Metro Milwaukee continues to fall behind peer metros when it comes to attracting venture capital investment and creating new businesses, according to a recently released Wisconsin Policy Forum report.
Despite these challenges, metro Milwaukee continues to show strength in its concentration of knowledge workers and its growth in household income.
The Wisconsin Policy Forum has updated its Innovation Data Tool, which was created to gauge the Milwaukee metro area’s performance in several categories often linked to innovation. Those categories include venture capital (VC) funding, educational attainment, startups and small business development, and more. The Innovation Data Tool also provides data on 10 other peer metro areas.
The Wisconsin Policy Forum found that metro Milwaukee received less venture capital investment in 2023 than in 2022, but the 2023 total was higher than all previous years going back to 2015.
Milwaukee attracted the lowest amount of venture capital funding, $76.9 million in 2023, compared to all 11 comparison metros. Ranking first in venture capital investment is Austin, which attracted a total of $5.2 billion between 2021 and 2023.
“There is an ongoing weakness of metro Milwaukee’s innovation economy,” according to the report.
The number of small businesses being created in metro Milwaukee is also slow compared to peer metros.
Between 2012 and 2022, the number of “micro businesses,” companies in the Milwaukee area with between one and nine employees, increased by 4.5% to 26,779. This places metro Milwaukee in ninth place.
Austin saw a 49.1% increase in micro businesses while Portland and Indianapolis saw a 14.5% increase and 12.2% change respectively.
Milwaukee’s total employment increased steadily between 2010 and 2019 before losing virtually all of those gains in 2020 due to the COVID-19 pandemic. The region has seen improvements every year since 2020, but total employment remains below 2016 levels (820,600 workers). In 2023, metro Milwaukee recorded 813,400 workers.
The city has added jobs at a “much slower pace” than the national average since 2013, according to the report. By comparison, top-ranked Austin has seen a 47.7% change in total employment numbers between 2013 and 2023.
“The region’s job losses may be partially explained by a recent decline in its working age population (those ages 15 to 64), which fell by 3.7% between 2016 and 2023,” according to the report.
The Wisconsin Policy Forum report found that metro Milwaukee is in the middle of the pack when it comes to the amount of workers employed in the technology sector. For every 1,000 working-age adults in Milwaukee, approximately 27.6 have tech-related jobs. Austin is ranked first (55.3) with Portland comes in second place (37.9).
A strength for metro Milwaukee is its number of scientists and engineers. There are approximately 13.8 scientists and engineers per 1,000 working-age adults in the region. Only Austin and Minneapolis ranked higher with averages of 19.5 and 17.9 respectively.
Metro Milwaukee ranked last in GDP growth between 2012 and 2022 with a total of $120.6 billion. While that total represents a 37.9% increase between 2012 and 2022, it still severely lags Austin, which recorded a 121.1% increase.
When it comes to changes in household income, Milwaukee ranked seventh out of the 11 comparison metros.
Between 2013 and 2023, metro Milwaukee’s household income increased 13.3% to $77,006. This means the region has roughly kept pace with the average national increase of about 13.7%. Once again, Austin saw the largest increase of 22.7% to $98,508.
“Promising income growth emerged in metro Milwaukee in 2023 after the region struggled in this area in previous years,” reads the report. “It resulted in metro Milwaukee reaching the fourth fastest growth rate among our 11 comparison metros between 2013 and 2023.”
