Iowa’s Culver Battles Economic Downturn with a Surge of New Jobs

A $700-million infrastructure initiative, national leadership in IT services and wind-power manufacturing give the Hawkeye State plenty of reasons to be bullish about the future.

The worst economic crisis since the Great Depression is forcing the nation’s governors to dig deep into hidden reserves, financial and spiritual, just to keep their heads above the rising tide of red ink.

Every state is being buffeted by the “perfect storm” that was spawned by the near collapse of the global financial system last fall. Survival and recovery strategies vary from state to state, largely depending on whether a solid foundation for economic development was in place before the crisis hit full-force.

Iowa is no stranger to mean-looking storms. According to Governor Chet Culver, Iowans are meeting the challenge of this year’s economic twister head-on, with the optimism and resilience that are hallmarks of the Hawkeye State.

“The economic challenge is historic in its scope,” Culver declared in his annual Condition of the State address in January. “These are difficult days. But in Iowa, we don’t run from challenges, we tackle them.”

Culver is on the front lines of the fight for economic renewal, and his battle cry can be distilled into three simple words: “jobs, jobs and jobs.” The Iowa governor is waging this 21st-century economic battle on land, in the air and in cyberspace.

On the ground, Culver planted his flag last month with a bold $700-million infrastructure initiative he is calling Rebuild Iowa Infrastructure Investment Bonds. The plan, which requires no increase in taxes and is funded with existing state gaming revenue, aims to stimulate job creation by addressing infrastructure needs. Iowa was in the midst of a rebuilding effort following last summer’s floods and tornadoes when the national economic tsunami hit. Culver’s new initiative builds upon the earlier disaster relief effort.

“I’m not just talking about bridges and roads,” he says. “I mean all infrastructure—rail, trails, public buildings, water and sewage-treatment facilities, the utility grid, and telecommunications.”

In addition to the new infrastructure bonds, Iowa also is positioned to fund economic stimulus from its state cash reserves, which currently sit at a record $620 million.

Creating Jobs Out of Thin Air

While it gears up to rebuild its bricks-and-mortar infrastructure on land, Iowa also has staked a claim to national leadership in the efforts to harness alternative energy—in this case, wind power—and turn it into a powerful generator of new jobs.

Gov. Culver proudly cites a new report from the American Wind Energy Association which indicates that Iowa has surpassed California and now ranks second in the nation in wind-energy capacity.

“Iowans have worked tirelessly to build upon our natural strengths and make Iowa a national leader in renewable energy,” he says. “Those efforts are paying off.

Iowa’s success story is further evidence that investment in wind energy is working—investing in wind is investing in job creation and economic growth.”

Iowa is home to six wind-turbine manufacturing companies: Acciona, Siemens, Clipper, Hendricks, TPI and Trinity, representing thousands of green-collar jobs and an investment of almost $250 million in the state. The Hawkeye State is one of only two states to make three component parts of a modern windmill— turbine, blades and tower.

Iowa Scores Big with New Digital Jobs

Iowa’s determination to position itself as an IT service leader received a huge shot in the arm recently with the announcement that IBM will locate a $100-million technology service delivery center in Dubuque, a project that will create up to 1,300 high-tech jobs by the end of next year.

“[IBM’s choice of Dubuque] is one more sign that people around the country are discovering what we have known all along—that with our highly skilled workforce, inviting business climate and quality of life, Iowa is a great place for business,” Culver declared in announcing the site selection.

Working together, the Governor’s Office, the Iowa Department of Economic Development, the City of Dubuque, Dubuque Initiatives, and the Greater Dubuque Development Corp. reached an agreement with IBM on a 10-year lease to occupy the historic Roshek Building in downtown Dubuque. IBM plans to upgrade the building with energy-efficient technology to make it a green facility.

“We selected Dubuque for our new delivery center based on several criteria, including strong positive public-partnership within the city, its competitive business model, and the talent and skills that Iowa has to offer,” says Mike Daniels, senior vice president, IBM Global Technology Services.

Dubuque Mayor Roy Buol adds that Dubuque’s sustainability initiative played an important role in IBM’s selection of the Iowa site. “The adaptive reuse of a historic structure in the heart of our downtown illustrates our shared commitment to sustainable development, historic preservation and community revitalization,” Buol says.

Incentives Were Key to IBM’s Choice of Iowa

Also key to IBM’s decision were $22 million in state incentives for the project, including $11.7 million in direct financial assistance based on a $9,000 forgivable loan per job created; $8.5 million in Iowa New Jobs Training Funding, through Northeast Iowa Community College; and $1.85 million in an Iowa New Jobs Training Tax Credit.

The Iowa Department of Economic Development will provide $450,000 of funding to the non-profit Dubuque Initiatives group to purchase the historic building, lowering its lease costs to IBM.

IBM plans to work with institutions of higher education in the region for recruitment and training of potential employees. The company says it will partner with schools to enhance their curricula to better prepare students for opportunities in the IT industry.

The technical service delivery center in Dubuque will primarily support IBM’s U.S. strategic outsourcing clients, providing server systems operations, security services and end-user services, including maintenance and monitoring of computer hardware and software systems. IBM’s global delivery network incorporates more than 80 strategic centers around the world.

The IBM announcement, the continued growth of Iowa’s wind-power manufacturing hub, and its new infrastructure initiative have Gov. Culver exuding optimism about how Iowa will emerge from the current economic storm.

“Our state was built by the hard work and sweat of people who were not afraid to take on this land with all of its challenges. They believed, as I do, that in every challenge there is an opportunity,” he says.

“I am both optimistic and confident about what the future holds for our state.”