The numbers behind the rise of Epic Systems, a pioneer-turned-leader in the digital health records business, may surprise even those who are familiar with the story.

* Projected year-end revenues of $1.2 billion in 2011.
* 260 customers in 2011, up from 227 a year earlier and 73 in 2000.
* 5,225 employees in 2011, up from 4,200 a year earlier and 400 in 2000. About 1,000 more people will be hired in 2012 – after the company sifts through the 150,000 or so resumes it gets each year. The average age of an Epic employee is 29.
* About 2.5 million square feet of space under roof on the Epic campus in Verona, with more than 1 million square feet on the way. This summer's construction season will find about 1,500 construction workers per day on the Epic grounds.
* Epic books about 60,000 flights per year through the Dane County Regional Airport for its employees. That doesn't count its visiting customers and advisory groups. Monday afternoon – the typical departure time for installation and service teams – is called "Epic Monday" at the airport.
* Perhaps the most telling statistic of all: 38 percent of patients in the United States are connected to their personal medical records through Epic software made and serviced in the Madison area.

The success of Epic Systems, born in 1979 with an $80,000 computer loan and a rented basement office on University Avenue, is a classic example of disruptive technology. While doctors everywhere were still scribbling on charts that were hard to read, easy to lose and nearly impossible to get from one hospital to another, Epic founder Judith Faulkner was envisioning a world in which health records could be built, checked and stored electronically.

Finance and banking, airlines and other industries long ago made the switch from paper to digital, but health care – often slow to embrace change and heavily regulated – has taken a while to follow.

Today, as health care confronts the need to enhance patient safety, improve the quality of care, better track clinical outcomes, control costs and meet the needs of a mobile population, digital health records have become an imperative.

Toss in the rise of "integrated care," the management model for much of the country, and Epic Systems found itself in a right time and place with the right products.

Steve Dickmann, Epic's chief administrative officer, lifted a veil on the company's story during a Jan. 24 meeting of the Wisconsin Innovation Network in Madison. The tale is compelling and simple: The company's motto is "Do good. Have fun. Make money." Epic does everything it can in house, right down to the company's food service. It doesn't acquire other software companies. It is employee-owned, independent and likely always will be. It is almost allergic to publicity – but quietly generous within the community.

Epic Systems is the largest private employer in Dane County and one of the largest in the state. Its effect on the local economy has become akin, at least in relative scale, to what Dell, one of the world's largest producers of computers, means to its home town of Austin, Texas.

The emerging question is whether Epic will anchor a larger technology cluster that already includes a sizable biotechnology and medical device sector. That was part of the Dell story in Austin, where Michael Dell – much like Judith Faulkner – started in modest surroundings with limited capital. Today, the Austin technology cluster includes major facilities for IBM, Freescale Semiconductor, Samsung, Intel, Texas Instruments, Apple, Google and more.

Epic doesn't acquire other companies or technologies – and it doesn't spin them out, either. Like most companies, however, Epic has employee turnover. Those tech-savvy workers often wind up staying in Wisconsin and finding (or making) other opportunities. Many people from outside Wisconsin who apply to work at Epic learn more about the Madison area, even if they aren't hired. As one software entrepreneur told me the other day, "Epic is the best thing to happen to me when it comes to finding talent."

Epic's story is truly epic. The challenge to Wisconsin and the Madison area is to learn how to build on it.

-- Still is president of the Wisconsin Technology Council. He is the former associate editor of the Wisconsin State Journal in Madison.

Labels: Tom_Still

The announced move of Kestrel Aircraft Corp. to Superior, Wis., may strike some skeptics as a curious landing strip for a company in the business of making small passenger planes. Don’t bail out on this story just yet. Wisconsin has more air and space credibility than meets the eye.

While more than 60 percent of the nation’s aerospace jobs are clustered in six states – Washington, California, Texas, Kansas, Connecticut and Arizona – Wisconsin can stake claim to a small but growing aerospace industry.

Those assets range from university-based space research in Madison to the world-renowned Air Venture in Oshkosh to commercial manufacturers such as Gulfstream, a General Dynamics subsidiary with a plant in Appleton.

The newest addition to Wisconsin’s aerospace cluster is Kestrel, which will move its headquarters and production from Brunswick, Maine, to Superior. The company already has engineering and design offices just across the border in Duluth, Minn. Gov. Scott Walker and other state and local officials announced this week that Kestrel, lured by a mix of tax credits and loans, will create 600 jobs by 2016 through production of single-engine turboprop planes that seat six to eight passengers.

If Kestrel’s projections are correct, it will gradually boost Wisconsin aerospace exports that totaled $245.6 million in 2010, according to the state Department of Revenue. That $245.6 million represented 13.8 percent of all exports in the transportation equipment category, which was Wisconsin’s third-largest export sector in 2010.

While there are no Boeing or Bombardier assembly plants in Wisconsin, there are many Wisconsin-based suppliers of those major aerospace companies and more. In fact, some 140 suppliers in Wisconsin work with Boeing. DeltaHawk Engines has a plant in Racine and Morgan Aircraft has announced plans to build a production facility in Sheboygan.

The state is also the location for one of the world’s largest air shows, AirVenture, which attracts about 500,000 people from 60 nations each summer to Wittman Regional Airport in Oshkosh, home to the Experimental Aircraft Association.

The state’s aerospace research base has global credentials. The UW-Madison Cooperative Institute for Meteorological Satellite Studies is the leading source of satellite weather data in the world. The National Oceanic and Atmospheric Administration recently renewed a $60 million contract with the institute.

The UW-Madison is also home to the Ice Cube Project. Completed in late 2010 at the South Pole, IceCube is the world’s largest neutrino observatory. It was built at the cost of $271 million over 10 years to find extremely high-energy neutrinos – tiny subatomic particles – originating from supernova explosions, gamma-ray bursts and black holes. Scientists believe it will greatly expand knowledge of astrophysics and “dark matter.”

The UW-Madison College of Engineering has longstanding ties into NASA and space exploration, including its Wisconsin Center for Space Automation and Robotics and its work around development of Helium-3 energy technologies. The campus also has a Space Science and Engineering Center as well as a highly-rated astronomy department.

Researchers at UW-Stout have worked on the design and manufacture of functional clothing that has aerospace applications; researchers at UW-Oshkosh have developed a propellant for rocket fuels to increase the speed and efficiency of the fuel’s burn; researchers at UW-Platteville and Oshkosh have developed nano-materials that can help with conductivity and weight issues; and researchers at UW-Milwaukee are engaged in work around composites, sensors, gravitational-wave physics and more.

A successful private contractor with NASA is Orbital Technologies Corp., Madison, which was awarded more than $150 million in grants and contracts in its first 20 years. It’s a prime example of R&D yielding products and jobs.

As it prepares to land in Superior, Kestrel Aircraft Corp. need not feel like Charles Lindbergh on the first successful trans-Atlantic flight in 1927. The company is not flying solo in a state that knows its way around the air and space industry.

-- Still is president of the Wisconsin Technology Council. He is the former associate editor of the Wisconsin State Journal in Madison.

Labels: Tom_Still

Most grocery stores stock an entire aisle of shelves with breakfast cereal -- and for good reason. Consumers like to choose for themselves based on price, quality, and other factors. That kind of choice and competition among brands is also good for the consumer because it leads to lower costs and improved goods.

But what if a grocery store middleman decided to stop carrying the top-selling brand? That might sound absurd, but it is essentially what is happening in the retail pharmacy market. A company called Express Scripts has failed to negotiate a fair contract with Walgreens, and as a result thousands of families in Wisconsin no longer are able to get their prescriptions filled at the nation’s leading community pharmacy.

Reduced access to Walgreens will be detrimental to consumers in a number of ways. First, it makes seeking pharmacy care more difficult. Patients whose prescription drug benefits are administered through Express Scripts may have to travel greater distances to find a pharmacy. It also means patients will be denied access to the pharmacists they trust and with whom they have longstanding relationships. With less competition in the market, it additionally leads to consumers being vulnerable to price increases.

So why is a company most families have never heard of preventing so many Wisconsinites from using the pharmacy of their choice? Simply put: profits. Express Scripts is what is known as a pharmacy benefit manager. It brokers agreements for health insurance plans that dictate the price and availability of prescription drugs. It’s a profitable business -- Express Scripts’ profits per prescription have grown at a rate of 13-15 percent per year while health care costs to the average consumer have continued to rise.

In negotiating a new agreement, Walgreens offered to keep its rates flat for the next three years. Express Scripts, however, sought to use its market power to slash reimbursement rates to Walgreens below the industry average. As a result of that failure to negotiate fairly, Express Scripts as of January 1 has reduced consumer choice and shut off access to millions of Americans’ pharmacy of choice.

Express Scripts says patients can simply choose another place to get their prescriptions, just like they can start eating a different brand of breakfast cereal. That may be easy for a middleman to say, but to those who work directly with consumers, it means consumers are not getting the product they want at a price they deem fair. That is not acceptable. Express Scripts should put patients above profits and get back to the negotiating table.

-- Klaetsch is executive director of the Wisconsin Coalition for Consumer Choice.

Labels: George_Klaetsch

Less than a year ago, Texas Gov. Rick Perry told a group of business leaders that investments from a major Lone Star fund are "helping us keep groundbreaking innovations in the state."

Roll forward to the rough-and-tumble of the 2012 presidential primary campaign, and Perry is deriding investor and former Massachusetts Gov. Mitt Romney as a "vulture capitalist" who built Bain Capital on the backs of the working poor.

Newt Gingrich, the former House speaker who consulted with Freddie Mac for eight years – yes, the same taxpayer-backed Freddie Mac involved in the subprime mortgage crisis – has also castigated Romney for "looting" companies and communities.

Maybe the Occupy Wall Street movement has spread to the "anybody but Romney" wing of the Republican Party.

While Republicans and Democrats alike may find much to criticize with Romney, the curious, almost anti-capitalist attacks that preceded the New Hampshire primary election offer a chance to learn more about the term "venture capital" and what it really means.

That may be particularly instructive in Wisconsin, where the Legislature may soon embark on a debate about a state-leveraged plan to promote early stage investment in Wisconsin-based companies by attracting more private dollars.

Romney was one of the founders of Bain Capital, a Boston-based investment firm that specializes in a broad range of what's often called "alternative investments." Those include venture capital investments in young, emerging companies, usually in the range of $5 million to $10 million nationally, but also define private equity and leveraged buyout investments, which are much farther up on the food chain.

Over time, Bain Capital or its subsidiaries have invested in companies ranging from AMC Entertainment to Burger King, from Domino's Pizza to Dunkin' Donuts, and from The Sports Authority to Staples. Sometimes it has turned around companies that were struggling – and sometimes it has sold them amidst market turmoil if it meant returning a profit to its own investors.

Through Bain Venture Capital, Romney's firm has also invested in young companies with ideas or inventions that disrupt existing markets or create entirely new markets.

That's how capitalism works. The markets constantly push up from below, with more innovative companies crowding out those that have lost their competitive edge. It's why there are no buggy whips, rotary telephones and typewriters. Time and innovation march on – and investors who risk joining the parade are often rewarded by making money.

As the Republican food fight demonstrates, definitions are important. What is often described generically as venture capital is really a mix of private investments that take place at different stages of a company's existence.

The youngest companies are usually funded by founders, family and friends, who cobble together enough cash to get the idea rolling. Those investments are sometimes followed by individual "angel" investors – a term that dates back about a century – or organized angel networks or funds.

The term angel investor may sound benevolent, but these folks want a return on their capital as much as anyone else. Angels are often former entrepreneurs themselves, and they usually roll out their sleeves and help mentor company executives where they invest. The average angel group investment in Wisconsin is about $260,000.

Angel investments are sometimes followed by venture capital investments, which are much larger rounds of capital. Venture capital funds provide larger infusions of working capital needed to help companies grow and create jobs. Like angels, venture capitalists also provide mentoring, advice and structure that can help emerging companies soar.

Angel, venture and other early stage and growth capital all falls under the heading of private equity, which comes from private investors willing to take a risk in return for a share of the company's "equity" over time. Companies are usually growing and adding jobs throughout those stages. In fact, the Ewing Kauffman Foundation reports that all net new jobs in the United States are created by companies five years old or younger.

Private equity also describes rounds from larger institutional investors, such as leveraged buy-out funds. Buyout funds have sometimes worn the "vulture capitalist" label, correctly or otherwise, but should not be confused with venture capital funds.

In a sense, it's a distinction between Wall Street and Main Street. The buyout funds that sometimes eliminate jobs are a far cry from the angel, early stage and venture groups that work with young companies close to home.

Venture capital has been a driving force behind millions of jobs in the United States and tens of thousands in Wisconsin. Candidates and policymakers alike should be careful to distinguish between investments that create jobs and those that sometimes destroy them.

-- Still is president of the Wisconsin Technology Council. He is the former associate editor of the Wisconsin State Journal in Madison.

Labels: Tom_Still

If you live in certain areas of Wisconsin, the idea of not being able to pull out your smartphone, laptop or tablet and connect to the Internet seems antiquated. With broadband so accessible and so persuasive, why wouldn’t your device quickly search for and pick up the local broadband provider?

Take those same devices into certain, more rural areas of the state, and you’ll have a completely different answer as many Wisconsin communities still lack access to strong, reliable broadband.

Late in 2011, the Wisconsin Technology Council released a report, “Connecting rural Wisconsin: The economic necessity of broadband,” which shows that there is needed improvement in Wisconsin. According to the report, Wisconsin ranks low in specific, yet critical broadband categories when compared to other states. Wisconsin ranked 43rd out of 50 states, the District of Columbia and U.S. territories in the percentage of households with access to broadband at download speeds of greater than 3 mbps.

Even the Federal Communications Commission’s data support the need for improvement. The FCC issued a report in March 2011 that showed that while Wisconsin’s percentage of residential broadband connections at 2000 kbps was nearly 85 percent, that’s only better than 10 other states in the country.

So what are some ways that this issue can be addressed in Wisconsin? The WTC report suggests support of the National Wireless Initiative, a plan supported by President Obama that targets high-speed wireless service for 98 percent of Americans by 2016. Another option is to extend federal broadband grants to leverage private investment. A third focus, according to the report, should be on clearing up any regulatory barriers and avoiding the implementation of new ones.

A fourth way is through regulatory reform, which will reduce barriers to entry in rural communities by broadband providers. For example, the Federal Communications Commission has recommend reforming the Universal Service Fund, which was established in 1997 to help fund federal universal service. This fund, which is based on the Telecommunications Act of 1996, was established at a time when telecommunications technology started its rapid evolution. The current problem is that many of the services currently funded by the USF are based in traditional telecommunication services, not wireless or broadband services.

Regardless of how it is funded, there is a true need for increased broadband penetration in Wisconsin’s rural communities. From encouraging economic development to being a part of telemedicine services, broadband is no longer a luxury service.

Without improved broadband, Wisconsin is missing out on opportunities. According to the report, every $5 billion invested in broadband infrastructure directly creates 10,000 new jobs in the telecommunications and information technology industries alone, not to mention the opportunity it opens up for new startups or businesses considering Wisconsin as a place to relocate. Rural communities that have broadband access also offer high quality of life, an available workforce and prime land for development.

At Wired Wisconsin, we actually track these numbers even more closely in our online Broadband and Wireless Investment and Jobs Tracker, which can be found at http://www.wiredwisconsin.org/investment-map/. During the first quarter of tracking, from June through September of 2011, 12 projects were deployed around Wisconsin, resulting in a total estimated investment of $12.08 million dollars and the creation of 604 jobs. That number will continue to grow as more investment continues in Wisconsin.

We also know that even a slight increase in broadband access can result in a large boost for Wisconsin. A Connected Nation Study projects that a seven-percent increase in broadband access in Wisconsin would result in $2.6 billion in economic impact.

Why would we not pursue this? We’ve identified the need, we know the end result and now is the time to do what we can as a state to encourage broadband expansion.

The Wisconsin Technology Council’s report can be read in its entirety at: http://tinyurl.com/7s6luhb.

-- Nation is executive director of Wired Wisconsin, the Wisconsin-based project of Midwest Consumers for Choice and Competition (MCCC), a non-profit organization of individual consumers interested in technology, broadband, and telecommunication issues with state projects throughout the Midwest region.

Labels: Thad_Nation

It's a foregone conclusion that Gov. Scott Walker won't hit his goal of 250,000 new jobs in Wisconsin by 2015.

It's also a fact that Wisconsin's best interests are served if everyone keeps that ambitious job creation goal firmly in mind.

The rhetoricians who came up with Walker's 250,000 new jobs figure during the 2010 campaign weren't entirely out of touch with reality when they came up with the number. Wisconsin had about 2.7 million non-farm workers in the fall of 2010, so adding 250,000 jobs by the end of a standard gubernatorial term didn't seem impossible. The 250,000 goal represented about 9.2 percent growth spread over four years – or roughly 2.3 percent growth per year.

Aggressive? Yes. Out of line with historic trends? Not completely, given what economists knew at the time. In fact, Walker's Democratic opponent in the 2010 general election, Milwaukee Mayor Tom Barrett, set a goal of creating 180,000 jobs over his four-year term. That's about 1.6 percent job growth per year. So it's not as if Democrats don't buy the importance of setting vigorous economic goals.

If a recall election takes place sometime in 2012, no Democratic candidate will run on a platform of being timid about job creation. "Let's settle for less" doesn't make for a winning bumper sticker, even if it does fit. In politics as in business as in life, people respond to clear, aspirational goals.

So the real questions become how many jobs can Wisconsin realistically create over time – and what are the right strategies for getting there? Here's what we know:

* According to the U.S. Bureau of Labor Statistics, there were 47,000 fewer jobs in Wisconsin in October 2011 than there were in October 2001. That's a 10-year growth rate of minus 0.2 percent, which compared to 0.0 percent growth in Minnesota, minus 0.5 percent in Illinois, minus 0.1 percent in Iowa and minus 1.4 percent in Michigan. In short, flat job growth has been a regional phenomenon tied largely to the recession that began in late 2008 but also reflective of the manufacturing downturn that began much earlier.

* The Wisconsin Department of Revenue predicted in October, based on its internal modeling, that 136,000 would be added to the state's private payrolls by 2015. When the final job figures for 2011 are crunched, Wisconsin will show a modest net gain for the year – but the pace must quicken to achieve even the Revenue Department's prediction.

* Wisconsin may already be faring better than expected on job creation, at least in comparison to what other states are doing. A recent report by Economic Modeling Specialist Inc., a national firm headquartered in Idaho, examined all 50 states from the perspective of "expected" job creation in 2011 to actual performance. "Boom states" – mostly in the Great Plains and Rocky Mountain regions – were best at beating expectations. Wisconsin ranked 22nd on the list, adding 10,745 more jobs than a national formula might predict.

Critics can pound Walker all they want for setting a lofty goal, and it was risky for him to suggest state policies alone would be enough to trump national and international mega-trends. It's not Scott Walker's fault that parts of the European Union are an economic basket case or that Congress and the White House can't come to terms on the budget deficit – but it was his mistake not to anticipate how external factors could wash up on Wisconsin's shores.

So, what's next? The 250,000 goal can be second-guessed forever, and probably will be in a recall-election environment. But there's little doubt that Wisconsin needs a stronger economy and strategic job-creation strategies. Democrats and Republicans alike should be able to agree on that. As the Legislature returns this month, there will be several opportunities for both sides to work together on key bills that can help the private sector do what only it can do – create jobs.

Barring an economic miracle, Wisconsin won't have 250,000 new jobs by 2015. But the goal should remain as a constant reminder that everyone has a stake in creating a more productive, prosperous Wisconsin.

-- Still is president of the Wisconsin Technology Council. He is the former associate editor of the Wisconsin State Journal in Madison.

Labels: Tom_Still

So long, 2011, a year in which the economy flirted with recovery, and welcome to 2012, a year that may spring out of the blocks but encounter hurdles down the track. Here are some trends worth following.

Turning entrepreneurs into job-builders: Even as other economic indicators rebound, the unemployment rate seems stuck around 8.5 percent nationally and 7 percent in Wisconsin. Then again, the definition of “back to work” is changing. More people are employing themselves as they pursue start-up ventures launched when their 9-to-5 careers faded.

Some reports show Wisconsin is slowly escaping the bottom tier of states when it comes to creating new businesses, thanks in part to organized mentors, angel investors, small-business incubators business and entrepreneurial networks.

Connecting Wisconsin with venture capital: A bill creating a state-leveraged venture capital fund will likely surface in the state Capitol in January, as key members of the Senate and Assembly appear near agreement on major provisions.

Such a bill would make the state a limited partner in a “fund-of-funds” that would help turn promising young companies into larger firms. About 30 states have adopted similar strategies over time. Success for start-ups won’t happen overnight, however, so let’s hope the state is a patient investor.

Building a NextGen Natural Resource economy: Striking a balance between creating jobs and protecting the environment will pose challenges for policymakers. State lawmakers will consider expediting a proposed iron mine in Iron and Ashland counties, where a need for jobs is countered by concerns for water quality. Another emerging industry is mining to produce sand needed to extract natural gas and oil through hydraulic fracturing of deep shale formations. Again, the main issue is protecting groundwater – not only in the sand mines, but in gas drilling sites around the country.

Wisconsin can attract and retain businesses with its clean and abundant supplies of water – something not every state or region can claim. The Public Service Commission will continue to pursue innovative water pricing strategies, including rates that promote efficient water use and economic growth. The PSC also hopes to work with utilities on water-metering technologies that can help evaluate demand patterns and trends. Wisconsin is a hub for water technology solutions through emerging companies, academic research and smart regulations. Let’s use that combination to our advantage.

Encouraging trade and foreign direct investment: Wisconsin has benefited from a booming export economy, especially when it comes to high-quality manufactured products, medical technologies and food products. When the 2011 figures come in, don’t be surprised if Wisconsin shatters the 2010 record of $19.8 billion in total exports. Also vital is foreign direct investment, which is globalizing Wisconsin’s economy in ways that create jobs, expand supply chains, open the doors to new markets and provide needed investment dollars.

Wisconsin cannot possibly consume or sell everything it produces at home or even nationally. That’s why exports and foreign investment are flip sides of the same coin. They represent Wisconsin’s ability to build, produce and grow what the world needs – and to attract investment from markets that understands the state’s strengths.

Educating tomorrow’s workers now: Most colleges and universities in Wisconsin continue to see enrollment surges as people realize education is often the pathway to “knowledge economy” jobs. The trick is starting the education process earlier, which explains public and private efforts to encourage more middle- and high-school students to take science, technology, engineering and math courses. Some states have committed to STEM education in significant ways; Wisconsin should do the same if it wants to counter a coming demographic crunch as the “baby boom” generation retires and there are shortages of skilled workers.

On the other end of the spectrum, expect higher education to examine how efficiently it moves technology from the laboratory to the marketplace. Some states are taking the speed bumps out of their technology transfer processes; Wisconsin can do the same.

Making technology work for people: If 2011 was the year when Wall Street and Big Banking heard loudly from the man and woman on the street, perhaps 2012 will be the year when Big Tech gets an earful.

Privacy concerns continue to dog Facebook. Proposed “piracy” legislation may threaten the Internet. Attempts to ban all cell phone use by drivers are possible, given the National Transportation Safety Board’s recent recommendation. The Obama administration must decide if it really wants to extend broadband coverage – or simply block mergers. And Amazon.com appears intent on turning brick-and-mortar retailers into showrooms via consumers armed with price-check apps and Amazon discounts for doing the company’s research. The good news: There’s a fresh new year in which to sort it all out.

-- Still is president of the Wisconsin Technology Council. He is the former associate editor of the Wisconsin State Journal in Madison.

Labels: Tom_Still

Gov. Scott Walker has followed through with his promise to enhance Wisconsin's business climate through the adoption of common sense lawsuit reforms. Early in his tenure, Governor Walker signed comprehensive lawsuit reforms and most recently he signed three more needed legal reforms.

Coupled with tax relief, and regulatory reforms passed by the Legislature and signed into law, Governor Walker is ensuring that Wisconsin is open for business.

Lawsuit reforms protect small, medium, and large businesses from meritless lawsuits and ultimately reduce costs. For both employers and employees, this is welcomed news.

That is because our current tort system is too expensive. According to the actuarial firm Towers Watson, the cost of the U.S. lawsuit system in 2009 was $248.1 billion, which is 1.74% of the U.S. gross national product, or $808 per person.

Our state's small businesses, the backbone of our economy, are often disproportionately affected by excessive lawsuits.

One can argue that regulations, taxes, and insurance are the price of owning and operating a business, yet just one baseless lawsuit – or even the threat of a lawsuit – can be the unforeseen event that bankrupts a small business, putting people out of work, and personal assets in jeopardy.

Excessive, unpredictable lawsuits, whether decided in the courtroom or outside the courtroom regardless of guilt or responsibility, almost certainly means the loss of jobs, the loss of innovation, and the stifling of economic growth.

According to an Institute for Legal Reform study titled, Tort Liability Costs for Small Business, 62% of business owners and managers polled said they make decisions to avoid lawsuits. Sixty-one percent said these decisions make their products and services more expensive. More than a third surveyed had been sued, and 73% of those sued said that their business suffered due to the time-consuming nature of litigation.

Personal injury lawyers say lawsuit reforms are anti-consumer. That's not true. Rather, the recently enacted reforms place Wisconsin back into the mainstream compared to other states.

The comprehensive lawsuit reforms signed early this year addressed two 2005 Wisconsin Supreme Court decisions that harmed Wisconsin's business climate. One decision established a "guilty-until-proven-innocent" standard for businesses in certain cases, while the other made it easier for plaintiffs and their attorneys to win jackpots by lowering the standard for punitive damages. The new law overturned these poorly decided opinions.

Another reform put an end to unreliable expert testimony and evidence by requiring Wisconsin courts to adopt standards requiring testimony and evidence be based on sufficient facts and data. Known as the Daubert standards – named after the U.S. Supreme Court decision creating the protections – Wisconsin joined over 30 states plus the federal court system in adopting these new evidence requirements. The reform gets junk science out of Wisconsin court rooms.

In the most recent special session, Gov. Walker signed a bill into law which protects landowners – businesses, homeowners, renters, and non-profit organizations – from expanded liability for injuries to trespassers.

Another new law brings Wisconsin in line with other states relating to the interest rate charged against defendants for judgments paid to plaintiffs. Prior to the new law, defendants were forced to pay a plaintiff an exorbitant 12 percent interest from the time the case was filed to the time the final judgment was paid. The new law makes it a variable rate, which is based on the existing federal prime rate, plus one percent

In addition, Gov. Walker signed into law a number of criteria courts must consider when determining attorney fees awarded in certain types of cases. Prior to the new law, these "fee-shifting" cases – where a plaintiff attorney can obtain court mandated attorney fees from the defendant – resulted in a cottage industry for some plaintiff attorneys who have walked away with hundreds of thousands of dollars in attorney fees for relatively small claims.

Wisconsin's newly enacted legal reforms will go a long way in protecting employers for unjustified legal costs. This in turn allows employers to invest in their business, boost current employee benefits, and expand their businesses, and most importantly, hire new employees.

In the end, it's about jobs. And the new legal reforms are helping to pave the way to a better business climate in our state.

-- Smith is Wisconsin director of the National Federation of Independent Business and Buchen is senior vice president -- government relations for Wisconsin Manufacturers and Commerce. Both are executive officers of the Wisconsin Civil Justice Council.

Labels: Bill_Smith, James_Buchen

LA CROSSE – The 250 or so people who gathered this month for the 40th annual meeting of the La Crosse Area Development Corp. aren't without their differences. The crowd included business leaders and educators, Republicans and Democrats, "townies" and academic gowns, and even a few politicians who have butted heads in recent elections.

Fortunately for La Crosse, a picturesque Mississippi River city of 52,000 people, those differences aren't necessarily divisions.

With a jobless rate of 5.2 percent, more than 2 percentage points lower than the statewide rate, La Crosse and surrounding La Crosse County appear to be weathering the enduring economic storm better than many places in Wisconsin. The question is "Why?"

Perhaps it's the above-average education rate for its labor force. Or the low cost of living, which runs 10 percent or more below the U.S. average. Or its competitive health-care sector. Or the healthy mix of homegrown companies such as Kwik Trip, Trane, Logistics Health, Reinhart FoodService and City Brewing, which now has more brew house workers than the old G. Heileman Brewing Co. at its peak.

Or maybe it's simply that people in La Crosse understand how to disagree without being constantly disagreeable.

Getting along with its neighbors have been a consistent story line in La Crosse, where organizations such as LADCO and the 7 Rivers regional alliance have often looked beyond political boundaries to identify problems and offer solutions. One speaker at the Dec. 14 LADCO meeting was Jerry Miller, the mayor of nearby Winona, Minn., who talked about the prospects for improved passenger rail service across state lines. No Gopher-Badger rivalry there.

It's not that La Crosse is a boom town. Job growth has been less than 1 percent per year over the past decade, and worker skills and job openings don't always match. But it has proven more resilient than many Wisconsin communities – and it may offer lessons for parts of the state that continue to struggle with plant closings and job losses.

"There are a lot of examples of collaboration here with business, government and beyond, which is all the more important in this tough fiscal environment," said Jim Hill, LADCO's executive director.

While LADCO is focused in La Crosse County, the 7 Rivers Alliance includes 18 counties in three states (Wisconsin, Minnesota and Iowa) and assists with branding, marketing and other joint economic development goals.

Not everything goes smoothly, of course, especially when local governments compete over potential corporate additions to the property tax base. However, most observers agree the regional approach provides a foundation for work on knotty issues.

In addition to 7 Rivers, other regional organizations in Wisconsin include Thrive in south-central Wisconsin, Milwaukee 7 in southeast Wisconsin, NEW North in northeast Wisconsin, Centergy in central Wisconsin, Momentum West in west-central Wisconsin, and Grow North in the northern tier of counties. All are working with the Wisconsin Economic Development Corp., the public-private successor to the state Department of Commerce.

The challenges range from region to region – for example, central Wisconsin is coming to grips with continued losses in the paper industry – and so do the opportunities to build specific clusters.

Long a favorite of economists and business development professionals, economic clusters are generally defined as a concentration of interconnected businesses, suppliers and other institutions in a particular field. Clusters are sometimes geographic – and sometimes defined by trade patterns that cross state, national and even international borders. Companies in clusters most often act as competitors, but sometimes they're collaborators within a larger supply chain.

In Milwaukee 7, for example, there's interest in helping grow the water technology, design, medical research and energy technology clusters. In the Madison-based Thrive region, targeted sectors might be health care and life sciences, agriculture and food processing. In the NEW North, wind, biofuels, data centers, marine manufacturing and defense have emerged.

Branding those regions and their clusters can be tricky, Hill cautioned.

"The piece of regionalism that is most attractive is marketing, but I think it's important to be careful about the brand you choose," Hill said. "It can't just be a feel-good exercise. You name your kids to feel good. You name your products so someone else around the world knows what it is and how to find you."

Thanks to a cooperative structure and people who make it work, the La Crosse area is doing a better job of getting found.

-- Still is president of the Wisconsin Technology Council. He is the former associate editor of the Wisconsin State Journal in Madison.

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While creeping along in holiday traffic on the way to grandma’s house later this month, take comfort that despite detours and fender-benders, you’ll eventually get there. For millions of American small-business owners, arrival at their final destination, success, is not assured. The way is often blocked by complex federal regulations and cordoned off with red tape.

For years, small-business owners pleaded with Washington to reduce regulatory confusion and make rules more transparent. Research by both the National Federation of Independent Business and Gallup found that government regulations are causing the biggest bottlenecks small businesses face today.

Greater clarity and certainty could go a long way towards helping owners pull the nation out of its economic ditch and crank up meaningful job creation. But more often than not, government agencies create one-size-fits-all mandates that do more harm than good, ignoring Congress’ intention when it passed the Regulatory Flexibility Act over three decades ago.

America’s regressive regulatory process is not just discouraging and unmanageable for Main Street entrepreneurs, it’s costly too. Small businesses spend 36 percent more per employee per year to comply with federal rules and regulations than larger businesses, reports the U.S. Small Business Administration, whose research determined that the smallest firms cough up an estimated $10,585 for each worker annually.

But an opportunity to clean up the mess is coming. Congress is now considering legislation to provide a sensible approach to rule-making.

The bill, dubbed the Regulatory Flexibility Improvements Act, H.R. 527, has already passed with bipartisan support in the U.S. House of Representatives, and the Senate is expected to consider similar legislation soon. It would strengthen the process by making federal agencies conduct thorough studies of requirements to determine the economic burden they might dump on small firms. And, the bill would require all agencies to assemble Small Business Advocacy Review panels to help bureaucrats specifically understand how the regulations they craft affect small businesses. In addition, the measure would give SBA’s advocacy office authority to set firm standards for flexibility analysis.

As with each important legislative initiative, support strongly depends on the grassroots backing from folks back home. This offers an essential moment for owners and their employees to personally inform their representatives of the importance of this bill. NFIB has alerted Capitol Hill lawmakers that their decisions will be recorded as small-business key votes and fully communicated to voters in each congressional district.

There are few issues on which all members of Congress can agree these days, but helping jump-start small business’ ability to grow and create jobs is one that should have no opposition. Passing H.R. 527 would sweep aside long-standing regulatory barriers that are keeping America’s free enterprise machine in low gear and send a signal that Washington values the economic contributions of small business.

-- Danner is president and CEO of the National Federation of Independent Business, which represents 350,000 small-business owners in Washington, D.C. and every state capital.

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