By Tom Still
MADISON – A new report suggests Wisconsin is slowly making progress when it comes to building a technology-based economy, as judged by indicators such as producing patents, investing in private research and development, and creating high-tech jobs. The natural question: Why are we improving?

There is no single reason, but a variety of factors promise more progress – provided we’re not swamped in a sea of global competition.

The report, commissioned by the Wisconsin Technology Council, was a three-year check-up on economic categories first measured in 2002 for “Vision 2020: A Model Wisconsin Economy.” The Madison-based firm of NorthStar Economics concluded the following:

In 2001, 3.8 percent of state workers were in the technology sector versus 4.5 percent nationally. By 2004 that gap had narrowed, with 4.3 percent of Wisconsin workers in high-tech jobs versus 4.9 percent nationally.

In 1998, Wisconsin ranked 16th in the nation in producing all types of patents per 10,000 people. By 2001, it had risen to 13th among the 50 states. Although later figures are not fully available, the trend line appears to be continuing.

Wisconsin also ranks among the top 20 states when it comes to private sector R&D capital spent per capita. About $3.6 billion was invested in private R&D in 2002, the last year for which complete data is available. That does not include academic R&D, where Wisconsin ranks 13th in the nation.

Earlier this year, the Tech Council released a report on educational indicators that showed similar progress in the percentage of adults with four-year college degrees (behind the U.S. average but closing the gap) and the percentage of adults with two-year college degrees (well ahead of the national average).

Here are my Top 10 reasons – in no particular order — why Wisconsin is showing progress:

  1. The tax climate for investing has improved. The Wisconsin Legislature and Gov. Jim Doyle have combined to create tax credits for technology start-ups and invested in other grant and loan funds.
  2. The workforce is being retrained. A surge of returning students, many of whom are adults squeezed out of manufacturing jobs, is evident in public and private institutions. The rise of private, for-profit post-secondary schools is serving the needs of older, returning students.
  3. There is more coordination. Five years ago, Wisconsin’s tech development efforts seemed disjointed. Today, major players are largely cooperating to build investment and human capital.
  4. Manufacturing became high-tech in order to survive. It’s true that Wisconsin has lost thousands of manufacturing jobs, but it has retained thousands more because companies became more innovative. That transition has helped to drive private R&D spending.
  5. Wisconsin is finally leveraging its location instead of fighting it. Yes, Wisconsin is still a “flyover” state so far as many East and West coast investors are concerned, but the emergence of the I-Q Corridor between Chicago and the Twin Cities has helped draw attention to Wisconsin’s assets.
  6. We’re finally on the map. A series of national news stories have focused on Wisconsin’s academic R&D, its technology transfer process, its emerging companies and its overall quality of life. The state is being noticed by tech watchers elsewhere.
  7. By and large, the politics are positive. Democrats and Republicans alike have contributed to policy initiatives to drive the state’s tech economy.
  8. Tech companies are no longer “waiting for Godot.” The harsh truth is that relatively few emerging firms are candidates for venture capital, especially from the coasts. But they can attract angel capital, grants and other forms of start-up financing. Wisconsin is getting better at bootstrapping.
  9. Our research infrastructure creates job. While other states scramble to create a technology research base, Wisconsin has built its foundation over a century or more. Few, if any, states of Wisconsin’s size can claim as much academic research.
  10. Our entrepreneurial spirit has been reawakened. History shows Wisconsin has been an entrepreneurial state for much of its existence; necessity is bringing out those qualities again. Innovation wasn’t dead in Wisconsin, just hibernating.

 It will be a while before Wisconsin can count itself among the major technology states, but the trends are solid for now. Let’s hope we continue to improve as fast, or faster, than the rest of the world.