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Despite sweeping budget cuts and rising unemployment across the state, the Iowa Department of Economic Development’s (IDED) Innovation and Commercialization Division is receiving nearly a half million dollars this year to fund student internships.

The Iowa Student Internship Program, which sprouted from a piece of legislation that was passed two years ago, receives a $480,000 state appropriation each year in the form of repayment funds to the department, and the program’s manager remains optimistic that the funds will keep flowing in.

“As time changes and the economy changes, the program will change and hopefully we’ll be able to add more money to it, and we’ll be able to offer more internships,” said Alana Anderson, the program’s manager. “So in the coming years, we may be able to double, perhaps even triple the program.”

Currently, the program is targeted toward Iowa-based bioscience, advanced manufacturing and information technology companies that have 500 or fewer employees. Businesses that fall under these requirements and want to have a student intern can apply for grants to help fund the intern. Anderson said once she receives the applications, she reviews the structure of the proposed internship and awards a $3,100 grant for each internship she accepts. According to the application guidelines, in order for an internship to be considered, the intern must be substantially involved in at least one the following areas: research and development; engineering; process management and production; product experimentation and analysis; product development; market research; and business planning and administration.

“This is almost a perfect marriage of government, business and education,” Anderson said. “Those are the three core things that we need for economic development; they are all tied together and it’s really difficult to separate one from the other. That connection has to be strong because as companies grow and change, education has to grow and change with the companies, and those two things spur economic development.”

Anderson said the program, which funds more than 150 internships a year, has nearly 40 grants still available for summer 2009 and spring 2010, and has extended the deadline for submissions from May 1 to May 8. Companies can apply to have up to three interns funded per fiscal year through the program.

“This program definitely encourages students to look at other companies that aren’t the ones that you see in the news every day,” Anderson said. “These aren’t Fortune 500 companies, but they are good, solid companies that have a lot of growth potential.”

Anderson said interested businesses must submit job descriptions for their internships, which are required to last eight weeks, averaging 30 hours per week, if the student will be working during the summer, and 14 weeks averaging no less than 10 hours per week if the student will be working during the spring school term. Also, students who are hired for the internships must be within two years of graduation.

“Once upon a time an internship was a luxury, but not a requirement, and certainly not something you could find readily,” she said. “But the idea here is that if students have good jobs and know that there are companies here, and they can find a job in their field and they can make a decent living, the likelihood is that they may not leave. But if you don’t know what is available to you, it’s easy for everything else to look more appealing because you don’t know what’s right in front of you.”

One large incentive for students is a base pay of at least $14.50 an hour. Anderson said companies are required to pay a minimum of $14.50 an hour to their students, with IDED matching dollar-for-dollar up to $3,100. Last year, Anderson said the average wage combined from all the applications was nearly $16 per hour.

“We are paying for half of the internship. It’s capped at $3,100, so as long as the company pays the minimum, it doesn’t matter how much more they pay if they want to; they’ll just hit their $3,100 cap a lot sooner,” she said. “But when you are looking at highly skilled individuals, $14.50 is a certainly a fair wage for what you are asking them to do and to produce. I’ve seen applications come in at $23 or $24 an hour, so on some level, if you are willing to give a really good opportunity, you are going to get good students to fill those positions and then ultimately, good employees.”

Leann Jacobson, president of the Technology Association of Iowa, echoed Anderson, emphasizing the importance of appropriate compensation for the tasks the students perform in high-tech internships.

“Despite the economy, there are jobs out there for high-tech workers, and businesses are going to need to use and invest in technology to compete,” Jacobs said. “And careers such as programmers and database administrators are very highly compensated jobs, and so the internships are appropriately compensating students. Our industry analysis shows that tech firms, on average, pay about 48 percent more than the state norm for all jobs.”

And even though the economy has painted a different picture than Anderson had planned on, she said she’s confident that the trends in the information technology, advanced manufacturing and biosciences sectors will turn around.

“At this time last year we were talking about a workforce shortage and how in the next two to five years we were going to have a workforce shortage,” she said. “Well, the economy has since changed, but the reality is, the economy isn’t going to stay like this forever, and four years from now we are going to be talking about what we were talking about last year. The conversations have just been put on hold; they haven’t gone away, because nothing stays down forever.”