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Presented By: IOWA ECONOMIC DEVELOPMENT AUTHORITY
  • 6 minute Read
  • iowa economic development authority

How Iowa Became A New Hub For Innovation In Tech & Renewables

From cloud computing to biorenewables, the heart of the nation’s Corn Belt has reinvented itself as a cradle for innovation.

How Iowa Became A New Hub For Innovation In Tech & Renewables

The word innovative is thrown around liberally these days—it’s almost a prerequisite when describing a tech wunderkind or ambitious entrepreneur of any merit. But if you ask Debi Durham, director of the Iowa Economic Development Authority (IEDA), the most inventive and problem-solving people she knows were innovating long before it was a buzzword. Those people are farmers.

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“If you look at the yields these farmers are getting from their land and the added value that they’re providing, this is an extremely innovative group of people,” says Durham. “Really, there isn’t a more innovative group.”

If you think that’s just corn-fed hyperbole, consider this: Iowa’s rich and proven tradition of excellence in agriculture—coupled with its open-armed welcome of new businesses and new ideas—has made it a fertile hub for cutting-edge industries like biorenewables, the collective name given to enterprises that create products from natural, sustainable materials.

In 2016, CNBC ranked Iowa second in the United States for having the lowest cost of doing business. And a study just released in January ranks Iowa as the top state for corporate access to clean energy. Whether it’s startups looking for a place to call home, like Higher Learning Technologies, a maker of education apps based outside Iowa City, or established tech titans like Facebook and Google that are looking to expand, business is booming in Iowa.

 

THE BIRTH OF BIORENEWABLES

Mark Merritt is the founder and CEO of KemX Global, a producer of natural, biodegradable chemicals with applications in industries ranging from pharmaceuticals to household products. KemX began operating at full capacity starting in 2017, making it one of the youngest companies in biorenewables. But the space is growing. Fast. Biorenewable chemicals, which are derived from natural and sustainable resources, are expected to become a $250 billion industry before long. Research by Iowa State University suggests the industry could add as many as 50,000 jobs in the state alone.

Merritt chose Boone, Iowa, as his company’s launchpad after having lived in the state for almost a decade. From the moment he decided to start KemX, he was able to have regular contact with representatives from the state government, soliciting advice for the best ways to make his business succeed there. When the company celebrated the opening of its new refinery in Boone last summer, it was an intimate affair: family, investors, and a few local officials who could rightly be considered key to getting KemX off the ground—including Iowa senator Joni Ernst and Lieutenant Governor Kim Reynolds.

“Seeing them meant everything,” says Merritt. “To actually have people come and support you is a big deal. You can have your family and friends support you all day long, but when government officials who run the show have a vested interest in your success, it means a lot. I don’t think I could have done this in any other state, because Iowa has been so supportive of what we’re doing and why we’re doing it.”

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FROM THE LAND, BY THE LAND

The IEDA is particularly focused on fostering private-sector innovation. That explains why Iowa has been able to attract companies typically associated with Silicon Valley. It all starts with the wind. Iowa’s farmlands are literally swept by wind, which—when properly harnessed—represents a massive supply of renewable energy.

Tech giants like Google and Microsoft have taken notice and established large-scale data-server operations in Iowa. (Yes, Iowa’s wind is being used to help power the cloud.) In 2014, Facebook partnered with local utility MidAmerican Energy to establish its first facility powered 100% by wind energy in the city of Altoona, bringing along 75 full-time jobs.

“Stewardship that comes from the value of the land is in Iowa’s DNA,” says Durham. “Thirty-five percent of our energy portfolio is renewable, and with new installations coming, we’ll be at 40%. That’s a huge calling card to companies, particularly publicly traded ones. I always say that you can find sustainability within the first two sentences of their mission statements.”

 

LEADERS IN RESEARCH

In business terms, companies come to Iowa for the natural resources and stay for the infrastructure support. Over the past five years, 78% of patents issued in the state directly impacted advanced manufacturing, and manufacturing exports grew nearly 80% from 2005 to 2015. Perhaps most impressive is the university system: Iowa’s colleges and universities turn out more than 5,300 STEM graduates every year, with over 2,000 of those being engineering graduates.

A natural point of emphasis is biochemicals. Brent Shanks, an Iowa native, is director of the Center for Biorenewable Chemicals at Iowa State University, where he heads a team of engineers that researches the processes that turn raw biomass into bio-based chemicals. Shanks and his colleagues have been able to push forward progressive, paradigm-shifting ideas in a remarkably short period of time.

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“When we first started working on this area of research around 2001 and 2002, we’d go to our national chemical engineering conferences, and almost no one was working in the area. We helped get some sessions going at those national meetings,” says Shanks. “When we went last year to the meeting, there were probably 40 sessions on these topics.”

As a professor at a state university, Shanks appreciates the support he receives from Iowa, which he says has been deliberate in funding research specifically focused on biorenewables. He has helped out the IEDA, too, contributing to a white paper recommending bio-based chemical production tax credits. Such a symbiotic relationship represents exactly the type of partnerships that the state wants to develop, and what makes Iowa an exciting place to do groundbreaking work.

Shanks and his team are currently working with a series of newly discovered molecules, which might not seem like something that touches day-to-day life until you consider the repercussions. “We have one molecule that’s a really interesting mosquito repellent that no one has ever looked at before,” says Shanks. “We have another one that’s a really interesting food preservative. To me, that’s the exciting part about biomass. If you can talk about new molecules, now you’re talking new value propositions to move our society forward.”

 

PRIORITIES IN FOCUS

The innovations coming from the Hawkeye State have an impact on the entire country. But to keep the advances coming, Durham and her colleagues at the IEDA understand that they must keep their focus trained on Iowa.

“The wealth comes from the land,” says Durham. “Through the decades, we’ve always looked at how to add value to the land. Ethanol and biodiesel resulted from that conversation decades ago. Now, we’ve taken it to the next level.”

This article was created for and commissioned by IEDA.

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