A recent Wisconsin Taxpayers Alliance study confirmed that Wisconsin lost more jobs than it gained over the past decade, but there’s cause for hope in economic sectors that are sources of young, high-growth companies.
Here are 10 trends shaping the future of Wisconsin’s tech-based economy:
Campus entrepreneurism: A decade ago, it was difficult to find organized entrepreneurial education programs on Wisconsin campuses. Today, such programs are relatively widespread and popular.
Hacker spaces: These eclectic gathering places attract tinkerers, techies and curious students – but they’re also becoming shared working spaces for entrepreneurs. These locations offer opportunities for engineers, artists and prototype designers.
Regional research hubs: R&D was once the province of a few major academic centers in Wisconsin. However, research clusters on other campuses have risen over the past decade. That showed in a recent competitive grant process that led to $23.5 million in state awards for a dozen University of Wisconsin System projects.
Talent spinoffs: Verona-based Epic Systems is the “gold standard” when it comes to electronic health records, and it continues to grow sharply in revenues and employees. It also loses talented workers from time to time, and many would prefer to stay in Wisconsin. That’s one reason health information technology is a promising cluster here.
The rise of research parks: When University Research Park in Madison was founded in 1984, it was seen as an off-campus outpost for science faculty pursuing the impure goal of commercializing their ideas. Today, URP is home to about 125 companies and nearly 4,000 highly paid workers. URP will double in size over time, even as other high quality parks come on line.
Big company interest in emerging firms: Not so long ago many corporate CEOs thought “entrepreneur” was French for “unemployed dreamer.” Today, some of Wisconsin’s iconic companies see young companies as potential R&D sources, suppliers, acquisition targets, investment possibilities and innovators. That trend may continue as companies look for outsourcing opportunities in their own backyards.
Startup accelerators: Tech-based accelerators were born on the West Coast, where groups invested in a small number of carefully selected companies and put them on a crash course to growth. While there’s always a chance the “accelerator bubble” could burst, Wisconsin has some top-notch accelerators on the scene.
The information technology boom: Investors are flocking to companies engaged in health IT and other software, gaming, mobile platforms, cybersecurity and more. Investors outside of Wisconsin are taking note, and it’s no accident that major companies such as Google, Microsoft, Red Hat, IBM, HP and Intel all have a presence here.
New funding sources: Wisconsin’s angel investing metrics have grown steadily over a decade, for reasons ranging from state tax credits for investors to a statewide networking and deal-flow structure. The venture capital landscape has been less developed, but that may change with four new funds in various stages of formation. Crowdfunding may help, too, after the rules for equity investments in startups shake out.
Globalization: Wisconsin’s exports continue to rise, and tech-based companies are beginning to crack into those markets. Foreign direct investment is also a factor as investors abroad look for companies, ideas and people. “In-sourcing” isn’t a stampede yet, but it is coming.
Manufacturing, agriculture and tourism may always define Wisconsin, but companies in emerging sectors will drive more than their share of growth.