CRW • Corporate Report • Wisconsin's Business Magazine

Despite gloomy economic outlooks, Milwaukee region entrepreneurs like Randy Spaulding, founder and CEO of Spaulding Clinical Research LLC of West Bend, have found a silver lining in high-growth start-up ventures.

“This is nuts with the economy the way it is,” says Spaulding, who’s pharmaceutical testing company officially opened for business in the former St. Joseph’s Community Hospital in September 2008 and has already landed several drug testing studies. “We got through all the start-up work, the investment deals and now we’re making a name for ourselves.”

The Milwaukee region’s commitment to foster the entrepreneurial spirit is one of the bright spots that can be found in these dark economic times. It is one piece of a three-prong approach aimed at attracting companies to the area, supporting those already here and helping entrepreneurs launch new businesses to help generate jobs in a troubled economy, says Jim Paetsch, director of corporate relocation, expansion and attraction for Milwaukee 7, a regional, cooperative economic development platform for the seven counties of southeastern Wisconsin: Kenosha, Milwaukee, Ozaukee, Racine, Walworth, Waukesha and Washington.

According to Paetsch, much of the region’s long-term growth will come from its significant base of businesses, more than 50,000 companies, so it’s critical to focus on retention for the remainder of 2009 and into 2010. “We need to pay attention to the issues they have, make sure we understand where the threats are for those companies and where the opportunities exist,” he says.

That being said, attraction also ranks high. Milwaukee 7 strives to both draw new companies as well as retain existing ones. “We have to do both of these things, and do both of them well,” Paetsch says. “The state of the economy is certainly making this more difficult. But there are companies looking at making capital investments and employing people. We need to make sure we are aware of those opportunities and are responding to them.”

Entrepreneurial growth is also key, because as Paetsch points out it is shortsighted to put all of the region’s economic eggs in one basket. He adds area offerings, such as BizStarts, have been an excellent forum for encouraging business start-ups, continuing the region’s rich history of drawing companies like Quad Graphics, which originated in Pewaukee 35 years ago. “There are many examples of companies that started small, and started here, and have grown into significant economic entities,” Paetsch says.

One organization hoping to continually spur high-growth business development in the region is BizStarts Milwaukee, which has made its mission creating a vibrant, innovative and prosperous business climate in the M7 region by inspiring, nurturing, connecting and celebrating entrepreneurs and their companies.

The organization encourages innovation and risk taking by connecting entrepreneurs with the resources, content and contacts they need to launch new enterprises. To that end, says John Torinus, BizStarts president, the organization has advanced four initiatives in its inaugural year:

BizStarts Connect, which strives to connect people in the entrepreneurial space with each other and service providers offering everything from IT to investor assistance. The offerings in this area include an online community for entrepreneurs and quarterly face-to-face networking events.

BizStarts Learn, a consortium of area educators, launched in March, has the region’s 20 colleges sending representatives to share best practices with potential entrepreneurs.

BizStarts Venture Track, which puts entrepreneurs through Fast Track Tech, a 10-week course that helps them prepare investor-ready business plans. This venture kicks off this month.

BizStarts Buzz, the final piece of the puzzle, incorporating a public relations and marketing effort to encourage business start ups to work with BizStarts to get the job done.

Since organizing in 2008, the venture has provided a launching pad for businesses in the region. “And we’re not talking about lemonade stands,” says Torinus. “We are talking about high-growth businesses that will help stimulate the economy.” The businesses include everything from Spaulding’s company to Paradigm Sensors, a firm in the city of Milwaukee, positioned to help assure the quality of biodiesel fuel with a handheld biodiesel analyzer, and MPP Group of Wauwatosa, a pharmaceutical development organization.

“I wouldn’t be here without BizStarts,” Spaulding says. “I had the right idea, however you can have the greatest idea in the world but if you can’t get the money and the backing behind you, it won’t go anywhere.”

Attracting attention
Fortunately, the spotlight shines brightly on the Milwaukee region by drawing business attention to the area. The area is making a name for itself as the place to be, nabbing national headlines as an up-and-coming community for new developments. Thanks to a potent recipe mixing hearty helpings of money, leadership, commitment and vision, the Milwaukee area recently netted a prestigious ranking from Forbes as one of the Top 10 up-and-coming tech cities. In a time of escalating layoffs and soaring business struggles, Forbes also named the area as one of the Top 10 cities for job growth in 2009, highlighting its healthy outlook for job growth and its strikingly low unemployment rate of 4.8 percent, compared to a 7.6 percent rate nationwide. And in December, Milwaukee skyrocketed to 16th on MarketWatch’s 50 best U.S. metro areas for business, outpacing cities such as Austin, Texas, Los Angeles and Portland, Ore.

Affordable land and leasing costs; low utility rates; an educated workforce; lower wages and taxes; and easy access to financing, technical assistance and efficient transportation are among the reasons for this positive recognition, states Paetsch.

A high quality of life also contributes to attracting and retaining talent. “A lot of areas talk about quality of life, we’re one of the few places that can actually deliver it,” Paetsch says. Besides being a nice place to raise a family, people have immediate access to many amenities at a reasonable cost.

Health care happenings
A significant draw is the region’s ample access to affordable and high quality health care. Testament to this is the recent acknowledgement by Parents magazine naming Children’s Hospital of Wisconsin in Wauwatosa as the third-best children’s hospital in the nation.

Aurora Health Care also ranks as a major player in the health care arena, committed to providing quality health care at its existing facilities and bringing medical care to areas where greater access benefits patients. The not-for-profit health care organization continues this commitment with construction of two hospitals fully underway — one in Grafton and one in Summit. These two projects mean jobs and economic growth for greater Milwaukee, even with economic concerns and an uncertain outlook for many health care systems. Construction on Summit’s $189 million, 110-bed hospital in Waukesha County and Grafton’s $184 million, 89-bed facility in Ozaukee County are well underway, with targeted completion dates of early 2010 and late 2010 respectively.

The construction stirred up some controversy early on because of the projects’ close proximity to existing hospitals. Critics contended the new facilities would duplicate existing services and drive up health care costs. But Aurora spokesperson Peter Balistrieri states this will not be the case, indicating residents in these communities will have the opportunity to choose among high quality products and services close to their home. “Both the town of Summit and the village of Grafton have welcomed us with open arms,” he says. “We are very judicious and conscientious with our resources.These hospitals are an integral part of both communities.”

The hospitals will also give the area an economic boost by creating more jobs. While some of those employees may come from Aurora Wilkinson Medical Clinic, Balistrieri estimates approximately 1,300 positions will be created. “That’s a marked increase for health care employment in southeastern Wisconsin,” he says, noting the organization is beginning its recruitment efforts for a handful of positions for the medical center in Summit and has already received nearly 5,000 online inquiries from individuals expressing interest in employment.

“Aurora is a great place to work,” he says. “We are being very diligent in preserving jobs in all appropriate ways, even if it means cutting back in a number of areas that do not directly impact patient care.”

Storm clouds rolling in?
While many bright spots exist in the Milwaukee region, not everything is sunny. Milwaukee voters recently passed a mandatory sick leave policy requiring large businesses to provide nine days of sick leave and small businesses to offer five days of sick leave to employees. While the plan is aimed at helping employees, in the long-term some fear it may threaten the employment they have.

Steve Baas, director of governmental affairs for the Milwaukee Metropolitan Chamber of Commerce (MMCC), calls the ordinance a job killer and notes he has heard from dozens of businesses about the sometimes hundreds of thousands of dollars in new costs it will impose on them from a benefits and administrative standpoint. He says the ordinance carries an impact at opposite ends of the spectrum. Small companies with very tight margins may be put out of business and large businesses may incur considerable costs carrying out the mandate.

The law has already caused some businesses planning to move into the city of Milwaukee to rethink their plans and locate their operations elsewhere. And more than 10 neighboring communities have already blocked mandatory sick leave in their area sending the message that they will take those companies looking for a new home.
“These communities want to make sure this doesn’t seep over their borders,” Baas says. “They want to make it perfectly clear to employers that if they locate there, they won’t have to put up with this headache.”

The MMCC has filed a lawsuit challenging the legality of the mandate. Baas states the ordinance is incredibly vague as written, raising more questions than answers. One area challenged in the case is the statement that employers cannot implement “unreasonable notification requirements” for employees using their sick leave. “The question is what is unreasonable,” he says. “This is something that will likely be litigated again and again if we are not successful in overturning this ordinance because companies may have different thresholds for reasonable given their unique situations.”

The ordinance’s territorial impact also raises red flags, he says, noting that no matter what a community like New Berlin does in terms of their own ordinance, this mandate may affect them as well. The law states a business owner in another community with employees working in the City of Milwaukee will need to meet the new requirements. “That’s clearly not legal and it’s one of the grounds we’re challenging,” Baas says. “It is also why we’ve had Chambers of Commerce and businesses outside the city joining us in the lawsuit. They realize this will impact their businesses as well.”

Currently, the ordinance remains tied up in litigation as Milwaukee Circuit Court Judge Thomas Cooper granted an injunction blocking its implementation until the suit runs its course. Judge Cooper will hear the case on May 11 with a decision expected in mid-June. However the appeals process may take far longer, warns Baas, who predicts the case will eventually make its way to the Wisconsin Supreme Court.

Focusing on the future
But mandatory sick leave aside, national accolades, business start-up initiatives, health care ventures, a commitment to businesses and a high quality of life, all point to the Milwaukee region forging on as an attractive place for entrepreneurs like Spaulding to operate their businesses.

Spaulding says organizations like BizStarts and Milwaukee 7 will provide business people much like himself with the impetus to launch a business and thrive — even in a struggling economy. These organizations provide business owners with the help they need to launch and grow their businesses, and inject needed life into the economy.

“We have to take the people with the ideas, nurture them and get them out there,” Spaulding says. “That’s jobs. That’s putting Wisconsin on the map. Spaulding Clinical is bringing people from around the country and around the world to the area, and we’re just one example of what can happen.”

The nation may be seeing a slumping economy and a soaring unemployment rate but to date the Milwaukee region has not. Its focus on attracting, keeping and building businesses has prevented that from happening.

By Ronnie Garrett

Ronnie Garrett is a freelance writer based in Fort Atkinson, Wis. She may be reached at garrettnco@yahoo.com or www.garrettncostudios.com.

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