Guest Opinion by Ronald K. McMullen for the Iowa City Press-Citizen
They represent some of Iowa’s considerable assets in the world-wide competition for growth and prosperity. Thanks to advances in communication and transportation, globalization means that Iowa is more connected to and affected by world events than ever before.
Iowa has chalked up substantial economic gains in recent years, despite the dismal national recovery from the Great Recession — Iowa’s unemployment is low, incomes are up, and the state’s finances are healthy. The state has marshaled a multibillion dollar foreign trade surplus; Iowa’s international exports climbed to $13.3 billion in 2011, up a whopping 48 percent over 2009. Agricultural products (corn, pork, and soybeans) and advanced manufactured goods (farm implements, aircraft parts, appliances, etc.) head the list of Iowa’s exports.
Who are Iowa’s best international customers? Canada, by far, followed by Mexico and Japan. Those three countries bought 54 percent of Iowa’s exports in 2011.
How about the burgeoning Chinese market? Unfortunately, last year China spent only 15 cents on Iowa products for every dollar spent by Canadians.
Iowa needs to parlay incoming Chinese President Xi Jinping’s ties to Muscatine into stronger exports to China.
When I was a boy in Iowa, each fall a flotilla of barges descended the Mississippi, laden with Iowa corn bound for New Orleans and then the world. Today Iowa exports only about one-sixth of its corn harvest.
Why? Because more than 50 percent of Iowa’s corn crop and 22 percent of its soybeans are processed into biofuel.
Scores of Iowa biofuel plants provide well-paying jobs and have helped push corn to $7 a bushel, beans to $14, and an average acre of Iowa farmland to $6,708 (around $10,000 in Johnson County).
Environmental concerns aside, the biofuel fillip to the state’s economy could be temporary. Next year a cellulosic ethanol plant is set to open in Emmetsburg. This plant will use corn stover (stalks, husks, and cobs) as feedstock rather than shelled corn.
If advances in cellulosic ethanol make it competitive with corn ethanol (it currently is not), then lower-cost feedstock such as switchgrass or softwood pulp would likely displace corn as the basis of American ethanol.
Iowa’s population is small, slow-growing and aging. Iowa’s advanced manufacturers need a workforce sufficiently large and skilled to continue to compete successfully in world markets. We need to attract and integrate new Iowans, promote more science, technology, engineering and math education (like Iowa’s southeast STEM hub sponsored by UI and Kirkwood Community College) and cultivate global networks of customers and partners.
Iowa’s population rose a bit in the past decade, thanks largely to the Hispanic community, which grew by 70,000 individuals. Some new Iowans need settling-in assistance; West Liberty’s Dual Language Programs have helped facilitate transitions at school and the workplace.
Iowa’s colleges and universities last year hosted 11,164 foreign students and sent 5,621 American students abroad. Bridges of understanding and friendship between Iowa and the world can advance Iowa’s business, service, travel, and personal connections. This year the University of Iowa has a record 3,571 international students, 1,245 of whom come from China. With China’s incoming president already Iowa-friendly, the state should build on its people-to-people and alumni connections to bolster exports to the world’s second-largest economy.
Globalization is a fascinating and complex process. The University of Iowa’s WorldCanvass program will feature an exploration of globalization at 5 p.m. Friday in the Senate Chamber of Old Capitol Museum. The event is free and open to the public.
Ambassador Ronald K. McMullen, a former foreign service officer, is a visiting associate professor at the University of Iowa.