Economic development role models for Wisconsin
If not the Wisconsin Economic Development Corp., what? That’s the question that must be asked — and properly answered — for Wisconsin to embrace and execute an economic development strategy consistent with the realities of a competitive world.
Legislators and others are properly concerned over examples of unsecured or otherwise questionable loans by WEDC in its first year or so of existence, when it was transformed from the former Department of Commerce into the quasi-public authority it is today.
Some have suggested doing away with WEDC and returning to a public economic agency. A few favor a laissez-faire approach to keep the state away from business development. Others say stay the course and refine the mission by putting the right policies and procedures in place.
The latter option seems the most likely route, unless Wisconsin wants to lose more valuable time changing bureaucratic tires on a moving car.
“We have long believed that whether an (economic development organization) is a state agency or quasi-public is immaterial to its success,” said Dan Berglund, director of the State Science and Technology Institute. Ohio-based SSTI tracks economic development efforts in all 50 states.
“It appears to be more about the processes that are in place and the people leading the organization and implementing those processes,” Berglund said. “It is most important that any of these organizations be set up with transparency — while protecting confidential business information — and accountability in mind.”
Given those tests, here are a few of my own suggestions for state organizations to study as Wisconsin considers best practices.
The Michigan Economic Development Corp. has lasted through Republican and Democratic administrations alike, and was created when Michigan was entering its automobile manufacturing crisis. It is a quasi-public authority, like WEDC, and has helped put a comparable Midwestern state on the right track.
Michigan may be the nation’s biggest comeback story. By many economic measures, including employment rate and overall job loss, Michigan fell further than any other state during the recession. But Michigan has added 417,900 jobs since its low point in March 2010, placing it fifth in overall employment growth among the 50 states. Employment in the state is up nearly 11%, to 4,246,400 in March.
Wisconsin has seen 6.51% employment growth since February 2010, according to a May 2015 report by Stateline and the Pew Charitable Trusts. That was the Badger State’s low point for joblessness. That means 176,300 jobs have been created in Wisconsin since that point.
The Arizona Commerce Authority is another quasi-public structure that has experienced success over time and throughout different political administrations.
Arizona takes a regional approach to development while trying to strike a balance between entrepreneurial strategies that focus on new businesses and tech-based development; recruitment, expansion and retention; and “fertile soil” policies that create conditions for growth. Like any state, those include optimizing taxes, streamlining regulations, investing in infrastructure and providing a better-educated, more highly skilled workforce.
The Pennsylvania Department of Community and Economic Development is a public structure but appears appropriately nimble. Like Arizona, which has important regional differences, Pennsylvania needed to adopt strategies that worked for the Philadelphia area, the Pittsburgh region and a lot of diverse places in between.
Business Oregon is a state agency overseen by a commission that includes a mix of private and public members. Its programs emphasize partnerships and cover the range of entrepreneurial, export, workforce and access to capital, with an emphasis on smaller businesses. It even houses some of the state’s cultural arts agencies.
Thanks to the oil and gas boom, North Dakota usually ranks atop national rankings for job growth. But no small amount of credit goes to the North Dakota Department of Economic Development and Finance, which has stressed techbased development in the Red River Valley and initiatives to build sectors outside the fracking rush.
Other states that have seen success and may offer best practices for Wisconsin include Colorado, Utah and Maryland. Colorado is one of the leading states in job creation, according to Stateline, with a 13.45% employment growth since January 2010. Sure, some of that is a byproduct of mountains and marijuana, but the state has also stressed entrepreneurism, partnerships and regional cooperation.
While there are many ways to organize Wisconsin’s economic development efforts, other states have proved that walking away from a competitive world isn’t one of them. Tom Still is president of the Wisconsin Technology Council. Its Wisconsin Innovation Network meets in Wauwatosa. Contact him at news@wisconsintechnologycouncil.com.