We’re 20!: A look ahead at the next two decades

Cover Story

Milwaukee was a very different place 20 years ago…

COV-Cover-Background-Carousel…and doing business was a drastically different experience in 1995, the year BizTimes Milwaukee was launched as Small Business Times.

Our civic landmarks were different in 1995. The old MECCA convention center was still in use (the Wisconsin Center was built in 1998, and its name has changed many times since). The Brewers still played at County Stadium (Miller Park opened in 2001). There was no brise-soleil at the end of Wisconsin Avenue (the Quadracci Pavilion at the Milwaukee Art Museum, designed by Santiago Calatrava, wasn’t completed until 2001). The first segment of the Milwaukee Riverwalk was just completed in 1994.

The places we shopped were different. Northridge Mall was still open on Milwaukee’s far northwest side in 1995. Bayshore in Glendale was still a mall, not a town center. We could still shop for groceries at Kohl’s Food Stores.

Milwaukee’s entertainment scene was different in 1995. Bo Black still ran Summerfest. The Pabst Theater was little used, other than the annual Christmas Carol shows. Potawatomi was just a bingo hall in Milwaukee, and Dairyland Greyhound Park in Kenosha and Lake Geneva Kennel Club in Delavan were both still operating dog tracks.

Different brands led the way in the Milwaukee area business community in 1995. Miller and Coors were competitors, not a joint venture. The tallest building was called the Firstar Center, not the U.S. Bank Center, and it was named after a Milwaukee-based bank. M&I Bank was still in business, based in Milwaukee. The region’s business travelers still flew on Midwest Express. Pabst brewery was still in operation in Milwaukee. Pabst Farms was still a farm in Oconomowoc.

We worked differently in 1995, which was the beginning of the dot-com boom. Amazon.com started in 1995. Microsoft released Windows 95 and Internet Explorer 1.0 that year. Yahoo.com and eBay.com came online in 1995.

Fax machines still rang and buzzed frequently in offices in 1995.

Our computers were larger (much heavier) in 1995 and laptops were far less common. Tablets were years away (the iPad was introduced in 2010). Nobody had a smartphone yet, and many of us didn’t have cell phones.

A gallon of gas cost $1.15 and a stamp cost 32 cents in 1995.

Considering how much has changed since 1995, what will it be like to live, work and play in Milwaukee 20 years from now, in 2035? Here are several issues and trends to keep an eye on:

The war for talent

As the huge baby boomer generation moves into retirement, the labor supply will tighten considerably. That means 20 years from now, the Milwaukee area will be in a fierce competition with other regions to attract the talent necessary to grow its economy.

“During the last 20 years, there has been an ample supply of workers in the area to support job growth,” said Kenneth Yunker, executive director of the Southeastern Wisconsin Regional Planning Commission. “The next generations are no larger than the baby boomers, so the size of the workforce isn’t going to grow. That’s going to make it hard to grow the economy. This area will be in an intense competition to attract labor force and grow jobs.”

It will be important for the Milwaukee area to offer a high quality of life to attract talent, said Tim Sheehy, president of the Metropolitan Milwaukee Association of Commerce. The MMAC pushed for construction of a new arena in downtown Milwaukee and is pushing for increased funding for Milwaukee’s cultural amenities to help attract talent to the region.

“We will make a big issue of the need to continue to invest in the assets that raise Milwaukee’s quality of place: culture, arts and parks,” Sheehy said. “They have been chronically underfunded. I think there is a direct tie between how people perceive the quality of place and our ability to attract talent, especially young, mobile talent.”

The tightening of the workforce should benefit talented workers.

“It’s going to be great to be a worker, particularly a skilled worker,” said MMAC senior vice president Steve Baas. “The laws of supply and demand will make you valuable to employers. That should be reflected in wages.”

The downtown Milwaukee renaissance

Downtown Milwaukee is experiencing a renaissance that should continue for years, with numerous apartment developments bringing an influx of new residents, a 17-story multi-tenant office building under construction, a 32-story office building under construction at the Northwestern Mutual corporate headquarters campus, new restaurants, several hotels planned or under construction, and the recently-approved plans for a new $500 million arena for the Milwaukee Bucks.

How will downtown Milwaukee look 20 years from now?

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Milwaukee has changed a lot in 20 years.

“I think you are going to see a couple of other large (office) towers, at a minimum, go up, and some mid-rise towers,” Department of City Development commissioner Rocky Marcoux said. “I think you will see a tremendous amount of new jobs downtown.”

That could include a new corporate office building for Johnson Controls Inc. The company is considering an office tower development near the lakefront, where it could build a 52-story building, according to real estate sources.

Milwaukee’s neighborhoods

The revitalization of downtown Milwaukee hopefully will spread into the surrounding neighborhoods. Some of the city’s neighborhoods have already seen impressive growth in recent years, and more could be on the way over the next 20.

Walker’s Point “will be what the Third Ward is now,” Marcoux said. The Inner Harbor area could be revitalized, similar to the Menomonee Valley, he said. Marquette University, MillerCoors, Harley-Davidson Inc. and others are collaborating to improve the near west side.

“You will see more growth in (all of) the neighborhoods (combined) than in downtown,” Marcoux said. “You’re going to see a whole new round of civic engagement in neighborhoods. The success of every neighborhood is important.”

The suburbs

Although downtown Milwaukee is attracting a lot of development activity, several major mixed-use developments are also under construction in some of the area’s suburban communities, including The Corridor and The Corners projects in Brookfield, The Mayfair Collection in Wauwatosa, Drexel Town Square in Oak Creek and White Stone Station in Menomonee Falls.

Many suburban communities, especially older, pedestrian-friendly suburbs, will continue to thrive, attracting not only families, but also more mixed-use development with apartments, said Robert Monnat, chief operating officer of Mandel Group.

“While there are a number of visionaries issuing declarations of the suburbs as ‘dying,’ they couldn’t be more wrong,” Monnat said. “In fact, suburbs, particularly older, sidewalk-oriented, traditional neighborhoods, are more lively than ever. While there will continue to be ongoing emphasis on urban redevelopment, there are equally appealing opportunities to introduce new residential opportunities in suburban locations where other conveniences can be accessed.”

The Fresh Coast

In recent years, Milwaukee-area government, academic and business leaders have pushed to promote and build upon the region’s strength in water technology businesses. The initiative is off to a good start. The Global Water Center building is full and its leaders plan to add a second building. Rexnord is moving its Zurn business to the Reed Street Yards. The University of Wisconsin-Milwaukee completed its $53 million School of Freshwater Sciences building in Walker’s Point.

By 2035, we will know if Milwaukee’s water technology initiative has paid off and is producing a significant number of new jobs for the region.

“Increasingly, Milwaukee is going to become even more of a water-centric city,” said Dean Amhaus, president and chief executive officer of The Water Council. “Everything is in place here.”

Where we work

Telecommuting, smart phones, the Internet and email have enabled people to work together even when they are not in the same place, and have allowed employees to get work done from anywhere. Over the next 20 years, employees will have even more flexibility in where they do their work.

“Physical location is not as important as it used to be,” Bass said. “People used to have to physically be in the same place to work together. Now, you can literally be anywhere in the world and work collaboratively.

How we get around

How we travel around Southeastern Wisconsin could change dramatically in 20 years.

Although major road projects have been delayed by a funding shortfall for the state Department of Transportation, several major road projects should be completed in the region over the next 20 years, including: the $1.7 billion Zoo Interchange project, the $1.65 billion North-South project to expand and rebuild I-94 from the Mitchell Interchange to the Wisconsin-Illinois state line, and an $850 million project to rebuild and expand I-94 between downtown Milwaukee and the Zoo Interchange.

The cars we drive on those roads could be much different in 20 years, and we might not be doing the driving. Google is developing self-driving cars. Toyota Motor Corp. recently said it plans to make some of its cars fully capable of self-driving by 2020.

“In 20 years, the only people that are going to be driving their own cars are laggards, people that will drive for the independence of it,” said Jesse DePinto, owner of Milwaukee-based Tosa Labs LLC.

Fewer people will own cars, DePinto said. More people will use services similar to Uber to request driverless cars to come pick them up and take them to their destination.

“Your garage will be used as a rec room,” he said.

Then what will become of mass transportation? The city of Milwaukee plans to begin construction soon on a $124 million streetcar system that is intended to be a starter line that will be expanded significantly over time.

“I think you are going to see a very strong streetcar network in 20 years in the densest parts of the city,” Marcoux said.

Bus rapid transit service could also be added, particularly between the Milwaukee County Research Park in Wauwatosa and downtown Milwaukee, he said.

The Milwaukee region needs to improve its mass transit system to compete with other regions for talent, Yunker said.

“We will need to improve our transit system and put that funding on a solid basis, as all of our peer metro areas have done,” he said.

Energy

The push for greener sources of energy could transform that industry.

“Natural gas will replace coal, especially in the Northeast,” said Bob Chernow, a Milwaukee businessman and the former vice chair of the World Future Society. “And oil/gas will have a smaller part in our economy because of alternatives.”

“Energy storage could be a game changer,” said Gale Klappa, chairman and CEO of Milwaukee-based WEC Energy Group. “I don’t know if it’s five years or 15 years from now, but I think it will be within that time horizon, there will be cost-effective energy storage. Today, you cannot store a significant amount of electricity on a cost-effective basis. By and large, electricity must be produced instantaneously to meet customer demand. There’s a lot of work being done across the United States to develop cost-effective electrical storage. If that happens, it will change the game for our industry and for our customers.”

Education

The future of Milwaukee largely depends on the community finding a solution to improve its education system, increasing the skill level of the workforce to help fill job openings and lift lower income individuals out of poverty.

“We can’t continue to get education wrong in this region,” Baas said. “You can’t have an urban school system with proficiency rates in the low teens. If we succeed (in transforming education in Milwaukee) it will be a golden age. If we fail, we will fall further behind than we ever have before.”

Millennials take over

Today’s young professionals in the millennial generation, or Generation Y, will be the leaders of the business world in 20 years.

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The Milwaukee skyline will see big changes over the next 20 years.

“More than 75 percent of our workforce will be comprised of the existing Generation Y and the next generation, Generation Z,” said Aleta Norris, co-founder of Brookfield-based Living As A Leader. “Generation Y, who will be approximately ages 40-58, will hold the senior-most level positions in organizations and will likely bear more resemblance to the current baby boomer tendencies than we currently would imagine. By this point, they will be established in their careers, chronologically and professionally mature, and well into raising their own families. Just as the baby boomers overcame their youthful years of hippie tendencies, so too will this generation overcome some of the whims of youth.”

More women Leaders

The number of women on corporate boards and in executive positions has grown slowly over the past 20 years.

“Twenty years ago, manufacturing was 99.9 percent male dominated,” said Linda Kiedrowski, CEO and owner of Wauwatosa-based manufacturing trade organization The Paranet Group Inc. “Paranet groups were populated by less than 1 percent female membership at the executive ranks. Today, we enjoy about a five percent female membership.”

Expect women’s role in business executive positions to grow dramatically during the next 20 years. Business management trends are shifting from a hierarchical to a collaborative style, which favors women over men, Chernow said.

“Women will either dominate business as leaders, or by (2035) be 40 to 45 percent,” he said.

“The ranks of female CEOs and owners are growing,” Kiedrowski said.

Grocery shopping

The grocery industry in southeastern Wisconsin is in a major transition and will likely look drastically different in 20 years. Several new competitors of market leader Pick ’n Save have come into the region. Pick ’n Save parent company Roundy’s Inc. has grown its business in the Chicago area, but has closed some stores in southeastern Wisconsin. Just as Kohl’s Food Stores have disappeared and the Sentry brand has shrunk dramatically, grocery industry analyst David Livingston said Roundy’s presence in Wisconsin could be reduced dramatically, if not eliminated entirely. Meijer, Sendik’s and Woodman’s are best positioned to replace the Pick ’n Save stores, Livingston said.

“Roundy’s are dead stores walking now,” Livingston said. “Someone will probably take their historically strong locations and keep them open. And there will probably be some new players that have yet to be even thought of yet.”

Chicago Connection

Kenosha County has experienced significant growth in recent years as numerous Illinois companies have moved north of the state line. The State of Illinois and City of Chicago both have significant financial problems that have contributed to the decision of some businesses to relocate. As sprawl continues to push north from the Chicago area, and as more Illinois businesses move to Wisconsin to reduce costs or meet expansion needs, the Chicago and Milwaukee metropolitan areas will increasingly grow into a megalopolis, or mega-region.

“We are, by fate and history, always going to be in the shadow of Chicago,” Monnat said. “Rather than resent it, let’s embrace that as an opportunity and love Chicago to death. More and more I run into people from Chicago who tell me how much they envy the lifestyle we have in Milwaukee.”

Manufacturing

Expect more automation to be added to manufacturing operations over the next 20 years, and new technologies, such as 3D printing, to transform the manufacturing process.

3D printing will have a dramatic impact on manufacturing, Chernow said.

“If you do tool and die, you are going to be out of business (in 20 years),” he said.

“Milwaukee will be a leader in a national trend toward small manufacturing shops, some even by standalone individuals, equipped with 3D printers, addressing a growing need for customized, individually branded products,” said Dan Steininger, president of BizStarts Milwaukee. “People in this region have a history of knowing how to make things. This skill will now transfer from the assembly line to the individual, where it all started for Milwaukee in the last century.”

The retirement of the baby boomers will mean a shift to younger manufacturing workers, Kiedrowski said.

“I suspect in the next 10 years, the average age of a manufacturing employee will go from about 55 to 35,” she said. “This change will have a whole set of challenges. The younger generations are collaborative and tech savvy. Manufacturers will need to learn how to embrace this and make it work to attract younger people to their facilities.”

Manufacturers will continue to be faced with a skills gap between job seekers and the jobs they need to fill.

“The demand for unskilled workers will decrease and the demand for skilled workers will increase,” Kiedrowski said. “Work requiring high production and less skill will probably continue to move to those countries that can support that work. To address the issue of finding skilled workers, I envision an even greater collaboration between educators and manufacturers.”

Manufacturing will be transformed by a massive amount of automation, DePinto said.

The human element

During the next 20 years, the increased use of automation and robotics could remove many of the jobs and tasks that human beings have always done. That begs the question: what will people be good for?

“You can automate some things, but you can’t automate innovation,” Baas said. “Low skilled work is going to become even rarer. That’s why skills are important. You’re going to need talented, innovative people to invent the next robots. For talented, innovative people, there will always be demand.”

“(Humans) are going to be good for working with each other, making relationships,” DePinto said. “That’s one skill that’s never going to go out of style.”

Health care

The health care experience will change for patients.

“Over the next 20 years, we see health care becoming even more convenient with consumers,” said Dr. Nick Turkal, president and CEO of Milwaukee-based Aurora Health Care. “We will continue to find ways to make information more readily available for patients where they are at, whether home, on the road, or in the office. From online reservations to mobile apps and text message communications, our focus will be on the consumer more than ever before.”

The use of medical records also could improve significantly.

“The exchange of information between the electronic health systems and vendors will markedly improve, but a single health record is unlikely,” said Glendale-based Wheaton Franciscan Healthcare chief medical officer Dr. Rita Hanson.

Technological improvements will enhance health care.

“Technology will continue to change the way care is provided across the nation and here in Wisconsin. We will continue to embrace advancements in imaging, research and treatment options to help people live longer, healthier lives. 3D and 4D technology will shape how focus areas like orthopedic, heart health and other areas are treated,” Turkal said.

“Telemedicine will fundamentally alter the way health services are accessed,” Hanson said.

The great unknown

The bottom line is we don’t know what we don’t know about the next 20 years, but the southeastern Wisconsin business community will certainly have to innovate and adapt to the inevitable changes.

“The business that will be the most successful in 20 years hasn’t been invented yet,” Chernow said.

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Andrew Weiland
Andrew Weiland is the editor of BizTimes Milwaukee. He joined BizTimes in 2003, serving as managing editor and real estate reporter for 11 years. A University of Wisconsin-Madison graduate, Weiland is a lifelong resident of the state. He lives in Muskego with his wife, Seng, and son, Zachary. He is an avid sports fan and enjoys coaching his son’s youth baseball and basketball teams.