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RAPID CITY, S.D. (KOTA) – South Dakota is putting new money behind an effort Governor Larry Rhoden says will make national security the state’s “next big industry.”

Speaking at The Box during the Black Hills Military Coalition’s Defense & Industry Symposium, Rhoden announced the creation of the South Dakota Defense Institute (SDDI) — a new hub intended to connect business, education, and government and help South Dakota companies compete for federal defense contracts.

“We announced the creation of the South Dakota Defense Institute,” Rhoden said. “And this is a big step in hanging meat on the bones of the commitment I made in the State address… That national defense would be South Dakota’s next big industry.”

Rhoden said the state will invest $5 million from the Future Fund to establish and operate the institute for an initial five-year period.

According to the governor’s office, the institute is expected to serve as a central coordinating point for partners across the defense ecosystem and, once operational, engage directly with federal defense agencies and other related stakeholders to support businesses pursuing defense contracting opportunities.

Rhoden also announced an additional $1 million from the Future Fund to Elevate Rapid City to help purchase a building in Rapid City’s “Innovation District.” The facility will serve as the institute’s headquarters and is also expected to function as a collaboration space to bring together students, researchers, and defense companies to support innovation, workforce development, and industry growth.

South Dakota’s Commissioner to the Governor’s Office on Economic Development, Bill Even, gave us more info on the actual physical construction of the space. “The School of Mines and Western Dakota Tech have been pretty integral in figuring out how we really jump start the innovation district in downtown Rapid City with the natural focus on national defense,” He said. “And so we’ve identified some properties and we’ll be working closely with Elevate to secure those as well.”

The governor’s office said the South Dakota Defense Institute will be organized adjacent to the Governor’s Office of Economic Development and staffed by experienced leaders with military and defense industry backgrounds.

The institute will partner with private businesses and local economic development organizations, along with state agencies including the South Dakota National Guard, the Department of Labor and Regulation, the Board of Regents, and the Board of Technical Education.

State officials said additional details on staffing, timelines and programming will be released as the institute’s launch progresses.

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Rep. Dusty Johnson wants tougher penalties for drug dealers who distribute methamphetamine and fentanyl, while also vowing to create a task force to review how improvements can be made to stop repeat offenders from committing more crime.

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The plan has the endorsement of top law enforcement officials.