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Aug 30, 201611:10 AMInside Wisconsin

with Tom Still

Here’s a five-point plan for improving Wisconsin’s startup economy

(page 1 of 2)

There is no shortage of explanations for why Wisconsin routinely shows up at the bottom of the Kauffman Foundation’s business startup rankings, the latest of which pegged the state 25th among the nation’s 25 largest states.

Those reasons include demographics (an aging workforce and low immigration rates); a capital-intense business core (manufacturing and agriculture) that is hard to crack for most entrepreneurs; a below-average share of adults with higher education degrees; and nagging social and economic problems in Milwaukee, the state’s largest city.

The “Okay … but” arguments are also pretty well known: Wisconsin companies survive longer than the U.S. average once launched. Also, there’s no crisis for most workers. The state’s unemployment rate is well under the national average. It’s usually easier to keep the job you have than make one for yourself.

Those roots causes haven’t changed much in decades and more probing isn’t necessary. What’s needed is a plan to do something about it.

Here is a summary of ideas drawn from policy reports by the Wisconsin Technology Council, which routinely examines the state’s tech-based economy and high-growth entrepreneurism with an eye toward advising policymakers. 

Rethink non-compete employment agreements. Most entrepreneurs have prior industry experience they can leverage to create or join a new company. Employee non-compete agreements disrupt entrepreneurship by erecting barriers to the free movement of talent.

California has never enforced non-compete clauses in contracts and it’s often cited as a reason why the Silicon Valley is as vibrant as it is today. A bill that died in a past session of the Wisconsin Legislature would have actually toughened the state’s non-compete law, a step in the wrong direction.

Reduce “fence-me-in” occupational licensing. Nearly one-third of American workers are required to have a government-issued license to do their jobs and Wisconsin is no exception. Occupational licenses can act as a barrier to entrepreneurs.

It’s time to revisit licenses that hamper competition and small business creation. Consumers can often be protected just as well by certification and registration standards that don’t fence out new entrants to the marketplace.

Reinvest in higher education. Study after study concludes that entrepreneurial rates are higher around university and college campuses, not only for faculty and staff engaged in research but for students. Wisconsin is no exception to the rule.

Those same campuses produce the talent so desperately needed in Wisconsin’s workforce, which is flattening out in sheer numbers. There’s room for more efficiency in higher education, but it’s also an asset that cannot be allowed to wither away.

(Continued)

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About This Blog

Tom Still is president of the Wisconsin Technology Council. He is the former associate editor of the Wisconsin State Journal.

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