Wind Energy, Ethanol, and Financial Services Among Iowa's Leading Sectors
Mali R. Schantz-Feld (Feb/Mar 08)
Wind energy continues to offer a breath of fresh air to Iowa's economy. According to the Iowa Energy Center, Iowa is the third-largest producer of wind energy in the United States, just behind California and Texas. Mike Tramontina, director of the Iowa Department of Economic Development, notes that in the past year, manufacturing jobs in the wind industry have accelerated. In the past two years, three major wind energy manufacturers have established their North American production facilities in Iowa: Acciona Energy, Siemens Wind Power, and Clipper Windpower. Governor Chester Culver, who served as the keynote speaker at the American Wind Energy Association's conference in Los Angeles last June, cited a recent study projecting that $3.2 billion of wind generation facilities will be constructed each year for the next seven years, all within a 600-mile radius of Iowa.
In other alternative energy sectors, "Iowa is still the number-one producer of ethanol in the United States," says Tramontina, "with 28 plants producing more than 2 billion gallons per year." Currently, 12 percent of the state's energy is derived from renewables, with 30 percent of the nation's ethanol produced in Iowa and 20 percent of its biodiesel produced within the state. Growth in this sector has also affected the agricultural community. "Activity has driven up the price of corn and beans, and stimulated Iowa's personal income and economy," says Tramontina.
New incentives are designed to stimulate business diversity. "In 2007 legislation, we put in place a set of tax reductions for companies in the web portal business," says Tramontina. The new bill upgraded Iowa's tax system related to sales tax, use tax, and property tax for computer-related businesses, exempting the electricity and capital investment necessary for this kind of a facility from sales tax. The strategy worked. In June 2007, Google announced plans for a data center at the Council Bluffs Industrial Foundation's new business park at an investment of $600 million that would result in 200 new jobs. Opening is anticipated for spring 2009. The entire deal includes three parcels totaling approximately 1,185 acres that will provide expansion capacity beyond the two data center buildings that are currently planned. Jobs, including data center managers, Linux administrators and technology assistants, can potentially earn an average salary and benefits equal to about $50,000 per year.
Besides data farms, Iowa also wants to grow its reputation for movie production locations. "Our scenery includes rural settings, older downtowns, woods, and rivers that would be advantageous for moviemakers," says Tramontina. The Iowa Film, Television and Video Project Promotion Program was signed into law on in May 2007, providing tax credits to encourage the production of legitimate film, television, and video projects.
According to Tramontina, the state is also looking for more investments in the biosciences, advanced manufacturing, information technology, and financial solutions sectors. He says financial services is the second-largest sector of the economy. The insurance and finance industry has grown in the past year, with Aviva PLC of Britain purchasing Des Moines-based AmerUs, AEGON adding 400 employees during 2007, and home-grown Principal Financial planning to invest more than $100 million and add 1,500 jobs in Des Moines over the next five years.