Agriculture, manufacturing and tourism are the “Holy Trinity” of the Wisconsin economy and may always be so, given the state’s tradition of excellence in all three sectors.
Technology increasingly drives each of those sectors, however, and is slowly building an impressive standing of its own in terms of the jobs and value it adds to the Wisconsin economy. Several recent reports make the case:
- An advance version of the “Cyberstates” report from CompTIA, the nation’s largest leading tech association, showed Wisconsin cracking the 100,000-job barrier in 2016 for the first time. The report, which draws upon a mix of public and private data, counted 101,542 state tech workers last year compared with 97,633 in 2015.
There are two elements to what constitutes a “tech worker” under Cyberstates. It includes all jobs within companies that are primarily tech businesses, as well as technology specialists found in other fields — including agriculture, manufacturing and tourism. In Wisconsin, the leading categories of tech workers are computer systems analysts, software developers, software applications and computer-controlled machine tool operators. Read the full Journal Sentinel article here.
The Cyberstates report does not include workers in the life sciences, such as biotechnology and medical devices. That’s another 30,000 or so Wisconsin workers, depending on how they are counted.
Tech workers earned an average of $79,500 in 2016, according to the preliminary Cyberstates report, a figure that was 74% higher than Wisconsin’s overall average wage.
- The BioEnterprise Midwest Healthcare Growth Capital Report ranked Wisconsin fifth among 13 states or metropolitan regions in terms of dollars invested in young health-care companies in 2016, and fourth in the total number of companies receiving such investments.
The leaders were Minnesota with 88 investments worth $422.4 million; Chicago with 38 investments and $323.7 million; St. Louis at 27 investments and $241.9 million; Cleveland with 46 investments and $197.8 million; Wisconsin with 36 companies and $118.7 million; and Pittsburgh with 28 companies and $86.6 million.
Indianapolis, West Lafayette, Ind., Louisville, Ky., Detroit-Ann Arbor, Kansas City, Cincinnati and Columbus, Ohio, all showed less than $75 million each in health-care investments.
The report by Cleveland-based BioEnterprise covers medical devices, biotechnology, pharmaceutical and health-care information technology investments, primarily angel and venture capital. It relies on data collected from a variety of sources, including the Wisconsin Technology Council.
- A report for the Wisconsin Economic Development Corp. showed some encouraging trends overall for “deal flow” in the state. Using data from Pitchbook, an investment research firm, the WEDC gave a year-end snapshot for 2016 that showed total dollars invested in Wisconsin companies at $261.7 million, up about $7.4 million from 2015.
That’s a relatively small increase but it’s certain to grow from the snapshot figures because the report did not capture most angel investments. Those will be included in the annual “Wisconsin Portfolio” report by the Tech Council later this year. Last year, that report captured 128 total deals — angel and venture — and also cataloged other investment characteristics.
Even without additional data, the early trend lines are worth noting. Average investment size doubled, which means more companies may be crossing the feared “valley of death” that separates seed investments and Series A investments that come later in a company’s life cycle. Nationally, as well as in Wisconsin, those later investments are often the hardest to find.
The total number of Wisconsin deals closed in 2016 was more than 12 times the number closed in 2001, Pitchbook reported, and nearly five times the capital was invested in 2016 as was put to work in 2001.
- A report issued last month by the Tech Council reported on the latest “State Technology and Science Index” components from the Milken Institute, a national research group that studies 79 specific indicators within five larger categories every two years.
While Wisconsin didn’t crack into the top 10 in any of five major Milken groupings for 2016, it ranked between 17th and 38th in all five.
Building a more diverse, tech-based economy will reinforce Wisconsin’s traditional industries and create new clusters of excellence over time. It’s also essential to attracting and retaining the right workforce at a time when Wisconsin needs more talented workers of all descriptions.
Don’t expect the state economy’s Big Three to be displaced anytime soon, but the steady growth of the tech sector cannot be overlooked.