A new role for the WEDC

Of late some mud has been slung at the newly formed Wisconsin Economic Development Corporation (WEDC). Much of it deserved. The agency discovered it had failed to track nearly $9 million in loans that are not current, the chief financial officer resigned and Governor Walker brought in a new interim leader while suggesting he would be discussing a series of dramatic moves with the board. WEDC will seek new leadership in a national search as Paul Jadin, former WEDC CEO, jumped ship to run Thrive, the economic development partnership for the Madison area.

This said, Wisconsin is uniquely positioned to set an example for the nation by creating a fair and attractive environment for new and expanding business. First we must place our efforts where our mouth is. Our governor has announced that the game is on with his “Open For Business” campaign, but when new companies come to play, they find that the actual game plan needs work. Here are five things I believe we must do better in order to attract new business and grow our existing ones, and in spite of the tarnished image, WEDC could play a huge role.

Build a fair and level system for distributing grants, tax breaks, loans and other ED incentives
Wisconsin does not have a clear set of rules for the distribution of state and federal grant or loan dollars and tax incentives for new and growing businesses. When a new business comes to the state the local ED professionals are not sure what they can offer as an incentive. The end result often depends on who you know as much as what Wisconsin has to offer. WEDC needs to establish a set of rules or guidelines to make our investments fair for all and understood by all the players in the game.

Reed Hall the new interim CEO of the WEDC suggests, “My goal is to take inventory of the issues confronting the agency and to take immediate action to correct problems.”

There are some rules in place, a community has Tax Incremental Financing for example, if your building is worth X dollars, we can invest this amount – if you locate where we need new businesses. The state and WEDC needs the same type of programs – if your create X new jobs, we can give you this, loan you this, or forgive this. On a personal note, I believe these incentives are just as important for existing business as for new ones.

We Need – Rules to play by.

Develop a tracking system for our investments in business based on outcomes
Wisconsin does not keep score, and recently we have seen more than a few flags tossed by the federal government for this infraction. The new WEDC needs to fix this, and soon. We need to track where our incentives are used and more importantly what happened with our investment. Imagine a bank that didn’t keep track of the money it lent out – never mind.

Governor Walker said, “Being a good steward of taxpayers’ money while helping people create jobs is my top priority. With that in mind, I will be discussing a series of dramatic moves with the board of the Wisconsin Economic Development Corp.”

This goes way beyond rhetoric, but it is not really that difficult to accomplish. We need an accounting system accessible to all involved. It does not have to be complex or complicated. We gave ABC Corp X dollars to create Y jobs — today ABC employees this many people and is paying its bills. Or not.

We Need – A scoreboard.

Work more closely with ED Professionals already in the field
Wisconsin has thousands of Economic Development Professionals across the state. From Chamber Execs, to City Planners, and from Regional Planning Commissions to Economic Development Corporations, not to mention the brokers, developers, contractors, and every elected official in the state. Then there is the state itself with not only WEDC but Commerce, PSC, Workforce Development, Agriculture, Tourism, UW, Tech Schools, DNR, the Administration and many others – each with their own set of players.

Reed Hall states, “We need to reinforce the good work being done by the WEDC team.”

I suggest that we need a bigger team. WEDC needs to empower all of these individuals to know what they can offer, how they can help, what are the resources, and how to move a plan forward as a team. In return, the local players can help WEDC with politics, developers and brokers, infrastructure issues, contracting, tracking businesses, and the hundreds of other details that WEDC does not have the resources to cover.

We Need – To use the whole team.

Better utilize the resources of our educational systems from K through PHD
One of Wisconsin’s greatest assets is the educational system we have in place. Business is screaming for technical expertise in the workplace. Some of our best trained employees are drafted by other states while others are missing very specific skill sets required by the employers. WEDC is perfectly positioned to deal with this.

“Higher education is part of the market system, so it should be transparent to help consumers make informed choices”, said Anthony Carnevale, director of the Georgetown University Center on Education and the Workforce in a presentation to the University of Wisconsin System Board of Regents. “It should tell you in the (course) catalog what’s most likely to happen to you when you graduate.”

WEDC could facilitate workplace apprenticeships for HS Juniors and Seniors, help move some of the state tech programs into the factory, help retain our graduates and work with business to suggest improvements for continuing education. In addition WEDC can partner with educational facilities to seek alternative funding and uses for our educational systems like the WARF program, innovation centers and research parks. WEDC does not need to do the work, they need to facilitate the opportunities.

We Need – Great coaches and training.

Encourage regional solutions to systems and infrastructure needed to support new and growing businesses
Wisconsin has another issue that WEDC can address. We do not have the incentives for units of government to work together to encourage business growth. We have individual police and fire departments, sewage treatment facilities, water distribution systems and other infrastructure. We know that when we combine or regionalize these systems, we see new efficiencies. The Madison area shares a waste treatment facility for example, and politics aside, it serves the communities well.

“One of the core purposes of government is to provide the framework for business to flourish,” said Bob Cook, executive director of the Transportation Development Association of Wisconsin.

Big business requires big infrastructure. WEDC can lobby for incentives that encourage communities to work together to create the systems needed. Towns with space could tap into cities with resources and revenues could be shared. Savings from working together could be reinvested in business development. Wisconsin’s shared revenue system could be regionalized with directives to work together or lose it.

We Need – The stadium.

Wisconsin is a great place to start and grow a business. We have outstanding resources. We have a excellent educational system. We have good people. WEDC has the potential to be a leader and advocate for these resources and the state or they can continue to try and do all the work and they will find themselves right back where they started.

I will use a sports analogy to sum up. Recently Wisconsin lost a quarterback. In a big game against Indiana they put in a new guy who had been with the team for five years but had very little playing time. Phillips was efficient with 52 rushing yards, a 2-yard touchdown pass and 41 total passing yards in executing a limited game plan, nothing spectacular — but the Badgers won the game 62 to 14 because they played like a team. WEDC can learn a great deal from Mr. Phillips. Now if Wisconsin can just beat Ohio State!

Ken Harwood is the editor of Wisconsin Development News in Verona and executive director at Lafayette Development Corp.

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