• WisBusiness

Friday, October 14, 2011

A short course on how Wisconsin can attract businesses from outside

By Tom Still
LA CROSSE – Darin Buelow of Deloitte Consulting’s Chicago office is a Badger in almost every way that counts. He’s a Madison native, married a Madison native, graduated from UW-Madison and describes himself as a “proud Green Bay Packers shareholder” – an attribute he may not flaunt every day while strolling down on Wacker Drive.

But hailing from Wisconsin doesn’t stop this veteran site selection expert from standing back and assessing the state, warts and all, when it comes to attracting businesses from outside its borders.

Being the Badger with an outsider’s view was Buelow’s role Tuesday when the board of directors for the Wisconsin Economic Development Corp. met to hear about the organization’s approach to fostering economic growth. It’s a plan that will include working with entrepreneurs, cracking into global markets, attracting foreign investment, bolstering community infrastructure and attracting companies and jobs to Wisconsin.

Buelow is a principal in Deloitte’s Real Estate and Location Strategy practice, which works with companies worldwide in determining where they might want to expand, relocate or otherwise grow. He was a co-author of a 2010 study that recommended, among other things, transforming the Wisconsin Department of Commerce into what is now the WEDC.

In La Crosse, he talked about what has taken place since “Be Bold Wisconsin” was written, as well as the state’s strengths and weaknesses when it comes to attracting companies from other states or nations. It wasn’t a monochromatic picture.

Buelow said companies look at a mix of factors when it comes to location decisions, with benchmark operating conditions being business climate rankings; recent project activity; entrepreneurship; education attainment; air access and labor relations. Benchmark operating costs include labor for production; labor related to information technology; taxes; real estate costs; utilities and incentives.

Wisconsin’s strength are large employment concentrations in industries such as medical device, agriculture, food processing and financial services; competitive labor costs in most industries; strong educational attainment and good workforce quality; robust utility capacity at competitive costs and relatively low real-estate costs, meaning office space in metro areas.

Buelow said Wisconsin’s challenges are not enough venture capital, lack of a statewide “shovel-ready” sites program, moderately influential state incentive programs and generally poor perception as a business destination – whether real or perceived.

While Wisconsin may pride itself on good highways and transportation systems, Buelow said, it’s an “average, at best, solution for most industries.” Why? Lake Michigan is a natural barrier for companies that sometimes choose Indiana, Illinois or Iowa to be closer to suppliers and customers. The state has a low natural disaster risk – but a perception of slow regulatory permitting. While its skilled workforce is an advantage, Buelow said, there is a perception of risk with unionized work stoppages.

Finally, he said, Wisconsin has some new tax and start-up incentives to offer, but they’re not yet well known among corporate site experts.

Buelow listed four examples of companies making site decisions – one in Indiana, one in Illinois and two in Wisconsin. In each case, an “available, suitable site” was instrumental. Each process involved a company looking at dozens if not scores of sites and slowly narrowing the list based on other factors.

The Wisconsin examples were Ingeteam, a Spanish company that selected Milwaukee for a wind generator and solar inverter plant, and SEDA, an Italian cup and packaging manufacturer that selected Racine County. Both were expansion deals closed in the final year of Gov. Jim Doyle’s administration; both are recent examples of how Wisconsin can attract foreign direct investment if it’s paying attention. With more “shovel-ready sites,” Buelow said, Wisconsin could win more of the same.

“We need to do a better job of letting the world know what we have, and how we’re addressing our challenges,” said Paul Jadin, WEDC’s chief executive officer. He said Buelow’s assessment reminded him and board members why WEDC was created in the first place, highlighted gaps in the state’s toolkit – such as venture capital and certified sites – and linked WEDC’s emerging strategies to an unvarnished outside view.

Attracting companies from elsewhere will be less important over time to Wisconsin than growing start-ups in local dirt and retaining those companies that already call Wisconsin home. But in a competitive world where companies decide routinely to be close to their customers, their supply chains or the right workforce, Wisconsin can’t afford to sit on its hands.

-- 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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