The Backyard Economy: Iowa

— -- The winds of economic change are blowing in Iowa these days. The Hawkeye State is home to some 1.5 million workers, and increasingly those workers are finding employment in the renewable energy sector.

Most Americans have heard about ethanol, an oil-replacing corn derivative. And there is certainly plenty of corn in Iowa.

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The state is one of the top corn growers and has several ethanol production facilities. But most people would have no idea that Iowa is taking the lead in wind energy.

"We're trying to convert our old manufacturing base to advanced manufacturing and renewable energy," said Mike Tramontina, director of the Iowa Department of Economic Development. "In the past two years, we've created state funding to research, develop and commercialize new technology in these areas."

Tramontina said Iowa is a leading producer of wind-power turbines, blades and towers, thanks to two state-of-the-art plants.

This investment in the future of energy is good for the state's workers, many of whom have seen pink slips handed out thanks to the downturn in the housing and mortgage markets.

"We just had our largest new home builder close two weeks ago, and we had a lumber yard close in Des Moines a month before, and Pella Windows closed a plant here," Tramontina said. "But so far it has not been dramatic and we've been pretty much able to absorb that work force into other businesses."

The state is also home to some of the country's largest financial services firms ? Wells Fargo Financial, Principal Financial, Aviva and Nationwide Insurance, to name some of the larger players. "That's a very good sector, with good paying jobs with good benefits, so that's one reason we've continued to see our economy perform," Tramontina said.

Experts say these big financial services companies will likely face tough times in the coming year as the national economy slows their efforts to grow their businesses.

Overall, Moody's Economy.com says the state will like continue to see its economy expand slightly during the national downturn, saying, "The national recession will weigh on financial activities employment in coming quarters, but a stable roster of agribusiness will minimize the severity of the decline in the state's economy."