19 Apr 2006 Greater Madison High Tech Directory lists 475 tech companies
Madison, Wis. Greater Madison technology businesses now number 475, with life science companies being the largest cluster within the group, according to the 2006 Greater Madison Area Directory of High-Tech Companies published by Madison Gas & Electric Co.
The directory, which will be released next week, profiles 475 tech firms in 12 industry clusters, an increase of 15 companies or 3.3 percent over the 460 listed in the 2005 directory. Jim Mohrbacher, business development manager for MG&E, said 408 of the area’s 475 tech firms are profiled in the directory, compared with 394 profiled the previous year.
Although the 3.3 percent growth rate is lower than the average annual increase of the past 10 years, Mohrbacher said the technology fields still comprise a dynamic industry. “It is our fastest growing private sector industry in the region,” he stated.
With more than 100 bioscience companies among the 475 tech firms, the life science industry is the largest of the 12 clusters profiled by MG&E. Biotech businesses comprise 24% of the companies listed in the directory.
A comparison of Greater Madison’s life science industry to that of Atlanta, a metro area of more than 4 million people, shows that Madison is more than holding its own nationally. Atlanta, one of the country’s fastest growing metropolitan areas over the past decade, has over 200 life science companies. Greater Madison, whose population was estimated at 453,000 in 2004, now boasts 112 bioscience companies, or more than half of Atlanta’s total.
Madison also compares favorably to more established biotechnology hubs. Metropolitan Boston, which has a population of 5.8 million, more than 14 times the size of Greater Madison, has roughly 275 biotech businesses, or less than three times the number of firms.
Biotechnology, noted Mohrbacher, is the fastest growing part of Greater Madison’s high-tech industry. In addition to generic biotechnology, this cluster includes companies involved in medical biotech, agricultural biotech, pharmaceutical development, and contract research and development. Since the 2005 directory was published, the University of Wisconsin-Madison was chosen by the National Institutes of Health to house the nation’s first National Stem Cell Bank, a development that could spur more business formation.
In Jim Leonhart’s view, the entire state is living up to its billing as one of the nation’s biotechnology “hotbeds,” as reported in 2004 by Forbes magazine. Wisconsin, lauded by the magazine for providing financial support to businesses seeking equity funding, is approaching 300 bioscience companies, and biotech is a $7 billion industry statewide, according to Leonhart, executive director of the Wisconsin Biotechnology and Medical Device Association. AeA, a trade association for the tech industry, recently reported that Wisconsin firms attracted $68 million in venture capital in 2005, a 19 percent increase over 2004.
Meanwhile, membership in the association has grown from 75 to more than 200 in the past three years. “This industry is here to stay,” Leonhart said. “We think we’ve got the foundation now.”
The big picture
Overall, 30 firms have been added to this year’s directory, and about one third of them are recent start ups or new expansions into the area, Mohrbacher said.
A total of 18 firms either did not want to be listed, or were dropped from last year’s list due to business failures, relocation, or consolidations. Some of the key names in that group are Bone Care International, which was acquired by Genzyme Corp. of Cambridge, Mass.; Nicolet Instruments, which merged with LDS Test and Measurement of Middleton; and Wingra Technologies, which was sold to Quest Software of Aliso Viejo, Calif. Genzyme, LDS, and Quest are listed in the directory.
From 1995 to 2005, the number of technology firms listed in the directory rose from 325 to more than 475, a 46% increase or 4.6 percent on an average annual basis.
Perhaps even more telling, high-tech employment grew from 15,000 in 1995 to more than 26,500 jobs, a 77 percent increase or a 7.7 percent annual increase over that 10-year period. Those 26,500 jobs represent about 9 percent of the 286,000-member labor force in Dane County.
In addition, Greater Madison’s high tech firms reported more than $5 billion in combined revenue and research grants this past year, whereas 10 years ago the corresponding figure was about $2 billion, an increase of 150 percent.
The 10-year growth trend was achieved despite a snag during the brief recession in 2001 and the sluggish recovery that followed. Since 2000, the overall number of technology firms has risen from 425 to 475, a 12 percent increase. “We hit a pretty big blip around the year 2000, where things kind of slowed down for awhile,” Mohrbacher said.
Statewide, high-tech employment stood at 77,800 in 2004, good for 21st in the nation, the AeA report said. High-tech workers earned an average wage of $56,300 that year, which is 64 percent higher than Wisconsin’s average private sector wage but places the state only 34th in the U.S. in terms of high-tech wages.
On a more positive note, AeA reported that technology exports from Wisconsin grew 34 percent in 2005 to $3.5 billion, good for 14th nationwide. Technology accounted for 23 percent of Wisconsin’s total exports.
The direct approach
The 2006 directory, the 20th annual survey published by MG&E, contains brief company profiles, including employee counts, revenue, business descriptions, chief executives, and contact information.
In addition, the directory includes business assistance organizations, employee training programs, networking organizations, and venture capital firms, among other resources.
The MG&E directory is available in both print and PDF formats. Purchase it online through the Wisconsin Technology Network, or contact the MG&E economic development office to order through the mail. The directory is sponsored by MG&E and the City of Madison’s Office of Business Resources.