It’s easy to forget, especially if you live there, that the Madison area has a lot going on when it comes to competing in the knowledge-based economy.
Recent reminders were: The descent of thousands of customers on Epic Systems, the electronic health records giant that commands the lion’s share of the U.S. market; the techy theme at the annual meeting of the Greater Madison Chamber of Commerce; a UW-Madison campus session on how the $2.6 billion Wisconsin Alumni Research Foundation will spark more entrepreneurial activity; and a spate of news about company breakthroughs, grants and investments.
That’s pretty much within a week or so. Community leaders in other cities, including many cities much larger, wish they could see that much momentum in a month.
One such community is Milwaukee, where the seeds of a tech-based economy still need a fair amount of tending.
That was the overall message at a recent meeting of the Public Policy Forum of Milwaukee, where the 104-year-old independent think tank raised the curtain on a report that examined how southeast Wisconsin is performing when it comes to building a knowledge-based economy.
The report concluded the four-county metro region has made progress in strengthening its pool of educated workers and in adding scientists, engineers and other tech workers. However, the region continues to struggle compared to similar-sized metropolitan areas when other indicators are measured.
“Our analysis finds that our region has been losing more businesses than it’s creating, and that we’re lagging peer cities when it comes to entrepreneurship and capital formation,” said Joe Peterangelo, the report’s lead author. “These discouraging trends are countered, however, by a growing number of college graduates and an increased number of science and technology workers in our regional workforce.”
The report on “Cultivating Innovation” looked at 20 indicators related to building a knowledge-based workforce, transferring ideas to the marketplace, creating businesses and encouraging entrepreneurs, and attracting the financial resources needed to help companies grow. It compared southeast Wisconsin to other regions. Some key findings:
- Educational attainment is rising and the region’s workforce ranks high among its peers. That’s due in large part to the presence of more than 20 colleges and universities in the region or a short drive away.
- Between 2004 and 2014, more businesses closed in the four-county region than were opened. “In addition,” the report noted, “metro Milwaukee’s rate of business survival does not appear to make up for the sluggish pace of business creation.”
- Federal grants and federally guaranteed loans for business startups, expansions and research activities have declined at a faster rate in Milwaukee than nationally.
- Milwaukee underperforms almost all peer regions in attracting venture capital. That finding is supported by a separate Tech Council report, “The Wisconsin Portfolio,” which tracked 136 angel and venture capital deals statewide in 2016. Of 136 such deals, 80 were in the Madison area (58.4 percent of the total) versus 38 in southeast Wisconsin (27.7 percent).
During a panel discussion on the report, I noted the region’s progress but added it needs “three Cs” to grow: Culture, capital and connectivity. In some cities, the culture of entrepreneurism is deeply rooted and capital is drawn to the best ideas, technology and teams. Stronger connections between industry, academia, government and entrepreneurs themselves help create that chemistry.
It didn’t take long for the discussion to get around to the Foxconn Technology Group and its now-revealed plans to build a massive liquid crystal display plant in Racine County.
While the study didn’t analyze the Foxconn factor directly, Peterangelo noted the company’s presence can’t help but boost startup and supply chain activity – so long as the region continues to work on its other challenges.
Milwaukee isn’t Madison and shouldn’t try to be, given its very different history, culture and industrial foundations. However, it’s important that Milwaukee continues to blaze its own path, as the Wisconsin economy still depends in large part on a healthy southeast corner.
Tom Still is president of the Wisconsin Technology Council.