An unexpected side conversation at a recent economic outlook webinar delved into a potential loss of Iowa talent due to federal policy changes.

Three economists who teach at Drake University, Iowa State University and the University of Iowa said they have encountered researchers at their universities who are considering moving to different countries to continue their research. Since President Donald Trump paused or cut research funding to groups like the National Institutes of Health, many researchers have been left without jobs and a way to meaningfully pursue their work, they said.

The webinar, hosted by the Greater Des Moines Partnership, included panelists Chad Hart, an economics professor at Iowa State University, Jeffrey Kappen, a partner at Bâton Global and associate business professor at Drake University, and Anne Villamil, an economics professor at the University of Iowa.

Panelists noted that their observations capture a moment in time, and with many new labor and economic reports coming out this week, those reflections could change.

The webinar primarily focused on tariffs, inflation and interest rates, but at one point serendipitously landed on the topic of talent retention.

Villamil spoke about the uncertainty of federal funding and contracts and how certain entities such as hospitals and universities will be affected.

“I’m particularly concerned from talking to people in STEM fields that a great comparative advantage of the United States has been its leadership in technological innovation and young scientists,” she said. “People are really facing these cutbacks, and I personally have talked to a few people who are considering taking appointments in Europe because other countries look at us and say, ‘This is a great opportunity for Europe to jump-start some of their projects where they have lagged the United States.’ So I hope we’ll give some thought to that, because particularly for people at the beginning of their careers, where they would start out with postdocs or various kinds of funding, as that is being cut, that will handicap us in the future.”

Kappen agreed.

“I think it hurts us in the short term,” he said. “As activity is curtailed, it could be a generational loss if this goes on for years, as young talent chooses not to come to the U.S. or is poached by competitors. Does it open the door for China to simply recruit all of the young talent to its own universities?

Hart said the economic impact from federal funding cuts is already being felt at ISU.

“I know here at Iowa State, we have seen several large federal grants that have disappeared, and you’re talking about an immediate economic impact from that with Iowa State basically being the largest employer here in Story County. So you have your largest employer under stress, and let’s say, within college towns, college counties, if you will, those colleges, those universities, tend to be the driving employer for those areas. But to me, I’m more worried about the long-run ramifications.”

The longer-term impact could be a loss of technological innovation, Hart said.

“The idea that when you think about that R&D that is done at either government institutions or research universities, that tends to be more basic research that helps develop the advanced technology that we have built our lives upon, and that without that basic research, you don’t get those applied steps further down the road, or at least they’re much delayed as we look in time,” he said. “That’s something that I would argue the U.S. has definitely relied upon to become the growth economy, and the largest economy in the world that we have grown to be is because we have invested so much in that basic research to develop our STEM technology to allow our businesses to flourish.”

Business tips
Looking ahead, panelists offered tips for businesses.

Kappen said directional accuracy and scenario planning can be a big help for businesses when thinking through the next few years. Watching industry-specific macro trends can also be helpful, as is building a resilient team.

“I think we are all going to need to invest in building resilient teams, and that means relying on your culture and trust and transparency,” Kappen said. “In part, leaders are going to have to admit that there is uncertainty, that truth might be hard from time to time, but providing leadership and space for the entire team to problem solve, think of innovative ideas, think of alternatives as the world unfolds before us. I think it’s going to require some bold and confident leadership that still provides teams enough freedom to innovate and provide solutions to the problems that we will need to solve over the next couple of years.”

Hart suggested focusing on what can be controlled. When policies change and create uncertainty in agriculture, Hart tells farmers to focus on the day-to-day business of their farm operations.

“We need to concentrate on the things that we can control, that we can have influence on,” he said. “And as long as we’re doing that, typically, that helps create a buffer from the uncertainties we see outside of our control. And so it is working, for example, to look at the core business, look at that and establish, are we doing things as efficiently as we possibly can, and again, possibly reevaluating, if you will, where we might source things, how we might find other ways to do what we’re doing today. So being innovative and exploring opportunities while still, if you will, focusing on what is the main thing we do in our business.

Villamil emphasized staying positive.

“I think something to remember is that fluctuations happen in economies, so the knowledge that we will get through this is important,” she said.