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Advanced Manufacturing Drives Iowa’s Economy

Supply chain mapping, data on autonomous fleets, and low-cost renewable energy can all be found in Iowa…surprised? You shouldn’t be.

Q3 2017
Iowa’s location in the center of the U.S. and good highway infrastructure offer manufacturers in the state access to major markets in the Great Lakes region, and to both the Atlantic and Gulf coasts.
Iowa’s location in the center of the U.S. and good highway infrastructure offer manufacturers in the state access to major markets in the Great Lakes region, and to both the Atlantic and Gulf coasts.
Editor’s Note: This article was supplied by the Iowa Economic Development Authority, which approved and paid for this posting. While the state is a major agricultural producer, advanced manufacturing is it’s leading industry.


Don’t let our #1 rankings in corn, eggs, and pork production fool you — Iowa is a manufacturing state. Employing more than 200,000 skilled workers, advanced manufacturing is Iowa’s single largest industry.

In fact, 85 percent of the state’s total exports are manufactured goods and nearly 16 percent of U.S. agriculture equipment employees work in Iowa. With all this industry, Iowa has the highest concentration of machinery manufacturing employees in the country, according to Bureau of Labor Statistics data.

As a state we are aggressively working on several initiatives to meet the future needs of advanced manufacturers. One of these initiatives includes offering manufacturers data-driven models of their supply chains to plan new locations and optimize their shipping and receiving models. We’re engaging in partnerships to prepare our major highway corridors for autonomous freight. We use a higher percentage of wind for our electricity — over 36 percent — than any state and we make it easier than any other state for businesses to purchase renewable electricity directly. And while already owning the #1 spot in the nation in public high school graduation rates, Iowa is also setting ambitious goals for post-secondary education and STEM-skills training.
Iowa’s most valuable manufacturing subsector is in machinery. One of the nation’s highest concentrations of agricultural and construction equipment manufacturing employment is located within the state’s borders.
Iowa’s most valuable manufacturing subsector is in machinery. One of the nation’s highest concentrations of agricultural and construction equipment manufacturing employment is located within the state’s borders.
Iowa is offering companies digitized supply chain mapping.
In 2015, the Iowa Economic Development Authority and the Iowa Department of Transportation (Iowa DOT) partnered with a private consulting group to create a model of the major supply chains in the state. The project integrated public- and private-sector freight data in a computer model to represent current and forecasted demand, transportation and inventory capacity, and quantitative performance data.

The state is using this model to make strategic investments in freight infrastructure, such as a new intermodal hub under development near Cedar Rapids. This location is the only place in the country that can serve Chicago, Milwaukee, Minneapolis, St. Louis, and Omaha by freight carrier in a one-day round-trip as permitted by federal regulation.

The state is also offering this model as a service to private companies interested in reducing their own supply chain costs. The model can provide an analysis of demand and capacity across a company’s supply chain, and provide recommendations for places to make strategic investments.

This strategy is part of an overall effort by the state of Iowa to prioritize infrastructure investment in places that will improve safety and efficiency for both our residents and our business community. Another example is how the state embraces autonomous freight fleets.
IEDA Programs

The Iowa Economic Development Authority administers a number of programs businesses can use to expand or locate in Iowa, train staff, and grow their operations. The full list of programs can be found at iowaeconomicdevelopment.com/business.

  • Refundable R&D Tax Credits
    Iowa is one of just a few states to offer refundable R&D tax credits. Iowa companies earn refundable tax credits for research and development investments that may be paid directly in cash to the company once its tax liabilities have been met.
  • High Quality Jobs Program
    This program provides qualifying businesses assistance to offset some of the costs incurred to locate, expand, or modernize an Iowa facility. This flexible program includes loans, forgivable loans, and investment tax credits, among other benefits. It can also include a refund on taxes paid to contractors or subcontractors during construction, and on racks, shelving, and conveyor equipment for distribution projects.
  • Certified Sites
    Iowa’s certified sites program is overseen by nationally recognized site selection firm McCallum Sweeney Consulting. Seventeen sites are already certified as development-ready and low-risk, and several more are in the certification process. See all the sites at iowaeconomicdevelopment.com/certifiedsites.
No state has gone further to advance autonomous fleets.
The U.S. Department of Transportation recently named the Iowa City/Cedar Rapids I-380 corridor one of 10 automated vehicle proving grounds in the nation. Unlike other proving grounds, the corridor features a variety in climate, road users, and roadway landscapes. It also includes the nation’s largest and most expansive virtual simulated testing ground at the National Advanced Driving Simulator on the campus of the University of Iowa.

This announcement came after the Iowa DOT partnered with HERE — a digital mapping company owned by Audi, BMW, and Daimler — to map the I-380 corridor. The Iowa DOT is now offering this data for free to private companies that would like to test advanced vehicle technologies in the area. It’s the latest progressive move for Iowa, which is also leading the way in renewable energy usage.

Iowa is the easiest state in which to source affordable renewable energy for your plant.
If access to renewable power is a deciding factor in your site evaluation, the data shows that Iowa is the best place to look for a new location. A 2017 joint report from the Retail Industry Leaders Association and the Information Technology Industry Council said Iowa is the easiest place in the country for manufacturers to source renewable energy for their operations.

The state received this ranking because Iowa’s utilities generate more than 36 percent of the state’s electricity from wind — the highest percentage of any state. Iowa’s grid is also the #1 most stable of any state according to U.S. News & World Report, and the most recent U.S. Energy Information Administration data found our industrial electricity rates to be more than 19 percent below the national average.

To push our leadership further, Iowa’s utilities have pledged to invest $4.6 billion in additional wind capacity. MidAmerican Energy, a Berkshire Hathaway subsidiary and the state’s largest utility, has power purchase agreements in place with Google and Facebook to provide their Iowa data centers with 100 percent renewable energy. There are very few utilities in the country that have the ability or experience to create and fulfill renewable energy power purchase agreements on this scale. Last year, Iowa’s second largest energy utility, Alliant Energy, also announced a $1 billion investment to add 500 megawatts of wind capacity. These investments and others show Iowa’s commitment to renewable energy and is a major differentiator for a manufacturing state that is also setting ambitious goals for its workforce.

Iowa’s goal is to have 70 percent of the workforce with training beyond high school by 2025. Iowa’s top-tier education system is focused on creating workers for the future of manufacturing. Iowa already has the highest public high school graduation rate in the country, and leaders of the state’s government are making post-secondary education a priority. The stated goal of this initiative, called Future Ready Iowa, is for 70 percent of Iowans in the workforce to have education or training beyond high school by 2025.

The state’s network of 15 community colleges is central to this initiative, and the leaders of those institutions are experienced in working with local employers to create relevant coursework. A recent example of this can be found in the state’s booming wind electricity industry, which worked with several of Iowa’s community colleges to create some of the nation’s first wind turbine technician curricula. Now those colleges produce most of the industry’s workforce.

Additionally, due to the state’s low cost of living, this skilled manufacturing labor is available in Iowa for an affordable rate. Overall the state of Iowa offers the second lowest cost of doing business in the country. To reduce upfront costs to expanding or relocating employers, the state has also developed a robust certified sites program.

Seventeen certified, development-ready sites are available throughout the state.
Are you ready to consider an expansion in Iowa? Iowa’s certified site program is overseen by the nationally recognized site selection firm McCallum Sweeney Consulting. Currently, 17 sites are deemed to be relatively risk-free for development, and most have access to rail. All of Iowa’s certified sites can be viewed at iowaeconomicdevelopment.com/certifiedsites.
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