State may be stifling economy

As local historian John Gurda has observed, at this city’s heyday of industrial expansion and innovation, “Milwaukee had a critical mass of both creative thinkers and workers who could make those visions realities.” Nowadays, Milwaukee has many smart, innovative, ambitious and creative people. But they are not producing the level of entrepreneurial activity our economy needs.

The Kauffman Foundation measures entrepreneurial activity throughout the United States, and Wisconsin ranks poorly. A number of factors contribute to Wisconsin’s lousy performance. And to address some of those issues, entrepreneurial advocates are helping with financing, organizational support and creating an entrepreneurial “ecosystem.”

But Wisconsin may be undermining its own goal of promoting entrepreneurship by embracing employer-imposed non-compete contracts. Too frequently, companies require employees to forgo the possibility of starting or joining a new venture, limiting the employees’ options for lengthy periods of time. Non-compete employment agreements are ordinarily seen as a private matter, affecting just an employer and an employee. But before we make that assumption, we also should consider how these contracts create a drag on our economy.

There are indications that nearly 30 million employees, one out of five American workers, are currently covered by a non-compete agreement, and workers with higher education are even more likely to face non-compete restrictions.

Imagine what Milwaukee’s business community would look like if the founders of companies such as Allen-Bradley, Johnson Controls, HarleyDavidson, A.O. Smith, or Briggs and Stratton had faced non-compete restrictions. And then imagine what the Milwaukee economy will look like 100 years from now if modern entrepreneurs are not free to create new ventures.