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Oct 13, 201410:37 AMInside Wisconsin

with Tom Still

Solving Wisconsin’s startup puzzle — one piece at a time

(page 1 of 2)

During his “Rise of the Rest” tour stop in Madison, venture capitalist and AOL.com founder Steve Case said Wisconsin’s capital city would rank among the top 20 communities for startups in the United States — “barely” — and if entrepreneurs continue to work hard, it could be among the top 10 within a decade.

While that’s encouraging news for a city such as Madison, which has been working on its tech-based startup culture for 35 years, what does it mean for other communities in Wisconsin that are just heading down the path toward building an entrepreneurial foundation?

For most cities in Wisconsin, that notion can be daunting. They don’t have 35 years to create an ecosystem to support emerging companies. They need to show progress soon if not now. Is that possible?

The answer is a qualified “yes,” but some core characteristics about Wisconsin and its long-term strategy for economic growth will need to change.

Let’s start with Milwaukee, which is roughly where Madison stood on the tech-based development continuum 10 years ago. Milwaukee can point to a solid higher education base, academic research strengths and, most important, a number of major companies that have a stake in technology and innovation. The list includes GE Healthcare, Rockwell Automation, Johnson Controls, and many more.

Until recently, however, it lacked enough homegrown resources for entrepreneurs to make a difference. That is changing with accelerators such as gener8tor (which also has a big presence in Madison), BizStarts Milwaukee, Startup Milwaukee, Scale-Up Milwaukee, and the UW-Milwaukee Research Foundation. The latter four were featured Oct. 9 at a meeting of our own Wisconsin Innovation Network, which meets regularly in Milwaukee.

Milwaukee is also getting its arms around what it’s good at doing and what it’s not. The energy, power, and controls sector is a regional strength, and so are water technology and advanced manufacturing. Life sciences research and company formation in that sector are on the rise, and the city’s Third Ward is a hotbed for software and information technology. It may not be one of Steve Case’s top 20 cities — yet — but it has a good start that can be accelerated by partnerships that will involve some forward-looking major companies.

So why does Wisconsin still trail in most 50-state comparisons of business startups? There are a number of possible explanations.

Demographics in general don’t work in Wisconsin’s favor in terms of business startups. The state’s population skews slightly older and attracts relatively few immigrants, who are much more likely to start a business than native-born Americans. Mom-and-pop businesses, often in service or retail, account for the bulk of all startups — even if they are not high-growth businesses that create a lot of jobs.

Wisconsin’s relatively low unemployment rates also work against more people here starting a business. If you already have a job, you’re statistically less likely to quit and create your own.

(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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