25 Jan Utilities help switch on economic development
Back in the mid-1980s, encouraging economic development was not a high priority for most Wisconsin public utilities. But then Plant Sites & Parks magazine featured a story about high-tech business concentrations across the U.S.
Jim Mohrbacher, who worked in corporate planning for Madison Gas & Electric, saw the article and mentioned to a colleague that he thought Madison and Dane County had more high-tech development than the magazine pictured. MG&E commissioned a survey of how many companies met the Dun & Bradstreet definition of a high-technology enterprise. Not surprisingly, the survey determined that the number was significant.
Mohrbacher and his colleagues used the information to persuade senior management to develop the MG&E Innovation Center in 1989. In its relatively short history, this high-tech incubator located within the University Research Park has provided lab suites, office space, support equipment and personnel to more than 70 early-stage companies, many of them University of Wisconsin spin-offs.
Thanks to those early efforts, MG&E has taken a lead role in supporting technology-based economic development in Dane County by developing and supporting area business incubators, which have a track record of helping start-up firms succeed in Dane County.
“Our return comes in the long-term when these companies become successful, and get larger by adding employees and new facilities,” says Mohrbacher, who is now business development manager for MG&E. “We want to be part of the support network that nurtures these smaller startups, and hope that there is some long-term return and they grow into companies that are 50 to 100 employees. We have elected to do this as opposed to spending a lot of other resources spending money trying to attract someone to our area, which is very tough to do.”
Xcel Energy and the I-94 corridor
Since the early 1990s, Minneapolis-based Xcel Energy has promoted economic development through the establishment of business parks with a technology emphasis in Western Wisconsin.
Thanks to two successive CEOs who felt it was important for the utility to partner with the communities it serves, Xcel became involved in the early development of business parks in Menomonie and Eau Claire, says Linda Clark, manager of economic development for Xcel, which was formerly known as Northern States Power Co.
“We are focusing on technology, because of the quality job generation piece of development,” Clark says. “There’s a significant core of plastics and computer related industries along the I-94 corridor, so that’s the reason for the focus on high-tech in those two parks.”
In providing revolving loans to get these business parks off the ground, the utility asks only for interest payments until the developments are well underway. Xcel matched what the city contributed in each case to help develop the two business parks.
“That’s the value we can bring to a community that a bank or a for-profit company might not be able to,” Clark says. “When we started this, there wasn’t much going on in terms of support for economic development. Now, there’s a lot more state and county-level support than when we got started.”
Xcel was also part of part of a group that provided administration expense funding for angel investment networks in the Chippewa and St. Croix River valleys, Clark adds.
Two years ago, WE Energies took the lead role in publishing the first information technology and biomedical directory of southeast Wisconsin. Much to everyone’s surprise, the directory listed 500 IT companies.
“I think the directory changed people’s mindset,” says Penny Scheuerman, community development manager for the Milwaukee-based utility. “Nobody had a list of how many IT companies were here prior to that.”
“One of the key strengths is that we have a strong cluster of multi-media and design here doing leading-edge work,” she says. “I think we also put together a very robust list of resources. So, that connected people.”
As part of MG&E’s early efforts to raise awareness, the utility established the Greater Madison Area Directory of High-Tech Companies, which is now in its 20th year of publication.
Scheuerman has worked within the greater Milwaukee business community the last five years to promote awareness of the innovation economy. That includes bringing in outside experts to speak to business groups, such as new economy guru Richard Florida, who came to Milwaukee in 2001.
“When you bring in outside speakers, you are able to take a look at best practices, leading-edge thinking, and benchmarking strategies,” Scheuerman says. “I think it’s healthy for us to bring in people form the outside so that we can stay on top. It’s a way of pushing from the outside.”
WE Energies is an active participant in the new Regional Economic Development Advisory Council (also knows as the Milwaukee 7), which is an effort to brand Southeastern Wisconsin as a single marketing entity in order to help the region prosper. As part of the regional partnership, Scheuerman is helping coordinate an effort to call on all of the biotech and biomedical companies in Southeast Wisconsin to ask the leaders of these companies what key challenges they face. The information will be used to help direct the efforts of the regional council.
Building the right “ecosystem”
As the current president of Wisconsin Innovation Network, Scheuerman is part of a group that is looking at establishing an Advanced Technology Development Center in the Milwaukee area. She describes it as an effort to establish the proper “ecosystem” for technology, biomedical and other knowledge-based companies that can grow 20 percent a year or faster. The Advanced Technology Development Center would provide the angel capital, business plans, and assist target companies with intellectual capital.
“We’ve just got to do a better job of growing innovative, fast-moving, tech-based jobs,” Scheuerman says. “It’s a matter of increasing the awareness, and promoting economic viability of the region. Things are jelling here, and there’s a lot of people who are working toward some pretty significant goals. I am very encouraged, and I think a lot of people are.”