Economic report raises red flags on Wisconsin's future

Economic report raises red flags on Wisconsin's future

Madison, Wis. — Wisconsin could lose its carefully established position as a nexus for research and development in the Midwest if more money is not channeled into academic and other research institutions, according to a new report.

This prediction comes from the Wisconsin Technology Council, the advisor to the governor on technological matters. The report, titled “The Economic Value of Academic Research and Development in Wisconsin,” studied investment trends and decreased university funding over the past several years.
“State support [in Wisconsin] is diminishing at a time when other states are increasing support, with the expectation that this is the growth area for the future.” said Toni Sikes, a WTC member and contributor to the report.

Slashed investments and their consequences

From the report: In the past year, academic and research institutions around the state have spent roughly $883 million on research projects, with at least $662 million coming from the University of Wisconsin-Madison alone.
Using an estimate from the U.S. Department of Commerce that each $1 million of R&D spending translates into 36 jobs, that means the creation of 31,788 jobs in the state.
However, despite all the spending and job creation, Wisconsin has still fallen behind in supporting this growth, the report says. The state’s efforts to fund higher education and research projects have fallen in the past two decades, with per capita public spending cut by 48 percent since 1978, placing Wisconsin 40th out of all 50 states for efforts to improve. Lectures, group discussion, courses and lab sections have all been cut from 2002 to 2003, while student enrollment has increased by one-half percent.

“Support doesn’t always equal money, although I’ve never heard of anyone who said money doesn’t help.”

All these factors have contributed to a weakened effort in Wisconsin research, placing the state just outside the top twenty for R&D spending, and leaving the economy growing slightly more slowly than the rest of the country.
According to Tom Still, president of the council, blows such as these are cutting Wisconsin off from the opportunities it needs to build a technology framework, making it less attractive to investors.
“Broadly stated, one of the best ways to build upon the state’s existing technology base is to support the R&D sector at our major academic institutions.” Still said. “If state support for these [research] institutions erodes, it will be more difficult to maintain the basic infrastructure, and thus more difficult to attract federal R&D grants.”

How to rebuild the system

To increase the state’s academic strengths, the report suggests that the government needs to play a stronger role in pushing these changes forward, reversing the trend of lowered funds and promoting connections outside the university.
“We must do a better job, and the state needs to support us in doing a better job,” said Noel Radomski, a policy and planning analyst for UW-Madison. “Support doesn’t always equal money, although I’ve never heard of anyone who said money doesn’t help.”
There are several programs already in place the report suggests investment should continue in, such as the capital improvement programs BioStar and HealthStar that create spin-off companies from UW-Madison. The Interdisciplinary Research Center at the university’s medical school is also heavily promoted, and with the aid of public support it is believed the center will help attract more private donations.
Collaborative programs are also a key feature, and the report suggests revising and rebuilding the collaborative relationship between UW-Madison, the Medical College of Wisconsin and the Marshfield Clinic. By promoting joint initiatives similar to those recently applied in Minnesota, where the University of Minnesota and the Mayo Clinic have joined forces, it will open up the avenue for new research opportunities.
“The state and the parties listed above need to actively measure, celebrate, and succeed with the goal of increasing risk-taking and human and intellectual capital,” Radomski said. “As a state we haven’t said what ultimately is important … If it’s important and we don’t succeed, the state will fail.”

A long road ahead

Even with all these theories and suggestions, it may still not be easy for Wisconsin to get back on its feet. David Ward, president of NorthStar Economics, said recharging the industry in the state will be a massive project, requiring almost two decades of effort, cooperation, and investment — something he said the state does not seem prepared to undertake.
“There are no economic silver bullets … tech clusters require brainpower, tech transfer, risk capital, and entrepreneurs,” Ward said. “We are in a slow growth track and need to break out of it. We need a sense of urgency to propel change, [but] more importantly we all need to be on the same page, something that does not appear to be the case now.”
Les Chappell is a staff writer for WTN and can be reached at