Posted tagged ‘Economic development’

The ‘Two Wisconsins”…On Radio

November 2, 2017

I spent 20 minutes or so discussing the “left-behinds” of the Wisconsin economic recovery with co-hosts Veronica Rueckert and Rob Ferrett of Wisconsin Public Radio’s Central Time program.

You can hear it here.

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Wisconsin’s “Left Behinds” Are Ignored

October 14, 2017

The Badger State’s celebrated comeback from the Great Recession has been incomplete. I argue in the first of a two-part series in Isthmus that rural Wisconsin and inner-city Milwaukee remain mired in economic and social pain:

Call it “the two Wisconsins,” as the Wisconsin Taxpayers Alliance presciently did in 2006 when the nonpartisan budget group documented Wisconsin’s split reality even before the Great Recession soundly fractured the state economy into winners and left-behinds.

Today, while Dane County booms and the bigger cities in the Fox River Valley and western Wisconsin prosper, the rest of the state is largely mired in a downturn that is a recession in all but name.

Wisconsin is not alone. This dichotomy is also America’s story, as the Economic Innovation Group, a centrist research group in Washington, D.C., first documented in May 2016. The EIG study — widely ignored and fraught with political implications, as pundit Harold Meyerson has argued — detailed how painfully limited the economic recovery from the Great Recession (the magnitude of job destruction earned its adjective) was compared to post-recession periods in the early 1990s and early 2000s.

“The 1990s recovery was powered by small counties, small cities, rural areas. It was very much a grassroots recovery where the entire U.S. landscape experienced a blossoming of enterprise,” says Kenan Fikri, EIG’s research and policy manager.

The early 2010s’ recovery was brutally asymmetrical. By the time the U.S. economy pulled out of the recession, the split was extreme between America’s prosperous and left-behind counties.

So it is in Wisconsin. My story tries to define the problem and suggests that our political leaders have yet to come to grips with it. You can read more here.

Abandoned Mine Ahead

November 30, 2015

A few weeks ago, The Financial Times reported that  the price of steel rebar (the reinforcing rods used in concrete construction) had plunged to a record low on the Shanghai futures market. And the price of iron ore had dropped as well, meaning that mining companies would likely cut production.

That was bad news for the Wisconsin economy. The Badger State has a substantial — but struggling — mining equipment industry in the Milwaukee area.

More to the point, the cooling of the Chinese economy is a major reason why the pipe dream of a revived iron ore mining in northern Wisconsin quickly burst. I examine the flawed thinking of the mine promoters  — notably Gov. Scott Walker and the business group Wisconsin Manufacturers & Commerce–in a piece for Isthmus.

 

Thomas Power, 75, an emeritus natural resources economist at the University of Montana, has studied mining for almost 50 years. He chuckled and said “certainly not” when I asked him in a phone interview if mining iron ore in northern Wisconsin was a good bet for producing jobs and wealth.

“Mining in the United States hasn’t been a growth center or a source of regional prosperity for at least a half century,” he says. “Just look across the country. When was the last time the Iron Range in Minnesota was prosperous? Or the last time when Butte, Montana, was prosperous? Or the Appalachian coal fields? Or the Ozark lead fields? Or the Arizona copper towns?”

The only contemporary success story he could cite was gold mining in the middle of nowhere Nevada, where the workers commute to work.

Reality is that mining operates on a recurring boom-and-bust cycle, he notes, and the bounce-backs are inevitably fueled, in part, by technological advances that reduce the workforce.

Mining jobs, as a result, has been greatly reduced. “It’s like agriculture,” Power says. “The rural Great Plains is losing people. Its not because we’re producing less and less wheat. It’s because we need almost no people to produce the wheat. It’s the same with mining.”

“It’s hard to imagine how some sort of sustainable prosperity can be built around an industry of that sort,” he adds. “That’s not badmouthing mining. That’s just the facts of the matter.”

To read more, please go here.

Epic’s New Focus

November 5, 2014

Epic Systems, the electronic medical records pioneer, has put Dane County on the map. I sketch out four strategic moves by the reclusive giant in this Isthmus story.

Epic is the big winner in the federally subsidized effort to shift American medical care from paper to electronic records. As part of President Obama’s economic stimulus plan, Congress approved a $27 billion incentive program in 2009 that touched off a mad scramble to modernize health systems in the name of improved efficiency and better care.

These health systems, which involve hospital and physician networks, can be complicated contraptions, and no company was better situated to harmonize its knotty internal operations than the well-seasoned Epic, which was founded in 1979 in the shadow of UW-Madison by the charismatic computer wizard Judith Faulkner.

Epic cleaned up in that gold rush. Today, one out of two Americans have their medical records on Epic software, and revenues at the fast-growing privately held company hit $1.7 billion in 2013.

Famously insular and only occasionally open to nosey reporters, Epic declined to provide an executive to be interviewed about its recent strategic moves. But local Epic watchers, a few on the record and more speaking not for attribution (they’re reticent because Epic is feared as well as respected), see a new strategy taking hold.

To read about those moves, please go here.

Lots of other Epic stories can be found by using the search engine at the right

The Great Lucey Legacy

May 21, 2014

Former Gov. Patrick Lucey was the most impressive political figure I’ve reported on. His shrewd understanding  of the sausage-making of legislation was matched by a visionary yet practical program for redefining state government in Wisconsin in the second half of the 20th century. In November 2012, I reviewed the Lucey legacy for a column in Isthmus:

Governing from 1971 to 1977, Lucey merged the two university systems, enacted consumer protection laws, strengthened ethics provisions for officials, revamped campaign finance laws, shifted mental health treatment from institutions to community programs and, perhaps most importantly, retooled government aid programs to reflect the progressive vision: Poorer communities, especially their schools, should get more state aid than richer communities. Republicans howled at how Lucey threatened their low-tax enclaves.

Jesuit educated, Lucey saw the moral end in politics. Linda Reivitz, who worked in the Department of Natural Resources, recalls briefing Lucey on the pros and cons of a policy matter only to be interrupted when she veered into its politics. “He put up his hand and said something like, ‘Young lady. I will worry about the politics. You just tell me about the policy options.'”

Notes Jim Wood, another aide: “Pat knew you only walked through this valley once. Politics wasn’t about getting elected. It was getting elected to do something.”

To read  that column, please go here.

When Lucey died on May 10, 2014, at the age of 96, I revisited and expanded the column for a post on the Wisconsin Policy Research Institute website. In a nutshell, I argued that the Democrats need a leader like Pat Lucey:

     It was Lucey, stealing a page from the GOP playbook, who exempted manufacturers from the machinery and equipment tax as an incentive to re-invest in their plants and then removed business inventories from the property tax. All this was hugely beneficial to Wisconsin’s economic wheelhouse in manufacturing.

            In 1977, the Wall Street Journal surveyed Wisconsin’s economic success and proclaimed the state “the shining star of the Snowbelt.” Those days are long past.

           For most of the next 35-plus years Wisconsin’s economy has struggled under Democratic and Republican governors alike. The ferocious 1981-’82 recession laid waste to manufacturing in southeastern Wisconsin and triggered a fundamental economic decline that bedevils the state to this day. For sure, there was a brief boom in the 1990s. But the new century has been a bust. It’s May 2014, and Wisconsin still has fewer jobs than it did in December 2007, just before another ugly recession rattled the state’s economic foundation.

            For Democrats, Wisconsin’s fiercely contested but decisive swing to Republican domination suggests that the powerless liberals need another Pat Lucey. That is, a nextgen leader who understands the imperative of building a vibrant 21st century economy in a state mired in an Old World Wisconsin re-enactment of yesteryear’s political wars. Where is the Democratic leader who recognizes that unions, as vital as they once were, are all but a spent force? Traditional labor is crippled by hostile economic trends, while public unions are reeling as much from their own cupidity and stupidity as from the conservative pummeling.

To read more, please go here.

A Young Man Of The Times

April 26, 2013

Nate Lustig is the prototype of the successful  young entrepreneur. His generation of  risk-takers is building the new Madison economy. I explain in an Isthmus column:

Lustig followed the familiar template of tech innovators. Even as a kid, he challenged convention.

By his own admission, Lustig was “a terror” in school. Hated homework. Rushed through his assignments. Refused to keep a work notebook. His parents, both lawyers, cut him slack…as long as he stayed on track to get into UW-Madison.

Lustig found his groove refereeing soccer. He says he became an independent contractor at 12 — booking games at his own choosing, biking to parks and making $15 or $20 per outing. He learned a lesson his very first game when a coach started swearing at him.

“I was the one with the whistle,” he says, which pretty much defines his outlook on life. “I got used to making money and not having a boss. I was running my own show.”

At UW-Madison, Lustig became expert at scoring football tickets. He’d charge a small fee for his friends and a larger fee for strangers. That led him to buy a rudimentary ticket website from a graduating senior. He and partners turned it into a seven-campus ticket marketplace that they sold “for the high six figures.” Entrustet [a company that devises digital wills] became his next project.

School was a drag. Lustig wound up a political science major on the five-year plan because he hated — that’s his word — business school classes. They “offered nothing that helped me as an entrepreneur,” he says. They were geared, instead, to advancing students whose ambitions were to land high-paying jobs in corporate America.

“They were very cutthroat because they needed a high rank in their class,” he says. Lustig, on the other hand, wanted to launch his own business, and he had that IT instinct for collaboration and reaching out to colleagues.

He was, in short, a catalyst. A guy who makes things happen.

“What Nate says, he does,” notes Joe Boucher, his lawyer and mentor.

“He’s very resourceful in bringing people together,” says Forrest Woolworth, cofounder of the PerBlue mobile gaming operation.

But Lustig, who remains a Madison booster, has moved to Chile to work.

Here’s the money question: Will he return home to do business?

To read more, please go here.

Anatomy Of A BioTech Failure

April 1, 2013

On paper, Dane County seems like the perfect place to build a cluster of businesses around the cutting edge bio-technology research of  UW-Madison’s long celebrated College of Agriculture and Life Sciences. But as the city’s failed effort to launch the BioLink greenhouse project shows, there are a hots of compelling reasons why the project never found tenants or solved a financing gap, despite securing a $4.5 million federal grant. As I wrote in this Isthmus story, those reasons included the campus never embracing the city project:

Michael Gay, the city’s former coordinator for business development, is the guy credited with landing the federal grant. He says that while Madison has dropped the ball on bio-ag, other communities like Orlando, St. Louis and even Saskatoon (in Canada!) have moved forward on agricultural biotechnology. “It’s all about community partnerships,” he says of their advances.

Gay talks gently on this point, but others don’t. The UW, the source of so much extraordinary agricultural research, never stepped up to the plate on BioLink. It’s the familiar complaint, warranted or not, that the campus does not play well with others.

Some fault the leadership at the College of Agriculture and Life Sciences for turning its back on BioLink. But reality is that the college had far bigger fish to fry: launching the federally funded $125 million Great Lakes Bioenergy Research Center. “BioLink was not a project that CALS was vested in,” admits Rick Lindroth, CALS’s associate dean for research. “It was not critical to our vision.”

While the University Research Park provided BioLink planners with technical support, director Mark Bugher says his team is focused on developing a new 371-acre research park on the west side. “It caught us at a bad time,” he says of BioLink. “My comment internally was that we needed this distraction like we needed a hole in the head. It’s unfortunate. I feel badly about it. The city had an opportunity, but there are some lessons to be learned.”

Successful projects require “a purpose and use that everybody agrees is needed,” he points out. “And people have got to come together.”

But it’s telling that Bugher also acknowledges that Madison leaders are going in “eight different directions” on tech development.

 

To read more, please go here.


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