By Shana Daley
From the September/October 2015 Issue
If you think Iowa is about corn, you’re right. It’s the gold of the prairie, fueling an economy that’s robust and growing. If, however, you think Iowa is all agriculture, you’re wrong. Iowa’s agronomic ecosystem has spawned a diverse economy that bucks negative national and international trends.
Much of what you know about Iowa is true. It’s what you don’t know about Iowa that will put the Hawkeye State in contention for your business. Iowa is a right-to-work state. Its cost of living is below the national average, helping businesses be more profitable.
Innovators and entrepreneurs also plaster the Iowa landscape. More than 97 percent of the companies in Iowa are categorized as small- or mid-sized businesses. These businesses account for more than half the state’s private-sector workforce.
While often stereotyped as an “ag state,” in reality, Iowa has built upon its agronomic ecosystem to create a diverse business environment and robust, global economy. Eight core industry segments are more dominant than agriculture in terms of contributions to the state’s GDP, employment, or a combination of both, including: manufacturing, transportation, distribution, finance, insurance and real estate.
By creating the ideal environment, Iowa has transformed itself into a hub for a range of global growth industries. With innovation at the core of its growth strategy, Iowa has the necessary tools and incentives for companies of all sizes and all industries to succeed. Industry in Iowa has built a solid foundation in the financial services/information technology, biosciences and advanced manufacturing sectors.
They build quality in Iowa…lots of quality. In fact, IA’s $31.2 billion advanced manufacturing industry is the state’s largest single business sector. That’s right, America’s largest producer of corn, soybeans, pigs and eggs brings in three times more from manufacturing than farming.
Iowa biosciences also are thriving in the innovation economy. Industry experts from Battelle proclaim, “No other location in the country has such a complete suite of capabilities for bioscience development—a suite of capabilities spanning basic plant improvements through to the production of full-scaled biomass products.
Why would Principal Financial, Wells Fargo Mortgage, John Deere Financial and nearly 6,400 other financial and insurance companies locate in Iowa? Why have nearly 140 insurers chosen such a seemingly unlikely place for their headquarters? The answer: Iowa has built an environment that fosters success for insurance and financial services.
State leaders looked to insurance and financial services to help diversity Iowa’s economy in the 1980s. Today, capitalizing on Iowa’s progressive and responsive regulatory environment, more than 6,200 companies employ some 92,000 workers in Iowa’s thriving financial and insurance industries. Companies involved in financial activities account for nearly 6.8 percent of the state’s jobs and 12.6 percent of the total Gross Domestic Product (GDP). Iowa ranks sixth in the country for percentage of total state GDP contributed by the insurance and financial services, nearly 33 percent higher than the national average.
With roughly 525 bioscience entities and nearly seven percent of the industry’s total (for agricultural feedstock and chemical manufacturing) U.S. workforce, locate your company in Iowa and you’ll be in a biosciences epicenter.
In Iowa, payroll costs are nearly 14.1 percent below the national average; and rental and construction of industrial space are 15 percent and 18 percent lower than national rates, respectively. Come to Iowa and make a profit.
Iowa’s two nationally renowned research universities pump engineers and innovation into the market at an amazing pace, and 78 percent of all patents issued in Iowa during the past five years directly impacted advanced manufacturing needs.
TEN INDUSTRIAL SITES ARE DEVELOPMENT-READY
With the addition of six certified industrial sites—bringing the total to 10 —Iowa jumps to the top of the list for companies looking for Midwest expansion, a low cost of doing business and a talented labor pool.
Created in 2012, the Iowa Certified Sites Program combines national site location standards with Iowa’s natural assets and business/targeted industry needs. The first four sites—all 200-plus acres—completed designation in 2014, with the additional six sites earning designation in summer 2015.
“Creating jobs and increasing family incomes for Iowans is my administration’s top priority,” said Gov. Branstad in a July 2015 statement. “With the announcement that six additional Iowa sites have gone through a rigorous certification process to be considered ‘development ready,’ we are moving Iowa to the top of the list for projects that are looking for a home.”
With access to rail and major interstate and connection highways, several sites are ideally situated for large-scale industrial ag operations or high-tech data centers. The Cedar Rapids Land and Air Super Park boasts 582 acres, has rail access and is a mile from I-380. Fort Dodge’s 447-acre site is primed for large industrial users and sits near major Cargill, Valero and CJ BioAmerica global operations. Two miles from I-80 in Van Meter, a nearly 288- acre site is ideally zoned for a data center. Sitting off of I-80, Dexter’s 255-acre site is perfect for a modern distribution center or warehouse.
“Site certification is one of the fastest growing trends, and by introducing certified sites to the market Iowa is better able to compete for large-scale projects,” said Debi Durham, director of the Iowa Economic Development Authority, in a July 2015 statement.
The 10 communities that now feature a certified site include: Cedar Rapids, Dexter, Fort Dodge, Iowa Falls, Marion, Mason City, Norwalk, Perry, Quad Cities and Van Meter.
Iowa’s focused economic development strategy is paying off as the state had a record-breaking year in manufacturing exports in 2014 and has attracted more than $11 billion of private capital investment projects over the last four years. Every corner of the state has benefited from business expansions from top-tier companies—many already with significant Iowa locations—proving that Iowa is on the right track when companies in its own backyard continue to invest.
Iowa’s economy is able to quickly react to global market and industry needs, because its fiscal house is in order. It’s the fourth best-managed state in the United States, with a perfect credit rating and a balanced budget. Iowa’s fair regulatory environment allows for companies to confidently invest in R&D, hire additional employees and expand into new international markets.
The state’s efforts to build and strengthen international trade relationships over the years is coming to fruition. In 2014, Iowa reached a new export record of more than $15.1 billion in manufactured and value-added goods. The state’s exports have increased 39 percent since 2011.
Today, as the nation deals with critical infrastructure issues, Iowa has recognized that a vital component of growing its economy and working with emerging international markets is transportation infrastructure. To keep Iowa a global force to be reckoned with, in 2015, the Iowa legislature approved the first significant increase for road and highway infrastructure in 25 years.
With that, Iowa will invest $3.2 billion over five years to improve the state’s highways, bridges and connections to U.S. interstates (I-29 / I-80 / I-35). These key improvements will elevate the state’s ability to attract major exporters who already benefit from a reliable statewide rail system, several regional airports and the Mississippi River along the state’s eastern border. Iowa also has invested in the first-ever statewide Freight Optimization Study to further assist Iowa businesses with international trade by identifying ways to cut freight costs.
By going through the rigorous site certification process, Iowa’s business-focused communities and local utility partners are bringing the whole package together for national and international companies looking to expand in the Midwest. With a top-notch education system, skilled and productive labor force, affordable housing and utilities, plus a 20-minute average commute, you’ve got a certifiable “risk-free” investment in Iowa.
State officials also recently announced the launch of a Green Certification classification as part of the Iowa Certified Site Program. This program recognizes the growing demand for environmentally sensitive design for companies that are committed to reducing the environmental impact of development.
The Green Certification program is being launched with a pilot round focused on the Green Office Park category. The criteria is designed for multiple office users and ancillary park activities. Similar to the rigorous standards of the existing industrial certification program, stringent due diligence requirements must be met in order to achieve certification. However, the green certification program in will also include recognition of and requirements to protect what might have traditionally been viewed as impediments to development, such as floodplains and wetlands. A focal point of the Green Certification program is the requirement to develop and adopt covenants that will guide the future development of the Green Business Park.
The Woodward Eco Business Park will serve as the pilot site for the new Green Certification program, with applications for subsequent parks to be accepted in July 2016.
To learn more about Iowa’s Certified Sites, visit waeconomicdevelopment.com to jumpstart your next project…the state will provide the shovels.
PROPOSALS ARE FILED TO CREATE A STATEWIDE ENERGY PLAN
The state of Iowa, through the Iowa Economic Development Authority (IEDA) and the Iowa Department of Transportation (IDOT), recently accepted Request for Qualifications (RFQ) proposals from bidders to assist with development of a state energy plan for Iowa. The proposals, received in August, are the first step in the process of developing the statewide energy plan.
An energy plan is a means to set state priorities and provide strategic guidance with decision-making. The Iowa Energy Plan will include an assessment of current and future energy supply and demand, examine existing energy policies and programs, and identify emerging energy challenges and opportunities. It will work to encourage energy, economic and environmental benefits through the goals and recommendations that form during the planning process. Iowa’s Energy Plan will synthesize both the existing state energy goals and strategies that are beneficial for the state, as well as new goals and energy strategies to position Iowa for the future.
Upon selection of a provider, working groups will be formed to provide input, review data and shape the goals and strategies of the energy plan. The working groups will focus in the areas of Economic Development and Energy Careers, Iowa’s Energy Resources, Transportation and Infrastructure and Energy Efficiency and Conservation. Subtopics may include but are not limited to: assessing energy workforce needs/ requirements from an industry perspective, leveraging Iowa’s biomass resources for development of biofuels and biorenewable chemicals, alternative fuels and movement of goods, energy assurance/security and strategies to lower energy demand. Additionally, five energy forums will be conducted across the state to facilitate public input for the Iowa Energy Plan.
IEDA houses the Iowa Energy Office, which coordinates a variety of state and federal programs related to energy. IEDA will act as the lead agency in overseeing the development of the plan, while other state agencies and offices with energy-related functions will serve in an advisory and informational capacity during the plan development.