasized the collaborative spirit inherent to South Dakota’s smaller industry. “We naturally collaborate given our small population size,” he explained, suggesting that this interconnectedness can be a significant advantage for companies looking to establish themselves in the state.
Challenges and Opportunities for Future Growth
South Dakota’s foray into biotechnology is relatively recent, following former Governor Mike Rounds‘ establishment of funding for specialized research centers at public universities in 2004. As the industry evolves, ongoing collaboration and support will remain crucial. Ekstrum noted, “We’ve come a long way in the past 20 years, but we need ongoing state support to foster this growth.”
Despite the potential, South Dakota faces challenges. According to the BIO’s Best Practices 2025 report, South Dakota is one of only two states without any incentive programs for the biotech sector. This lack of support is highlighted in the South Dakota Science and Technology Plan published by the Established Program to Stimulate Competitive Research (EPSCoR), which ranks the state 47th for business research and development and 50th for academic R&D efforts nationally.
Nguyen acknowledged these rankings as “humbling,” but he remains optimistic. “Low rankings do not equate to poor capabilities in academic research,” he stated, suggesting that a different perspective on these numbers is essential for understanding the state’s potential.
The unique opportunities presented by South Dakota could distinguish it from established tech hubs like Silicon Valley. Nguyen expressed a desire to cultivate an identity that reflects the state’s unique strengths rather than merely replicating successful clusters elsewhere. “What’s the point of replicating another cluster in America?” he questioned.
Ekstrum pointed out that South Dakota’s advantages include a favorable tax environment and rich agricultural resources. “We have tremendous commodities in agriculture and significant potential for value-added processing,” she noted, emphasizing the importance of developing local capabilities to enhance profitability for farmers.
Nguyen also highlighted the state’s strong ties to the Department of Defense, particularly through facilities like Ellsworth Air Force Base. As biotechnology gains prominence in national security discussions, South Dakota’s ability to collaborate with federal agencies could enhance the industry’s prospects.
The Discovery District is already making its mark, with its first building housing three tenants, including OmegaQuant LLC, a nutritional analytics company. With 25,000 square feet of space still available, the district anticipates significant job creation, projecting 2,800 new positions within the biotech and life science sectors over the next 25 years.
Ryan Oines, president and CEO of the Discovery District, emphasized the importance of job creation and collaboration with the local student workforce from the University of South Dakota’s Sioux Falls campus. “Each organization we engage with adds momentum,” he explained, indicating that the presence of more biotech firms could spur additional growth.
As the Discovery District continues its mission, the long-term vision remains clear: building a robust biotechnology ecosystem in South Dakota that not only supports local businesses but also attracts national and international interest. The journey may be gradual, but the potential for transformative growth in South Dakota’s biotech landscape is evident.
