How do we compare to our neighbors? Depends on whom you ask

You know the drill: Wisconsin’s economic strategy just isn’t measuring up compared to others.

A July 18th editorial claimed “Wisconsin is struggling.” It said Iowa seems to have a better plan. An August 8th column by John Torinus argued, “We get outgunned by states with much larger budgets for economic development.” He said Michigan seems to be doing better. On October 3rd, Torinus wrote that Wisconsin was falling behind Illinois and Minnesota. He quoted a UW-Madison expert as stating the state economy is in “very bad shape.” Meanwhile, Marc Levine’s recent editorial blasts local economic development efforts as being prey to “irrational exuberance.”

While that’s the tone we’re used to, it appears others see our economy and business climate differently. A two-part series (here and here) in the Minneapolis Star Tribune by Thomas Lee details a competition for biotech firms in which Minnesota is clearly the underdog. “When it comes to innovation,” Lee states, “Minnesota is quickly falling behind its neighbor.”

The articles cite a number of Minnesota-grown biotech start-ups fleeing to Wisconsin, where businesses interviewed claimed they had access to more money, and where organizations like the Wisconsin Alumni Research Foundation, University Research Park and Accelerate Wisconsin, along with tax incentives and investor capital, create a friendly climate for new ventures. (The Milwaukee County Research Park's Technology Innovation Center uses similar strategies locally.)

Even with a $6.5 billion deficit, the budget passed by Wisconsin legislators increases angel investor tax credits from $5.5 million to $18.25 million and venture capital credits from $6 million to $18.75 million. Minnesota has no comparable tax credits and, while Minnesota does not appear to track angel investors, Wisconsin has 22 angel groups that made 53 deals in 2008.

In the Star Tribune, Wisconsin and its Madison university are compared to Silicon Valley, North Carolina’s Research Triangle Park, MIT, and Stanford University and are said to feature “the most formidable university technology transfer program in the country” as well as “the country’s most industrial workforce.”

The director of business development at a Minneapolis health consulting group explains, “There is a real desire to succeed in Wisconsin. The state has no stodgy culture. It’s a culture of newness, a desire to try new things.” Another executive gushes, “Wisconsin is a very exciting place. You just get a sense of forward motion. Wisconsin is doing something right.”

What are we to make of the contrast in tones between how we see ourselves and how others perceive us? Judging from the above-referenced inter-state economic comparisons, as well as the Public Policy Forum’s own analysis of the Minnesota business community’s involvement with early childhood education reforms, in some ways, the grass is always greener on the other side. However, that does not change the fact that comparison with other states is an important tool for seeing one’s own state – its problem areas and its strengths – in sharper focus.