Innovation Centers – Wisconsin’s Success – Part I

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This month I had the chance to visit the one of the Innovation Centers in Milwaukee Wisconsin.  The Global Water Center is the first of many cluster-focused centers launched in Wisconsin over the past few years.     Wisconsin has taken the lead in development of these centers in partnership with federal gov, state gov, and leading corporations.   They now serve as a model for other states that seek to replicate their success.   Below I have condensed many of the learning’s from visiting the center to pass along.   Wisconsin’s success vastly exceeded all expectations.

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  • Create regional advantages for competitive advantage
  • Be a global leader to attract investment and relocation to region
  • Have a global brand
  • Be first to market to set the standard
  • Be first to build to capitalize on government, academic, and investor funding sources before it is common practice

Key Drivers / Enablers:

  • Strategic plan in place
  • Public and Private partnership for funding
  • Cluster focus / Footprint in place / Leverage regional assets & expertise / multiple parallel tracks
  • Consortium engagements of cluster companies at the heart of economic model
  • Maturity of strategy and approach is attracting increasing support and investment ( gravity )

Creation of WEDC (5 year journey from idea to regional advantage)

  • Created 2011 from the State Department of Commerce as a separate 501c3 built to operate like a business focused on the development of the states innovation ecosystem
  • It does not report to the state or legislature, but has board members from state, industry & academia
  • Organization is already over 100 employees and growing focused on regional development and building global network
  • State funding created the organization building initial team, planning, building network of sponsors, and operational capabilities
  • Once state dollars where committed, companies rapidly joined and sponsored build out of services and facilities
  • Once underway they qualified for Federal grants across a broad spectrum: Innovation, job creation, and urban revitalization
  • Corporate & Startup tax incentives from state
  • Initial corporate sponsors where contributing $8M – $10M each for the build out of the centers and industry parks
  • Within a year they were raising $30 for each $1 the state contributed
  • Within three years they were raising $70 for each dollars the state contributed

Initial Pilot Center

  • Water Council – industry association formed years ago to build out network of leading companies globally
  • Water Tech 1 Building / Global Water Center Building is 2 yrs old; 100,000 sq/ft – 7 floors of Class A space
  • Water Tech 2 Building / Designed with construction to start this year; Class A space
  • Water Annex Building / Class B Incubation space where selected startups coming out of the Accelerator graduate to
  • Water Industry park / Corporations building facilities from HQs, Labs, and Manufacturing near center

Results to Date

  • Global Water Center (Water Tech 1) was opened in 2013 with Class A space, high tech labs, auditors and meetings rooms. By 2015 the seven floor center was completely full with over 40 corporations offering in the facility with dedicated staff
  • Regional, National, and Foreign demand has required Water Tech 2 to launch construction to house more corporations
  • Many corporations are building out facilities in the industry park
  • Corporations from Netherlands, Korea, China, Singapore, France, etc.  Looking to join center and build international corridors for start-ups to be funded to come over
  • Foreign academic institutions and governments are sending delegations looking for partnerships
  • Several large corporations, who were early skeptics, have already relocated their headquarters into the industry park with considerable expense because of the competitive advantage they see in participating
  • MN companies are participating – Wisconsin is now the leader in the water cluster
  • 8+ academic institutions are members providing many levels of training in water science, entrepreneurship, etc.
  • Corporations are funding industry events
  • Venture capital and angel networks are now integrated; major investors like JP Morgan are participating
  • They are attracting new venture capital from other regions
  • In three years over 19 joint patents have been created by B2B collaboration
  • The start-up accelerator hosts cohorts of start-ups in the facility with services supported by the center, academic partners, and corporate partners
  • Start-ups that are selected from the cohorts are sponsored into the new Water Annex that is a new Class B office facility
  • Many other adjacent industries are now coming into the region
  • Revitalize Walker point district in Milwaukee over $211M invested in surrounding neighborhood + job creation
  • Many of the neighborhood buildings are being renovated to host a variety of business
  • Lifestyle business of food, entertainment,  shopping and housing are spring up all around the area
  • They are attracting young talent from the regions
  • The model is working so successfully they are already launching 8+ more centers with others being planned
  • Other states and countries are seeking them for help to build the model in their regions

Real Estate Investments around a single center:

Real Estate Investments

Centers in development

  • Global Water – initial pilot launched 3 years ago in Milwaukee
  • Energy & Power – Milwaukee
  • Aviation & Aerospace = Oshkosh
  • Advanced IT – Madison
  • Bio Science – Madison

Food & Beverage – Milwaukee

Centers in planning / consideration phase

  • Internet of Things – Madison
  • Agriculture – TBD
  • Insurance / Financial – Madison

Academic & Professional Institutions already providing services

  • University of Milwaukee
  • University of Madison
  • University of Whitewater
  • Marquette University
  • School of Fresh Water Science / new $50M facility built in MKE / 1 of 3 in USA
  • Multiple Law Firms
  • Multiple IP Firms
  • Multiple Account Firms

Wisconsin advantages – from their perspective

  • Wisconsin has tremendous assets in industries, education, national resources and culture
  • Wisconsin’s culture is more progressive and collaborative – planning & investing forward for future competitive advantage
  • Wisconsin has a regional economic development plan & shared agenda in place and evolving
  • Wisconsin has removed tenure from state law; academic institutions are evolving their business model and generate value to the ecosystem
  • Wisconsin will be the leader in multiple clusters as a global brand
  • Leadership

Key Learning’s

  • State commitment and basic investment was the critical trigger for corporate and federal funding.
  • The state created an independent business to create the ecosystem centers – WEDC
  • They built a 100+ person business to create centers and create the partnerships
  • It was corporate leadership through participation, planning, and funding that actually made it a reality.   The leading companies of the region, to establish Wisconsin as the Global Center for Water, invested millions of dollars
  • The centers were built as businesses for accelerating business & competitive advantage; they are already leveraging a 70:1 investment ratio.  Industry is now leading the state’s economic development.
  • While they may be already 5 years ahead in formation from Minnesota, Wisconsin is accelerating rapidly into multiple clusters simultaneously.   This process will go much faster than the building out and selling of the original concept.  In another 5 years they will be relatively 15 years ahead.

Take a closer look at the extensive facilities.

Images from Tour:

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