With its latest announcement, MidAmerican Energy is transforming Iowa’s competitive position for major-energy economic development projects.
Some individual and institutional stakeholders in today’s job creation landscape cling to a bygone [or never-was, more accurately] era’s definition of what economic development is, or should be -- some grainy picture of a couple of company executives, joined by the local economic developer, gazing out at a corn field, talking about building ‘a big new plant in town.'
Fortunately, today most of us know that job creation projects rarely come in big, one-off packages with job creation figures in the multiple hundreds. Instead, they tend to come in batches of smaller job creation projects, strung together.
We’re not chasing smokestacks anymore.
Corporate facilities projects everywhere are more capital-intensive than ever as companies drive enormous investment into technology and, in many cases, boast modest job creation numbers. This is not woe-is-us stuff; quite the contrary. Economic developers and their stakeholders who have adapted to this new reality can be as successful as ever, delivering new jobs and tax base into their communities at strong rates -- if we acknowledge that economic development has shifted, by and large, from a sales-based endeavor to a capacity-building one.
The end-product landscape has changed from singular, large scale job creation projects to more nimble, technology-intensive projects as a product of a global economy changing at breathtaking pace. Successful states and regions, and their economic development partners, have changed, too.
In the past, the working definition of economic development was the marketing of a community to a company in a competitive arena, kind of gladiator style [“Children gather round! No retreat! No surrender!”- King Leonidas]. Communities and states competed with dozens, even scores of their counterparts in what amounted to an enterprise sales process. Meeting basic requirements for a project like land, workforce and infrastructure, got you some consideration.
Today, the site selection process for companies has become increasingly global and intensely technology-driven. It’s no longer enough for a region or community to be effective at selling itself to corporate suitors. Technology has stripped out virtually all of the opportunity for a region or community to smooth out its deficiencies with effective salesmanship [“This is Sparta!”]. Today, many times we do not know we are under consideration for projects until we are a finalist community.
Companies have shorter timelines and less capital budgeted for the site selection process, which means site location professionals are conducting perhaps 80 percent of the process digitally.
So in the face of this new[ish] reality, what does a region and state that is truly globally competitive for projects do? It spends less time selling and more time building capacity, honing and building its assets to align with the demands of global business.
That’s why MidAmerican Energy's announcement today that it will invest $3.6 billion [the largest capital investment ever announced in Iowa history] to grow its wind generation capacity to ultimately represent 85 percent of its total generation capacity in the coming years is exceptionally important to the future of Central Iowa and to other regions in the company’s service territory. Already more than half of the energy MidAmerican produces or will produce it derives from wind- making it arguably the greenest major energy utility in the country. Eighty-five percent is an incredible leap forward.
MidAmerican’s ability to deliver increasingly renewable energy to heavy-load customers is a distinct strategic advantage to every region and community it serves. One need look no further than the generational investments of Facebook in Altoona [more than $1 billion] and Microsoft in West Des Moines [$2 billion] to prove out this theorem; both Facebook and Microsoft have aggressive corporate strategic priorities which demand that significant proportions of the power which feed their massive data centers be renewable. MidAmerican’s ability to ultimately deliver 100 percent renewable power to Facebook’s data center campus in Altoona has been cited by the company as a major determinative factor in choosing Iowa over other parts of the country.
With its latest announcement, MidAmerican is transforming Iowa’s competitive position for major-energy projects.
Facebook and Microsoft are not alone. Frustrated with the political intractability relating to addressing climate change, companies across the globe are taking the matter into their own hands and rolling out corporate sustainability stratagems which demand increasingly higher proportions of renewable energy to feed new and existing facilities and assets.
The move to shift its energy generation footprint so dramatically toward renewables provides what amounts to an immediate upgrade to the competitive position of MidAmerican-served communities throughout the region.
And it offers economic developers throughout our region a tremendously effective new tool in the battle for the expected proliferation of major power-load projects which will prioritize renewable energy to be sited in the United States in the coming years.
Brent Willett, CEcD, is executive director of Iowa's Cultivation Corridor. Contact him: