Partnerships can seize the day

The Milwaukee 7/University of Wisconsin-Milwaukee Fresh Water Institute is a successful case study in the making.

For those who were interested in my last post, you should look at the just-released U.S. Department of Commerce report “Clean Energy: An Exporter’s Guide to China” (http://www.ita.doc.gov/media/Publications/pdf/china-clean-energy2008.pdf). It’s a 104-page analysis of the opportunities and challenges of the Chinese clean technology market.

To summarize; the report looks at the Chinese economy and current clean technology efforts and programs in terms of opportunities for U.S. solution providers. There is a rather succinct summarization of the challenges China presents which, “… include lack of a transparent and consistent body of laws and regulations, lack of a supervisory mechanism for renewable energy implementation, customs regulations and a phasing out of favorable tariffs for foreign investment, and restrictions on foreign direct investment that include bio-fuels manufacturing. Lack of transparency in government procurement, including instances of corruption, can also present challenges as well as intellectual property rights and contract enforcement. Finally, other considerations like understanding Chinese business culture, identifying local partners, and building good government relationships are also important non-policy related barriers that must be considered.”

For small and medium-sized business entities (SME), overcoming these challenges on an individual basis can be daunting and expensive. Pooling resources and efforts by group or industry makes more sense and is why initiatives like the Milwaukee 7/UWM Fresh Water Institute are important.

Linking business expertise, government support and educational assets are the proven keys to developing and maintaining leading edge information industries, as the computer and biotech industries have shown. The Fresh Water Institute, with local, state and federal financial and political support, could take advantage of our existing regional technology expertise in process design and engineering and build on it by engaging our educational assets to stay at the forefront of the market.

The expertise developed over the years as rust belt industries were forced to be more efficient as well as comply with stricter environmental rules should be considered an investment which is about to yield dividends.

Our expertise is valuable and can be sold on the international market to emerging economies like China and India that have run out of options.

Generally, when I see the kind of verbiage just written, my reaction is “jingoistic gibberish,” but in this case, since we have an established edge in this area, it makes sense to maintain and build on that competitive advantage by putting in place the technical research infrastructure that will fuel existing businesses and create new ones.

It is energizing to see the efforts of the Milwaukee 7 as it gathers support for this idea. The next step is to get our products and services in place so the case is clear for why and how we should support this effort. Look at earnings regionally and nationally, and you will see a clear, consistent pattern – companies that are making money are selling overseas.

To make this work the government has to be part of the partnership and invest in the development of world-class research facilities and academic talent. The return will be a world class economic sector with favorable economic multipliers.

For years, we eked out efficiencies in our manufacturing processes and complied with changing environmental requirements. It resulted in a large body of proven process engineering machinery and services strategically positioned for sale to economies like China and India.

Entry and positioning in these markets is highly competitive, as each region and country seeks to sell equipment and services. For example, the Germans help their industries sell product and services by providing low-cost financing through government-backed lending agencies, creating goodwill and business opportunities through social investment programs and organized business support organizations.

We should be looking at what the competition is doing and take it to the next step. The Fresh Water Institute could serve as a focal point for one of our strong suits and allow our companies to focus on delivering solutions instead of overcoming market entry barriers. A weak dollar has created an opportunity which we should be following up on.

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