Strategy & Alliance Building: Reports Offer Two Visions for Wisconsin's Economy

Two recent reports from Wisconsin economic development organizations suggest different paths for the state's economic initiatives. A white paper from the Wisconsin Technology Council (WTC) lays out a plan to increase access to capital for Wisconsin entrepreneurs, create new workforce development strategies, improve the state's infrastructure and business climate, and implement technology development and transfer strategies. Another report calls for greater coordination and streamlining of Wisconsin's existing programs through the creation of two new entities with a statewide reach. Both papers include extensive recommendations for the state's efforts to make capital available to startup businesses.

In Looking to the Future: A Case for Bold Action, WTC proposes a policy agenda for the next year that could help augment current initiatives, such as the Act 255 investor tax credits (now called "Accelerate Wisconsin"). The report includes several options for state leaders to consider in the broad areas of capital access, workforce development, infrastructure and technology transfer.

Particular attention is paid to the state's capital access strategy. In order to attract capital from the coasts and entice out-of-state firms to open offices in Wisconsin, the paper recommends creating a fund-of-funds that could invest in a diversified portfolio of venture firms. Credit Suisse is currently working with the state to develop a fund-of-funds using both public and private money, backed by state tax credits. The report also suggests expanding the state's angel investor tax credits and making those credits refundable. Refundable credits would be available to out-of-state investors who do not pay Wisconsin income tax. Other capital access recommendations include a new venture network to connect companies and venture firms, dedicated state funding for the Wisconsin Angel Network and changes in the state R&D tax credits so that they are available to early stage tech companies without a tax liability.

Some of the other proposals in the report include:

• Support the efforts of the State Superintendent's Entrepreneurship Task Force to institute a K-12 entrepreneurial literacy curriculum;
• Introduce loan forgiveness for Wisconsin students pursuing careers in STEM-related fields;
• Sustain the state's investment in tech-based economy initiatives, such as investor tax credits and R&D infrastructure projects;
• Promote Wisconsin as a "farm-shoring" location for tech-based companies;
• Build the proposed $150 million University of Wisconsin-Milwaukee engineering campus and research park in Wausatosa; and,
• Create Emerging Technology Centers around specific centers of excellence in the UW system.

Read Looking to the Future: A Case for Bold Action at: http://www.wisconsintechnologycouncil.com/uploads/WTC_WhitePapers%20FINAL%20Web.pdf.

The second report, commissioned by the Wisconsin Economic Development Association (WEDA), Competitive Wisconsin Inc. and the Wisconsin Counties Association, suggests that Wisconsin create a new quasi-public entity to oversee its economic strategy to remain competitive. Be Bold Wisconsin: The Wisconsin Competitiveness Study cites evidence that the state has neglected opportunities to compete economically with other states. In the past decade, Wisconsin's per capita income has fallen from 20th to 27th among U.S. states. Between June 2009 and June 2010, Wisconsin non-farm employment fell by 0.7 percent, lower than any other Midwestern state. The authors attribute this decline, in part, to the state's lack of a coordinated, sustained economic development strategy.

A survey of WEDA members at the February 2010 Governor's Conference on Economic Development indicates that this view has support among Wisconsin's economic development leaders. When asked how successful they thought the state had been in economic development, 33.3 percent of the attendees said that the state had been "somewhat successful", another 33.3 percent said the state had been "somewhat unsuccessful", and 20.2 percent said it had been "neither successful nor unsuccessful." When asked what kind of organization or organizations should be the primary driver of the state's economic development, the most popular responses were a "centralized, state-led agency covering the entire state" with 27.3 percent, and "regional economic development groups" with 26.3 percent.

In order to fulfill the need for both statewide coordination and regional relevance, the report recommends the creation of two new agencies. A statewide organization, with the proposed name of Accelerate Wisconsin, would help develop and implement a comprehensive development strategy and manage the state's economic development incentives. This quasi-public entity would coordinate the state's jobs initiatives, its efforts to match strategy with the needs of industry, its marketing initiatives and its business assistance programs.

The report also suggests the creation of a second organization, Wisconsin Pioneers, to administer the state's innovation initiatives. Wisconsin Pioneers would focus on providing high-tech entrepreneurs with greater access to capital through a statewide network of Regional Innovation Centers. The authors say this new nonprofit organization would streamline the state's outreach to innovative companies by serving as the chief vehicle by which the state invests directly in companies and in Wisconsin venture firms.

Read Be Bold Wisconsin: The Wisconsin Competitiveness Study at: http://www.newmarkkf.com/Uploads/FileManager/In%20the%20News/Wisconsin%20Competitiveness%20Study.pdf.