A new study recommends that Iowa pump $302 million over 10 years into developing its biotech industry. The bulk of the money should go into the state's three universities to attract and retain premier scientists, develop research facilities and turn ideas into new products and new companies.
The study was conducted by the Battelle Institute, an Ohio-based economic consulting firm. The Iowa Department of Economic Development paid Battelle $230,000 to do this study along with another one, on Iowa's biotech industry.
The study predicts that Iowa's $302 million investment would attract or create 130 new bioscience businesses and 5,100 high-paying biotech jobs, and indirectly create another 10,950 jobs.
Announcing the results of the study, Governor Tom Vilsack said the biotech initiative would leverage Iowa's farming strengths with plant, animal and medical research at the universities.
Use what we grow and what we know
"This strategy combines what we grow with what we know," says Vilsack. He announced the results of the study at the July meeting of the Iowa Board of Regents in Sioux City.
What isn't clear is where the state would get that kind of money for the massive investment in higher education.
"I'm not prepared to write out a check for X millions of dollars," says Vilsack, who notes that state officials are in the process of preparing their 2006 fiscal budget. "This is a priority and we try to find resources for our priorities. I'm ready to find out how we can do this."
Battelle recommends the state pay for nearly $170 million of the initiative through bonding. The remaining $130 million would come from the state's general budget.
Would create more value for farmers
Walter Plosilla, a Battelle economist who helped prepare the study says the plan, if put into place, "would create more value for Iowa farmers and create higher wage jobs for their sons, daughters and grandchildren. Today, that value and those jobs are going somewhere elseâ€”out of Iowa."
With most states trying to attract biotech development, national experts say there are not enough companies and jobs to go around. Plosilla says Iowa needs to act now and get into the game or else Iowa will be left behind.
Mike Blouin, director of the Iowa Department of Economic Development, says Battelle's recommendations are key to the state's efforts to create a new economy based on biotech, advanced manufacturing and information services.
Iowa Values Fund needs to be revived
The recommendations come at a time when the state's premier economic development program, the $503 million Iowa Values Fund, is in limbo after a court challenge. Vilsack says, "The Iowa Values Fund Needs to be reconstituted with a permanent source of funding."
About $56 million in business incentives for 36 companies has been on hold since a state Supreme Court ruling in June. Iowa Democratic and Republican leaders in the legislature can't agree on how to resolve regulatory reforms that are tied to the Iowa Values Fund legislation.
The focus on higher education is occurring as state universities in Iowa have undergone drastic cuts in state funding, $105 million since 2001, the report says.
Iowa may lose "stars" to other states
Plosilla says Iowa universities will lose key scientists and economic development opportunities without improved funding of research initiatives, equipment and facilities. "Iowa won't have the excellence needed to be competitive."
He points out that "Other states have begun massive biotech research initiatives. The star faculty members of Iowa's universities will go elsewhere."
The new businesses in Iowa would generate $1.4 billion in new sales, the study says. And the state of Iowa would attract $1.5 billion in federal and industry investment.
State, higher education and private industry leaders are discussing the recommendations. "We need to be creative in finding financing, including the possibility of redirecting existing economic development spending," says Vilsack.