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Going ‘bold’ for business

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JAMES P. LEUTE
August 1, 2010
— Enacting a new slate of economic development recommendations, including the elimination of the state’s Department of Commerce, could make Wisconsin one of the best places to start or expand a business as early as 2016.

That’s the conclusion of a study released today by four groups interested in new investment, employment and growth-related initiatives.


“Be Bold Wisconsin: The Wisconsin Competitiveness Study” is the work of the Wisconsin Economic Development Association, Competitive Wisconsin, the Wisconsin Counties Association and the research organization Wisconsin Economic Development Institute.


Deloitte Consulting and Newmark Knight Frank conducted the study, which its sponsors hope will become a significant talking point in the upcoming gubernatorial election.


“The study is a very bold statement that says if Wisconsin wants to be recognized as being a player in terms of economic development, here’s what we have to do to be best in class or at least reach our competitors who are already doing many of these things,” said James Otterstein, Rock County’s economic development manager and a member of the study’s steering committee.


The study outlines nine recommendations that could position the state in the top 10 for both starting and expanding businesses by 2016.


Wisconsin now ranks 28th in the Kauffman Index of Entrepreneurial Activity, a benchmark of business start-ups. CNBC ranked the state 29th in its May listing of states to expand a business.


The study is framed on the state’s current and forecasted economic situation, which has “given Wisconsin the opportunity for reflection, evaluation and a new beginning.”


Topping the list of the recommendations is the restructuring of the Department of Commerce into a quasi-public entity in charge of crafting, delivering and overseeing the state’s economic development strategy.


Dubbed “Accelerate Wisconsin,” the agency would be insulated from politics and inherent leadership and policy changes. The study notes that the Department of Commerce has had four secretaries in the last three years.


Other recommendations include:


-- Reinventing Wisconsin’s brand to improve the state’s image as an uncompetitive and convoluted place to do business.


-- Aligning statewide economic development strategies, educational programs and stakeholders around a common outcome: improving and sustaining the state’s economic health.


-- Improving business retention efforts by designating industry-specific specialists to support work done at the local levels.


-- Creating a nonprofit organization to focus on angel and venture capital investment in high-growth companies.


-- Improving the state’s ability to attract businesses through a variety of scenarios, including a state government that’s more “pro-business.”


-- Making the state’s permitting process quicker and more efficient, particularly through a program that certifies statewide sites as shovel-ready.


-- Adding new incentives based on increased funding, enhanced eligibility requirements, flexibility and creativity.


-- Increasing the state’s use of technology and stretching it to include local economic development initiatives to ensure a seamless delivery of service across the state.


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Sponsors of “Be Bold Wisconsin: The Wisconsin Competitiveness Study” say the state has a long history of growth and innovation.


As a recognized national leader in dairy and agricultural products and a hub of industrial activity, Wisconsin is still a place where products are made.


“But this once fertile ground is no longer a flourishing environment for business growth and job creation,” the study says.


“Over the past decades, Wisconsin has yielded its competitive advantage by neglecting to seed, nurture and cultivate new economic opportunities.”


Here’s the backdrop for the study, according to its sponsors:


-- Per capita personal income in Wisconsin has slipped compared to the national average. By 2008, the state’s income standing had fallen to No. 27, its lowest positioning in nearly 20 years. At $37,770, it was nearly $2,400 less than the national average.


-- Average weekly earnings in Wisconsin were essentially flat in 2009, at roughly $680. Only 14 states had lower earnings for nonfarm payrolls.


-- Wisconsin’s workforce lost more than 178,000 jobs from December 2007 to December 2009. Nearly 76,000, or 43 percent, were in manufacturing.? While Wisconsin’s June unemployment rate dipped to 7.9 percent, the state’s work force shrunk by 13,600 from the previous month. That, according to the study, suggests that the drop in unemployment was the result of workers giving up on finding a job.


-- Wisconsin’s 12-month change in nonfarm employment was the worst of the Midwestern states and 40th overall, shrinking by 0.7 percent from June 2009 to June 2010. Over the same period, Illinois’ employment shrunk by 0.6 percent, while all other Midwestern states grew employment. Indiana added 38,200 jobs.


-- Wisconsin repeatedly ranks in the lower half or among the bottom states in terms of business environment. Forbes magazine rated the state as No. 48 in 2009 on six indicators: costs, labor supply, regulatory environment, current economic climate, growth prospects and quality of life.


-- The state’s Department of Commerce has had high turnover, with four secretaries in the last three years.


-- Location and site selection consultants have said that the state’s outreach has been minimal for decades.



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