CRW • Corporate Report • Wisconsin's Business Magazine

On a good day, the waters of the Great Lakes are a striking blue, shimmering in harbors and off the bows of boats. On stormy days, that same water can be a brackish gray. But a growing number of business leaders are looking at that water and at its freshwater industries and seeing something else: Opportunity.

“Water is the future oil,” says Jack Bails, the Michigan-based chairman of the Alliance for the Great Lakes, North America’s oldest Great Lakes citizens’ organization. “It’s becoming scarcer, and it is extremely important. Because of that, there are a lot of eyes looking at the Great Lakes, to see what we can do.”

And Milwaukee has been responding. In 2007, the Milwaukee 7 established its own Water Council, a collaborative organization with members drawn from business, academia and government with a mission to make the seven-county Milwaukee region a world water hub for freshwater research, economic development and education.

Much has happened since its inception, says Badger Meter CEO Rich Meeusen, co-chair of the Milwaukee 7 Water Council.

“I’m very pleased with what has happened; it’s moving much faster than I anticipated,” he says.

During the past year, progress has been made on a number of fronts. In March 2008, Milwaukee representatives met with members of the United Nations International Secretariat to discuss how the government, private and civil sectors could work collaboratively to tackle the complexities of water management. In April 2009, Milwaukee was named a U.N. Global Compact City, the second in America and only one of a handful throughout the world. The recognition by the U.N. was due specifically to the area’s recent and continued developments in freshwater science and technology.

“This was a big development for us,” says Claus Dunkelberg, a water industry specialist with the M7 Water Council, who adds that the exposure through international media has helped brighten the spotlight on Milwaukee. “We’re only one 14 cities around the world to be named a U.N. Global Compact City.”

The exposure has also helped bring about more interest from companies engaged in or thinking of pursuing water-related technologies, both within the Milwaukee region and outside of it.

“One of our roles has been to identify emerging companies, working with them and helping them make critical connections,” says Dunkelberg. “We are fielding more calls; interest is growing.”

A natural evolution for Milwaukee
The global needs of a 21st century world actually have much in common with those found more than 100 years ago in emerging Milwaukee. Ironically, it’s that evolution that has helped position Milwaukee for the future.

“If you go back about a century and look at the businesses that were started in Milwaukee, they located here because of our access to the Great Lakes,” says Meeusen. “Look at the breweries – Miller Brewing uses four gallons of water for every gallon of beer it produces.”

In turn, many of the machine shops that sprang up in early Milwaukee supported those same industries.

“These are companies that learned a lot about water flow,” explains Meeusen. “In the early 1900s, companies like Badger Meter and A.O. Smiths followed. Water technologies feed on each other over time.”

Meeusen had what he called a “eureka” moment about three years ago, when he invited Paul Jones, president of A.O. Smith over to see Badger Meter’s research lab, which has the largest flow lab in North America.

“A.O. Smith has a large hot water research lab, and we realized we might be on to something, letting our engineers tour and do some cooperative research,” he says. “From there, I started thinking about all the water technology industries located in southeastern Wisconsin.”

The initial list started at about 40 and continued to grow. In 2008, UWM’s Director of Workforce Development and Urban Planning Professor Sammis White released a more extensive list, noting that there are more than 100 existing freshwater-related industries in the Milwaukee area.

With that discovery, many of those companies have become involved in the M7 Water Council and its ongoing efforts.
“What’s interesting about this initiative is that it isn’t just industry,” says Dunkelberg. “It also involves education, and there’s been quite a bit happening in that respect during the past year.

Collegiate collaboration
Though there’s nary a view of Lake Michigan from the top floors of UW-Whitewater’s newly constructed Timothy J. Hyland Hall, the 55 miles between the rural campus and Milwaukee was recently bridged with the announcement of the school’s new venture to train students to work in water-related industries.

“Members of the M7 Water Council originally approached us to see if we would be interested in the program,” says Kirsten Cosgrove, UW-Whitewater associate professor of biology and coordinator of the school’s Integrated Science-Business Major. “They were looking for a school that would be able to bring business and water science together programmatically.”

“The M7 encompasses a seven-county region, and Walworth County is part of the M7,” says Meeusen. “UW-Whitewater is a major university in the M7 region and it has the largest business school in the state.”
UW-Whitewater already had an Integrated Science-Business Major in place, and Cosgrove says it seemed like a very good fit to develop an emphasis for students who could pursue careers in the growing water industry. In addition, the school has a number of existing faculty members working on water-related issues, including one Lake Michigan research study.

“The prospects for graduates are very good,” says Cosgrove. “Water is becoming one of the world’s most critical and most challenged resources, and we believe there will be a tremendous growth in demand for graduates with this type of academic background.”

The program is designed to give students a basic background in water and environmental law, natural resources and environmental economics, as well as aquatic biology, chemistry and ecology. The program will begin enrolling students this fall, and because many students have already taken relevant courses, the first water management specialists are expected to graduate within the next year.

Students interested in pursuing advanced degrees in the industry need to look no further than Milwaukee with the recent announcement that starting this fall, Marquette University Law School is launching a new curriculum in water law.

“Establishing a specific water law program for students is another piece of the larger puzzle of positioning the Milwaukee region as the worldwide destination for water policy and research,” says Marquette Law School Dean Joseph D. Kearney.

Developments also continue at UW-Milwaukee where the push to expand the university’s existing WATER Institute into a new School of Freshwater Sciences has received approval from the UW Board of Regents. UWM’s School of Freshwater Science also received funding for a new facility as part of the $240-million Milwaukee Initiative funding package in Governor Doyle’s 2009-2011 budget; efforts are focused now on finding a suitable spot along Milwaukee’s lakefront for the facility.

While the WATER Institute’s research is primarily focused on Great Lakes freshwater ecology, aquaculture, aquatic ecology and so forth, WATER Institute Director Val Klump says that his institute’s work does have a certain synergy with commercial water technology.

“Neither exists in a vacuum,” he says. “Lake science does have some applied aspects. In many respects, the private sector has gotten out in front of the university on this. There’s an urgent need for new technologies, and we know that if we don’t do it, someone else will.”

Those technologies ripe for development range from water filtration and water quality to aquaculture.

“The Great Lakes region comprises 20 percent of the total U.S. seafood consumption, and produces less than 3 percent,” offers Klump as an example. “One of the biggest seafood exporters now is China, and the U.S. actually has a multi-billion trade deficit on the import of seafood.”

Combine those facts with the prediction that within the next 20 years 50 percent of the world’s seafood production will be done through aquaculture, and the fact that wild populations of seafood are expected to collapse within 40 years and there is opportunity to be found in the Great Lakes and in technology developed here that can be applied to other freshwater locations in the country.

But it isn’t going to be easy.

“Our major challenge is to reconcile the inherent conflict between human beings and environmental sustainability,” said Klump. “The Great Lakes provide a major opportunity for us, not just research based, but also for the business community. We can get to a sustainable future with new technologies and new strategies.”

Constructive criticism
Though the efforts of the past two years have certainly moved Milwaukee into the freshwater spotlight, it is already possible to assess the challenges and strengths of the efforts.

“We definitely need to develop and utilize our water resources,” says Donald Gallo, an adjunct associate professor at MSOE and an environmental attorney at Reinhart Boerner Van Deuren’s Waukesha office. “But are we doing a good job? We are … and we aren’t.”

Gallo sees a lot of the water technology efforts focused on the water-meter industry and water-use products, such as those manufactured by Badger Meter and A.O. Smith.

“I think the opportunity we need to work on is that focused on the food industries, on the ‘wet’ industries,” he says. “If we could make Milwaukee attractive to water-dependent industries – and we have abundant, good freshwater – that is worth pursuing.”
Gallo’s point goes beyond water access. He cites Palermo’s Pizza, a pizza manufacturing business that relocated into Milwaukee’s Menomonee River Valley, as an example.

“The real benefit to bringing companies like this to the city is jobs, which is a huge issue in Milwaukee,” he says. “Good jobs that provide living wages – like those found at Palermo’s -- can help cure a lot of the problems that are happening in the city. We need that broader vision because there is a tremendous social benefit to it.”

Meeusen has heard the criticisms before and understands them.

“There has been talk about the food industries, the ‘wet’ industries and about putting all the eggs in one basket,” he says of the M7 Water Council’s current focus. “But that’s not my world. I’ve picked up the baskets that I know and I’m running with them. We need other people to champion those industries, and I encourage them to join us. Nothing would make me happier than to see that.”

Gallo also is concerned that the efforts are focused on new technologies and new companies, rather than providing assistance for those existing companies that rely on freshwater in the region.

“We’re not properly accommodating them; we need to do more,” he says.

The biggest challenge for existing water-dependent industries is in Milwaukee (and the region) offering competitive water utility rates. It’s an issue for large companies – think the brewers – as well as small industries, including metal plating and tanneries, industries that have a presence in Milwaukee and are among the top water consumers.

Even more critical is the impact that occurs when a larger water-dependent manufacturer pulls out of the city, such as Lesaffre Group’s acquisition and subsequent closure of Red Star Yeast’s production plant in the Menomonee River Valley in late 2005. Because water and wastewater rates are set based on usage, if there’s one less significant consumer of water, it can have a serious impact on other businesses.

“We can definitely be a leader in technology, but I think we also need the users here as well,” says Gallo, who supports integrating applied water technology into Milwaukee’s water-hub push. “We have to make those rates attractive for companies to not only locate here, but stay here. Part of the process is the basic principle of marketing: Market to your current customers first.”

By Laurie Arendt

Laurie Arendt is editor of CRW. She can be reached at crweditor@crwmag.com

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