Iowa is in America's heartland, and that is one of its economic strengths. Right in the center of the country, Iowa boasts easy interstate access, abundant rail service and the Mississippi River as its eastern border.
“There are two things that can never be taken away from us, and that is rail and river. Those things helped found our community way back when, and they're becoming even more important today,” says Jason Hutcheson, executive director, Grow Greater Burlington Inc. Increasing fuel costs, he says, mean cargo movement via water and rail will spike, positioning eastern Iowa for future growth. Hutcheson adds he “sees the day” when infrastructure improvements will make the Mississippi accessible year-round in southeast Iowa.
“Our advantages have been and continue to be rail and barge,” echoes Steve Ames, president and CEO, Clinton Regional Development Corp. North of Burlington on the Mississippi, Clinton is parlaying its strategic location into a unique industrial park concept called the Lincolnway Railport. Construction began in May on the park, which will link two active barge terminals with the Union Pacific mainline, with switching to Burlington Northern Santa Fe and Canadian Pacific Railway railways. Ames says area communities in both Iowa and Illinois are considering establishment of a port authority and a foreign trade zone, both of which would make the Lincolnway Railport even more attractive.
INDUSTRIES AND INNOVATIONS
Iowa's location and transportation alternatives mean logistics, warehousing and distribution are a target sector. Two major coast-to-coast, border-to-border interstates (I-35 and I-80) pass through Iowa, and both the Mississippi and Missouri rivers accommodate barge traffic. In fact, there are 69 barge terminals in the state, plus five major air cargo carriers and 19 railroad companies. Trucks move an average of 133 million tons of inbound freight and 163 million tons of outbound freight annually over Iowa's highways.
Value-added agriculture is a thriving and growing sector in Iowa, and it is no wonder: Iowa boasts 23 million acres of cropland and leads the nation in the production of corn, soybeans, pork and eggs. Iowa exports $1.5 billion worth of live animals and meat products each year, again leading the nation.
“We grow the veggies here, and we want to process them here,” says Lori Holste, executive director of the Western Iowa Development Association, representing Pottawattamie County and area communities. The organization and local government are spearheading a local initiative designed to forge connections between growers and producers. The goal is to build a sustainable regional food system — production, processing and distribution. In Pottawattamie, agricultural giant Bunge has soybean processing and biofuels operations, and The Scoular Co. operates 14 western Iowa grain-handling facilities. Last year, Scoular built a new 1 million bushel grain-storage bunker in Portsmouth and completed handling capacity improvements at its Emerson site. Roger Jones, executive director of the Ottumwa Economic Development Corp., says Cargill Meat Solutions in his community “has remained in hiring mode” despite the tough economy.
Manufacturing remains a top sector. It is Iowa's largest industry, contributing $19 billion annually to the state's economy. More than 4,200 manufacturers employ more than 230,000 Iowans. Jones says that Ottumwa is working specifically to lure companies related to airport manufacturing. That is because of the city-owned Ottumwa Regional Airport and its adjacent industrial park. The 1,440-acre complex features full aviation services and two runways, one 5,885 feet. Another lure for aviation manufacturers is “the synergy” created by Indian Hills Community College. “Of course, I may be prejudiced about this, but it's the best community college I've ever seen,” Jones says. “They have an aviation technology program that would fit in nicely with a company looking to build airplanes.”
Hutcheson describes the Burlington region as an area with “a long heritage of industry and skilled manufacturing, and that plays well for advanced manufacturing.” He predicts that rising transportation costs, a demand for quality and just-in-time procurement will mean a return of manufacturing jobs to the United States. For manufacturers, Burlington offers its transportation assets, plus low energy costs and available land and water.
Iowa sees renewable energy as a sector for the present and the future. The combination of the state's manufacturing and agricultural strengths means renewable fuels are growing. Iowa ranks first in the nation in the production of ethanol, and second in the production of biodiesel. The state also ranks second for wind generation output, and was recognized in April by the American Wind Energy Association as the state that generates the most electricity by wind for its own consumption, at 14 percent.
Iowa also leads the nation in the number of wind-energy jobs. Nine international companies manufacture wind equipment in Iowa, with more than 200 manufacturers in the wind-power supply chain. “Eastern Iowa has been pretty successful in getting tower manufacturers, turbine manufacturers and blade manufacturers,” Hutcheson says. “We're continuing to pursue the entire supply chain related to wind energy.”
In fact, during President Obama's tour of the Midwest in April, he made a stop at a Siemens plant that produces rotor blades for wind turbines in Fort Madison, about 20 miles south of Burlington. The plant, with a 600-employee workforce, opened in mid-2007 and has already expanded. The Siemens facility uses rail to ship its products to wind farms.
Facilitated by the Iowa Office of Energy Independence, the Iowa Power Fund is a $100 million program for grants, loans and other financial incentives to help promote research and development and improve Iowa's competitiveness in clean-energy fields.
TALENT AND EDUCATION
Several Iowa universities are recipients of Iowa Power Fund dollars, for research related to biomass, clean coal gasification, hydrogen, solar cells and more. The Iowa Alliance of Wind Innovation and Novel Development links Iowa's three Regents universities (the University of Iowa, Iowa State University and the University of Northern Iowa), five community colleges, Iowa's independent colleges and universities, the state and the wind-energy industry. The combined brainpower tackles research interests identified by wind-energy firms. Some of the sophisticated research topics include meteorology; electrical conversion; mechanical issues with gearboxes, gears and drive trains; composite materials, particularly for blades; and software and sensors.
Iowa has 15 community colleges with workforce-training prowess. Holste says Iowa Western Community College is “one of our largest partners in economic development” and a critical component of Pottawattamie County's plans to lure and nurture food-processing enterprises.
Hutcheson says, “We're very fortunate to have leadership at the community college that says, ‘We're here to serve the needs of industry, and not only training the workers you need today, but the workers you may need down the road.'” He recalled that when Siemens needed skilled welders, Southeastern Community College built a new curriculum and facility to meet the need, despite a challenging budget cycle.
ASSETS
An asset for business and industry is Iowa's package of tax incentives designed to enhance job creation. The High Quality Jobs program provides qualifying businesses tax credits to offset costs incurred to locate, expand or modernize an Iowa facility. The assistance package is quite flexible and includes tax credits, exemptions and/or refunds. To qualify, a business can't be retail or service-oriented and must meet wage threshold requirements. The following incentives are possible:
A local property-tax exemption of up to 100 percent;
A refund of state sales, service or use taxes paid to contractors or subcontractors during construction;
A refund of sales and use taxes paid on racks, shelving and conveyor equipment for distribution projects; and
An investment tax credit equal to a percentage of the qualifying investment, amortized over five years.
LIFESTYLE
With a cost of living on average 25 percent lower than the rest of the nation, Iowa is an economical place to live and do business. Iowa is consistently ranked high in livability surveys, thanks to a low crime rate and quality education.
For complete details on conducting business in Iowa, visit:
www.iowalifechanging.com
www.clintondevelopment.com
www.growburlington.com
www.ottumwadevelopment.org
www.wida.org
