By Tom Still
MADISON – It’s a sore thumb that refuses to heal: Wisconsin ranks among the nation’s bottom-feeders when it comes to business start-ups.
That has been true in good times and bad, under Republican governors and Democratic governors. Almost no one can remember a time – unless you stretch back to the 1950s or ‘60s – that Wisconsin was a leader in launching new companies.
So it wasn’t much of a surprise when the 2015 Competitive Benchmarks report, unveiled Dec. 9 at the Future Wisconsin Economic Summit, repeated the news that Wisconsin is 50th out of 50 states in total business startups. That number comes from the Ewing Marion Kaufmann Foundation in Kansas City, which released its annual index on entrepreneurial activity last summer.
Yes, there are flaw in how Kauffman measures start-ups. Yes, Wisconsin’s low immigration rate and high reliance on capital-intensive industries such as manufacturing and agriculture isn’t compatible with starting companies that must run lean for years. And, yes, Wisconsin does better with certain categories of startups, such as technology companies.
The fact remains that Wisconsin has ranked in the bottom fifth of the Kauffman report for years for two major reasons: The culture of entrepreneurism is yet to become imbedded in all corners of the state, despite some recent progress, and government policies either stand in the way or don’t offer enough help.
The latest December “Best Performing Cities” report from the California-based Milken Institute helps to tell the story. In its 2015 rankings, Madison ranked 20th overall – up 10 spots from the previous year. It was the highest-ranking Midwestern city, just one notch ahead of Grand Rapids, Mich., and ahead of some cities that get a lot of ink for their startup scenes, such as Boulder, Colo., Ann Arbor, Mich., Columbus, Ohio and Des Moines, Iowa.
Green Bay jumped to 104th in the large city rankings – up 26 places – and Milwaukee-Waukesha-West Allis fell to 164th, largely because short-term job growth was weak.
Among the nation’s small cities, Janesville-Beloit ranked an impressive fourth, up from 41st the previous year. That provides the latest evidence that Rock County is overcoming the loss of General Motors and creating an environment where young companies can thrive. The Milken report noted that data processing, machinery manufacturing and business automation are leading the way in the Janesville-Beloit region.
Fond du Lac (37th), Sheboygan (68th), Eau Claire (101st), Appleton (102nd), Oshkosh-Neenah (105th), La Crosse-Onalaska (118th), Wausau (119th) and Racine (158th) also showed up in the Milken report, which examined factors ranging from job creation to wage growth to high-tech intensity.
Rankings are subjective in many ways, but the Milken report demonstrates that cities are putting in the effort to grow, attract and retain young businesses are outperforming their neighbors. That’s still not the case in every Wisconsin community.
State and local government policies don’t always help in that regard. There is still too much Milwaukee-versus-Madison nonsense coloring Wisconsin, and even some Milwaukee and Madison-versus-everyone else tension, too. If a job is created in Madison, Milwaukee or Minocqua, it should all accrue to the state’s bottom line, both in the sense of economic activity and tax generation.
“At the end of the day, they’re all Wisconsin jobs,” said Zach Brandon, president of the Greater Madison Chamber of Commerce. “If Milwaukee suffers, the state suffers, so I root for them to succeed, too.”
Some progress has been made: State government has enacted strong investor tax credits, seeded the statewide Badger Fund of Funds, endorsed or backed services that help startups and worked with likely clusters. Those have helped Wisconsin achieve a much-higher company survival rate. But there’s still an imbalance of resources and effort that shows in rankings that place Wisconsin near or at the bottom in startups.
As the Future Wisconsin event and the related Wisconsin Perception Survey demonstrated, the state has a long list of attributes that make it a good place for companies to grow. What’s missing is more focus on those strengths and a commitment to put aside regional and political differences so all communities can prosper.