Wisconsin’s tech report card shows improvements

At the international BIO convention in San Diego this year, 48 of 50 states – Wisconsin included – rented floor space to let the world

know they’re open for business when it comes to medical, environmental or industrial biotechnology.

Some of those states could have saved their money.

While just about any state with a “wet lab” and a National Institutes of Health grant may claim to be a biotech leader these days, the reality is that relatively few states – a couple of dozen or so – have what it takes to incubate the ideas, patent the intellectual property and nurture the emerging companies. Wisconsin is easily among today’s “have” states, but still far from the top.

Whether it is biotech, information technology, nanotechnology or advanced manufacturing, global competition in the major tech sectors requires that participating states, regions or cities have idea-to-IPO capacity. It’s not enough to have top scientists alone. You need pathways to patent and license ideas, to create start-up companies that attract angel and venture investors, a warm entrepreneurial climate and the right management to grow those companies over time.

In varying amounts, Wisconsin has all the necessary ingredients. Here is what some major outside organizations have observed in 2008:

The Ewing Marion Kauffman Foundation

The foundation’s Index of Entrepreneurial Activity, issued in April, noted related trends that speak to the resurgence of Wisconsin’s innovation economy. Not only is entrepreneurial activity on the rise in the Midwest as a whole – but it’s growing even faster in Wisconsin.

The Midwest showed one of the nation’s “largest increases in entrepreneurial activity” in 2006 and 2007, the report concluded. Wisconsin was among a dozen or so states demonstrating the most progress since the late 1990s. The Badger state showed 290 entrepreneurs per 100,000 people, which ranks near the middle of the 50-state pack and ahead of Iowa, Indiana, Illinois, Missouri and Ohio. That’s up from 230 per 100,000 in 1996-1998.

The Kauffman report appeared to confirm trends spotted in the 2007 New Economy Index by the Information Technology & Innovation Foundation. That report showed that Wisconsin had jumped seven places since 2002 in its 50-state report on multiple benchmarks. No state showed a larger jump in entrepreneurial activity.

Battelle

The world’s largest nonprofit research and development organization reported in June that Wisconsin’s bioscience employment is growing faster than the U.S. average in three of four major categories. The state’s job growth in agricultural feedstocks and chemicals, drugs and pharmaceuticals, and research, testing and medical laboratories all exceeded the U.S. average between 2001 and 2006, the Battelle study concluded. Only in medical devices and equipment did Wisconsin fail to grow at the U.S. average, but the state still ranked as a “specialized” state in that sector.

In fact, the Madison area was the only one of 361 metropolitan areas charted by Battelle to be classified as “specialized” in all four sectors.

Wisconsin charted five-year employment increases of 24.8 percent in the agricultural feedstock and chemicals sector, 11 percent in drugs and pharmaceuticals, and 20 percent in research, testing and medical laboratories. That compared to national figures of -6.1 percent, 4 percent and 17.8 percent, respectively. In medical devices, Wisconsin lost 3.7 percent of its employment but the nation as a whole fell by nearly 1 percent.

Among the 50 states, Wisconsin ranked 13th in academic research and development spending, 15th in bioscience R&D, 16th in National Institutes of Health funding, 11th in higher education degrees in bioscience fields, 19th in bioscience employment, 19th in bioscience venture capital investments and 18th in bioscience-related patents.

The Milken Institute

Also released in mid-June was the Milken Institute report, which ranked Wisconsin 22nd on its 50-state index – up five places from 2004, the last time the report was done. Only Minnesota and Illinois among Midwestern states scored better, and Illinois by only one place in the rankings.

Wisconsin’s technology and science work force (14th vs. 30th in 2004) and its risk capital and entrepreneurial infrastructure (16th vs. 32nd four years ago) were the brightest spots in the Milken report. Human capital investment, which is measured by test scores, number of advanced degree holders and other measures, ranked 23rd. Research and development inputs ranked 22nd.

Wisconsin ranked just 33rd for technology concentration and dynamism, a category that measures the vibrancy of a state’s high-tech companies. That proved much work remains when it comes to connecting the economic development dots: R&D, investors and companies capable of growing and creating jobs.

There’s a long way to go before Wisconsin can stand shoulder-to-shoulder with the likes of California or Massachusetts, but it is clearly among those states with an emerging tech-based economy. Building on our best practices while addressing our weaknesses is a goal for 2009 and beyond.

Tom Still is president of the Wisconsin Technology Council, the nonprofit catalyst for tech-based development in Wisconsin. www.wisconsintechnologycouncil.com

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