Benchmarking the region's pursuit of innovation

As elected officials, business leaders and economic development officials across the country work to position their regions to compete successfully in the 21st century global economy, "innovation" has become a key theme.

While not easily definable, "innovation" when applied to economic development generally is thought of as applying knowledge and new ideas to the workplace to generate jobs and productivity. Or, as famous management consultant Peter Drucker puts it, "Innovation is the specific instrument of entrepreneurship. The act that endows resources with a new capacity to create wealth."

In southeast Wisconsin, transitioning our economy to one that is based on knowledge and innovation has become a critical goal for groups like the Milwaukee 7 and a growing number of non-profit and academic entities that are working diligently to encourage and fund technology-based start-ups, talent development and capital formation. It also has become a buzzword for elected officials and leaders in academia, who are pushing for new investment in water technology, engineering and similar fields of academics and research that are seen as pivotal in positioning Greater Milwaukee to compete for jobs and talent.

In light of this emphasis, it is pertinent to ask how our region is faring in its pursuit of innovation as a key component of economic success. Hence, the Public Policy Forum's new Innovation Index.

The Index provides baseline data for sets of indicators that are closely linked to the 21st century economy: areas like idea development and commercialization, entrepreneurship and availability of knowledge and skilled workers. We use this data not only to track the region's progress during the past several years, but also to compare it to six peer regions, including three that are commonly seen as leaders in innovation and that can set the bar for southeast Wisconsin's efforts.

The initial Innovation Index finds that the southeast Wisconsin region (defined as Milwaukee, Waukesha, Washington and Ozaukee counties) is trending positively in several areas, including growing university research and development spending, increased educational attainment and more jobs created by small firms. Other trends are less promising, however, including patent activity and knowledge workers per capita.

When compared to the six peer regions, southeast Wisconsin's performance also is mixed. We're doing quite well, for example, in terms of availability of skilled and technical workers (an attribute cited recently as a major contributor to the successful effort to lure Spain's Ingeteam to the Menomonee Valley), but not so well in areas like business dynamics and capital formation.

Our plan is to update the Index annually in order to continue to track the region's progress and provide insights for policymakers and business leaders regarding where we are succeeding and where enhanced efforts or new approaches may be needed.

The full report can be accessed here, and a snapshot of the Index here.