Democratic gubernatorial candidate Joe Satrom told a roomful of Mandan business boosters that North Dakota should focus more on growing existing businesses and less on recruiting out-of-state businesses with economic incentives.

Satrom outlined that and other ideas for improving the state's business climate during a Wednesday meeting of the Mandan Progress Organization.

"I want North Dakota very badly to overcome its tendency to sell our labor short," he said.

Satrom said the state should use its interest buydown economic development program called PACE to anchor a new economic development approach he calls "Growth from Within." He said existing businesses should have more access to the program to upgrade or expand.

"I think it's time that the state of North Dakota works with North Dakotans in the area of economic development," he said. "There are businesses here that want to expand and entrepreneurs who want to get started. Why spend millions of dollars on somewhat random out-of-state recruitment when we have the right people right here?"

He said quality jobs are a top priority of his campaign for governor, and while the state has had some success recruiting companies to North Dakota, many of the jobs only pay $8 to $12 an hour.

Satrom said most of the best North Dakota companies have been home-grown, and while out-of-state companies sometimes come to the state, "they're equally willing to relocate once subsidies run out."

Gov. John Hoeven's press secretary, Don Larson, said the state already emphasizes existing businesses over out-of-state recruitments.

Satrom said the state needs to focus more on creating not just jobs, but quality jobs because the outmigration of young North Dakotans indicates they're "demonstrating their sense of opportunity with their feet." North Dakota ranks second in the nation for the number of households in which both parents work, he said, and 76 percent of all North Dakota mothers with children up to age 4 work outside the home.

Larson said North Dakota is making progress, citing the U.S. Census Bureau's recent report saying North Dakota was the only state to increase its income and reduce poverty last year.

"We're increasing wages, adding jobs and people are making more," he said.

Satrom said as he campaigns statewide, he has encountered many people who are suspicious of the way state business contracts are awarded and said the state should do more to eliminate "cronyism." He said there are "questionable methods" of awarding contracts to consultants, advertising and public relations firms, highway contractors and information management services.

"There needs to be a more professional, accountable and open system of handling bids and requests for proposals," he said.

Satrom did not provide any specific examples of that because people are reluctant to get involved because of fear they'll lose opportunities in the future. He said if he's elected, he would make sure the process is open and fair.

Larson said that accusation is ridiculous because all state agencies use a competitive RFP (requests for proposals) and bidding process, and every contract is awarded on its merits.

Satrom said many state contracts require the contractor to have a hefty liability insurance, making it tough for small companies to compete. But Larson said the governor and attorney general already have been working to address that problem, which he said is the result of a federal court ruling dealing with sovereign immunity.

(Reach Deena Winter at 250-8251 or deena.winter@bismarcktribune.com.)