At the Technology Association of Iowa’s recent Catalysts event, retiring Executive Vice President Gary Scholten of Principal Financial Group said he has watched the fight for growth in Iowa’s tech scene.
“About 10 years ago TAI commissioned a study, and at that time they determined that about 10% of the jobs in Iowa were linked to technology, and over 12% of the economy was connected to technology,” Scholten said.
Out of $117 billion in venture capital funneled to U.S. startups in 2018, only 1.2% came to Midwest-based startups, said Kerty Levy, recently named managing director of Techstars Iowa.
(ICYMI: ‘Everybody is a change agent,’ Catalyst honorees share)
TAI’s Catalysts used last week as a call to auction. This week, the rest of the country heard the call, as a new report highlighted population and economic discrepancies between major cities and the U.S. heartland.
Despite all the growth Iowans are seeing on the plains, 90% of the U.S. job growth in tech — and by extension, the wealth concentration — is in just five cities along the national coasts, causing “a crisis of regional imbalance,” according to a new report from the Brookings Institution and the Information Technology and Innovation Foundation.
Regional divergence is causing an extreme swing in economic impacts, the report argues: The combination of Boston, San Francisco, San Jose, Seattle and San Diego shares 22.8% of the nation’s “innovation employment” of workers in the science, technology, mathematics and engineering industries. The early development of infrastructure, such as broadband, needed by tech companies in a limited number of communities is reinforcing concentration of companies and jobs, and the divergence between national “innovation centers” and underdeveloped regions is exacerbating political polarization.
The study authors — Robert Atkinson, Mark Muro and Jacob Whiton — propose that the federal government could assemble major 10n-year investment packages worth $100 billion over the decade in eight to 10 heartland cities with a minimum population threshold of 500,000 residents.
The Des Moines-West Des Moines metro is right on the map among potential candidates proposed by the study, alongside 34 other communities in 19 states.
(Full report: “The Case for Growth Centers.”)
“Some will say the present proposal goes way too far, while others will say it doesn’t go far enough,” the authors wrote. “The proposed innovation surge would absolutely begin to transform the nation’s spatial malaise. Most notably, it would bring new vitality closer to more communities, allowing for smaller towns and counties to benefit through supply chain relationships, commuting and other interdependencies with the growth centers.”
