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AN ECONOMIC OPPORTUNITY STUDY FOR CENTRAL WISCONSIN October 17, 2006 ACKNOWLEDGMENTS We thank the following organizations for their financial support of the Central Wisconsin Economic Opportunity Study: • Wisconsin Department of Commerce • Wisconsin Governor's Council on Workforce Investment / Wisconsin Department of Workforce Development / North Central Wisconsin Workforce Development Board – Growing Regional Opportunities for Wisconsin (GROW) grant • University of Wisconsin – Stevens Point We also wish to thank Centergy, Inc. for its guidance and leadership throughout this project. We extend our thanks to Centergy President William Tehan, and to the following people who joined the Centergy Board of Directors to serve on the project steering committee: • Sally Cutler – North Central Wisconsin Workforce Development Board • Bette Lang – Stevens Point Area Public School District • Dennis Lawrence – North Central Wisconsin Regional Planning Commission • Peter Manley – UW Extension The Centergy Board of Directors helped to guide this study, found the funding for the study, and in general provided support and encouragement for this effort. The following people are members of the Centergy Board: CENTERGY BOARD OF DIRECTORS Bo DeDeker Portage County Greg Diemer UW-Stevens Point Terry Frankland V & H Trucks Ed Hammer Marathon County Steve Hieger ERCO Worldwide / Port Edwards Plant Kate Kaz Mid-State Technical College Bruce Kepner Alliant Energy Jerry King Skyward Tim Laatsch Stora Enso Jeff Landin Portage County Business Council Connie Loden Heart of Wisconsin Business & Economic Alliance Genia Lovett Wausau Daily Herald Roger Luce Wausau Chamber of Commerce Dan Mahoney Village of Plover Karen Olson Marshfield Area Chamber of Commerce & Industry Ted Penn Wisconsin Public Service Dennis Peterson Delta Dental Gary Popelka Wood County 2 CENTERGY BOARD OF DIRECTORS (continued) Jim Reigel Paget Equipment Marty Reinhart Associated Bank Mike Salsieder Kolbe & Kolbe Fred Siemers River Cities Bank Victoria Strobel Marshfield Clinic Bill Tehan Ruder Ware, L.L.S.C. Brad Zweck Liberty Mutual CENTERGY OFFICERS President Bill Tehan Ruder Ware, L.L.S.C. Vice President Jeff Landin Portage County Business Council Secretary Dan Mahoney Village of Plover Treasurer Connie Loden Heart of Wisconsin Business & Economic Alliance We thank the following organizations for providing valuable information for this study: • American Transmission Company • Canadian National Railway Company • Wisconsin Public Service Corporation • North Central Regional Planning Commission • North Central Wisconsin Workforce Development Board We also thank the following individuals for their assistance with arranging interviews with interested parties to provide public input for this study: • Sally Cutler – North Central Wisconsin Workforce Development Board • Greg Diemer – University of Wisconsin – Stevens Point • Barb Fleisner – Marshfield Area Chamber of Commerce & Industry • Jeff Landin – Portage County Business Council • Connie Loden – Heart of Wisconsin Business & Economic Alliance • Roger Luce – Wausau Region Chamber of Commerce • Ted Penn – Wisconsin Public Service Corporation • Kate Kaz – Mid-State Technical College Finally, we would like to thank the 150+ people who participated in individual and group interviews to provide their input for this project. Thank you to everyone who assisted with and supported the Central Wisconsin Economic Opportunity Study. 3 TABLE OF CONTENTS EXECUTIVE SUMMARY........................................................................................................ 7 CHAPTER I: INTRODUCTION........................................................................................... 11 Scope of the Study............................................................................................. 13 Outcomes of the Study....................................................................................... 13 Methodology...................................................................................................... 14 Public Input........................................................................................................ 15 Study Consultants and Key Personnel............................................................... 16 CHAPTER II: DEMOGRAPHIC PROFILE......................................................................... 17 Population.......................................................................................................... 17 Change in Workforce - Regional Outlook......................................................... 23 Educational Attainment of the Population 25 and Older................................... 25 Commuting......................................................................................................... 26 Occupational Growth 2002-2012....................................................................... 27 Unemployment................................................................................................... 28 CHAPTER III: BUSINESS AND ECONOMIC PROFILES................................................ 31 Industry and Income - Regional Outlook........................................................... 31 Business Patterns................................................................................................ 34 Largest Employers............................................................................................. 39 Farm Income...................................................................................................... 40 Economic Benchmarks...................................................................................... 42 CHAPTER IV: SWOT / GAP ANALYSIS.............................................................................. 49 Strengths............................................................................................................. 49 Weaknesses........................................................................................................ 54 Opportunities...................................................................................................... 55 Threats................................................................................................................ 56 Gaps and Barriers to Economic Development................................................... 57 CHAPTER V: ECONOMIC OPPORTUNITIES AND RECOMMENDATIONS............. 59 Key Economic Opportunities and Recommendations....................................... 59 1. Biofuels and Alternative Energy Production............................................ 59 2. Paper.......................................................................................................... 60 3. Health Care............................................................................................... 60 4. Logistics.................................................................................................... 61 5. Agriculture and Food Processing.............................................................. 61 6. Research.................................................................................................... 62 7. New Business Development..................................................................... 62 8. Wood Products and Composites............................................................... 63 9. Workforce Education and Training........................................................... 63 10. Finance, Insurance, Real Estate (FIRE).................................................... 64 11. Retirement Markets................................................................................... 64 Other Economic Opportunities............................................................................ 65 4 TABLE OF CONTENTS (continued) CHAPTER VI: ECONOMIC STRATEGIES, TACTICS, & ACTION STEPS.................. 67 Strategy 1........................................................................................................... 67 Strategy 2........................................................................................................... 68 Strategy 3........................................................................................................... 70 Strategy 4........................................................................................................... 72 Strategy 5........................................................................................................... 73 Strategy 6........................................................................................................... 75 Strategy 7........................................................................................................... 76 Strategy 8........................................................................................................... 77 Strategy 9........................................................................................................... 79 Strategy 10......................................................................................................... 80 CHAPTER VII: IMPLEMENTATION, ORGANIZATION, PLANS AND STEPS.......... 83 A Few Comments on the Overall Organization................................................. 83 Study Implementation Infrastructure................................................................. 83 Infrastructure...................................................................................................... 85 Education........................................................................................................... 86 Research and Technology Transfer.................................................................... 87 Risk Capital........................................................................................................ 88 Entrepreneurship................................................................................................ 89 Clusters............................................................................................................... 90 Workforce.......................................................................................................... 91 5 6 EXECUTIVE SUMMARY Could Central Wisconsin become a national center for paper and paper technology research? Could Central Wisconsin become a technology transfer model for the state and nation? Could Central Wisconsin improve its environment and at the same time become a national leader in bio fuels and alternative energy production? These are some of the questions that are explored in An Economic Opportunity Study for Central Wisconsin. The need for change and a new economic vision for the region are clear. Unless the Central Wisconsin region and the State of Wisconsin adjust their current economic game plan, both will fall further behind in the New Economy. Data shows that the Central Wisconsin region is falling behind in key economic indicators, including per capita income. The region needs to reassess its economic development plans and adjust those plans if it is to prosper in the New Economy. The purpose of this study is to lay out a strategic economic development plan that builds on high growth economic opportunities in Central Wisconsin, specifically a three-county region consisting of Marathon, Portage and Wood Counties. This study is sponsored by Centergy, and the basic research and composition of the plan was done by NorthStar Economics, Inc. This study is designed to achieve Centergy's vision of a vibrant, unified Central Wisconsin regional economy that retains and attracts thriving businesses and a high-quality work force, fosters entrepreneurial activity, and inspires continuous improvement in the region's quality of life. The desired outcomes of this project include the following: • Cause people in Central Wisconsin to think about a regional approach to economic development. • Provide a common database with regional demographic and economic benchmarks. • Uncover and confirm the wealth of economic development opportunities in the Central Wisconsin region. • Introduces new ideas and concepts that may be useful in future economic development in the region. • Provide a basis for setting practical regional economic goals that can improve the economic condition and quality of life in the region. The study contains chapters on the demographics and economic characteristics of the region and a SWOT analysis that is based upon over 150 interviews. The bottom line in this report is to describe the economic opportunities that can lead to higher incomes and economic growth in the region and to compile an action plan to take advantage of those opportunities. 7 Economic Opportunities and Recommendations: Central Wisconsin is positioned to take advantage of a number of economic opportunities that could build on the existing business base and transform the region. This report includes several recommendations that can be started and many can be accomplished in the next three to five years. Each of the following recommendations is explored in detail in Chapter V. 1) Biofuels and Energy Production: Support and invest in research, technology transfer and businesses that will make Central Wisconsin a player in the alternative fuels/biofuels energy market. 2) Paper: Support and invest in value added products and processes that enhance and grow the existing world-class paper making assets and labor pool in the region. 3) Health Care: Build economic activity in medical research, medical education and training, regional health care delivery, medical supplies and medical software/bioinformatics. 4) Logistics: Build on the existing base and attract new businesses that further develop the strong logistics position of Central Wisconsin. 5) Agriculture and Food Processing: Build upon an already strong base in food processing and production of regionally grown crops such as potatoes, cranberries, and ginseng. 6) Research: Support existing and seek new research companies, centers and projects that will enhance and increase research activity and make it a major economic driver in Central Wisconsin. 7) New Business Development: Encourage and support the growth in the number of new regional business establishments. 8) Workforce Education and Training: Capitalize on the region's central location and the presence of workforce training institutions to deliver workforce education and training. Exploit the region's central location to establish and promote the region as a center for workforce training. 9) Wood Products and Composites: Leverage existing base of natural resources, experience with wood and paper manufacturing, and new, emerging technologies related to cellulose to capitalize on possibilities for economic growth. 10) Finance, Insurance, Real Estate (FIRE): Grow the existing FIRE sector and encourage spin-offs and new businesses to serve a growing market for financial services. 11) Retirement Markets: Explore market potential in various services to serve aging homeowners and residents in the region. 8 Economic Strategies, Tactics and Action Steps The economic opportunities identified will simply be good ideas unless Centergy and the economic development community in the region take action to implement them. The region needs to focus on key strategies that can be used to leverage existing assets and attract new investment and energy into creating economic growth and good paying jobs. We suggest the following strategies with specific tactics and action steps that are discussed in detail in Chapter VI, to focus time and talent in the most productive way to implementing the recommendations in this report: 1) Make retention and growth of existing business, agriculture and natural resource clusters the first order of business in economic development. 2) Build workforce productivity as a key means to retaining and attracting growing businesses, and seek to align the perspectives and relationships of the education community, workforce development, and economic development to the needs of the major employers and emerging and growing businesses in the region. 3) Continue and expand efforts to maintain and grow the physical infrastructure in the region, including critical areas such as the Central Wisconsin Airport, road systems and bridges, power generation and transmission infrastructure, class I rail lines, and telecommunications. 4) Position Central Wisconsin as the hub of innovative thinking, technology transfer, manufacturing education and training, and new paper products and applications. 5) Work to raise the educational attainment and skills of current and potential workers in Central Wisconsin. 6) Continue to develop and expand the sources of risk capital in the region and network those sources to the rest of the state and the Midwest region. 7) Increase technology transfer to regional businesses by forming a process that can readily access and connect the sources of new ideas and technology developed in the region, in the state, in the country, and in the world to existing and emerging businesses in the region. 8) Further develop the Central Wisconsin regional brand (Centergy) and regional thinking and action by educating and promoting Centergy and Central Wisconsin to audiences within the region as well as audiences in other regions of the state. 9) Further improve the business climate in Central Wisconsin to encourage the development of entrepreneurial activity that leads to much faster growth in the establishment of new businesses in the region. 9 10) Establish an organized regional approach to seeking state, federal and private economic development and grant funding for initiatives that come from this study and for ongoing and other projects aimed at improving the regional economy. Implementation, Organization, Plans and Steps Implementation of steps to accomplish economic development goals is already underway in the form of existing groups and programs in Central Wisconsin. However, thought should be given to an organizational structure that can organize, staff, and finance the resources needed to accomplish the goals in the Economic Opportunity Study. We propose a structure with Centergy acting as the controlling group, with subgroups in seven key areas, including infrastructure, education, research and technology transfer, risk capital, entrepreneurship, clusters, and workforce. We recommend expanding the Centergy board to include sectors of private business, workforce development, risk capital, and technical scientific experts; creating an organization structure that serves to support implementation and each of the subgroups; building on existing and new cluster groups; and getting staff assistance drawing on the university, the plan commission and volunteers. In Chapter VII, with respect to each of the seven subgroups, we identify goals, projects, action steps, and organizations and industry groups who can provide leadership. 10 CHAPTER I: INTRODUCTION The dynamics of the global economy have caused rapid change in the economic structure of the United States, the State of Wisconsin, and the Central Wisconsin region. The "New Economy", an economy built on brain power, risk capital, and knowledge, presents economic challenges to Central Wisconsin and the entire state. Unless the region and the state adjust their current economic game plan, both will fall further behind in growth and income. The economy of the State of Wisconsin has lagged behind the U.S. economy in terms of growth in gross state product (GSP) and per capita income. The state's per capita income is about 97% of the U.S. average and per capita income in Wisconsin is growing at a slower rate than the U.S. and surrounding states such as Minnesota. Central Wisconsin has lost ground to the U.S. and Wisconsin in terms of per capita income over the last generation. The data shows that the Central Wisconsin region is falling behind in key drivers in the New Economy. For example, the per capita income of Central Wisconsin in 1979 trailed the state by $842. That difference increased to $1,400 in 2003, a 66% increase in the gap. (See Figure I-1) Figure I-1 - Per Capita Personal Income in the U.S., Wisconsin, and Central Wisconsin Per Capita Personal Income in the US, Wisconsin, and Central Wisconsin $32,000 United States $28,000 Wisconsin Central WI $24,000 $20,000 $16,000 $12,000 $8,000 79 81 83 85 87 89 91 93 95 97 99 01 03 19 19 19 19 19 19 19 19 19 19 19 20 20 In Central Wisconsin and much of the state, good-paying jobs with good benefits have been lost to productivity gains, global competition, corporate downsizing, and outsourcing. Few comparable replacement jobs have been created and jobs for qualified dislocated training programs are not in the region. In the face of this extended period of economic challenge, Central Wisconsin needs to reassess its economic development plans and adjust those plans if it is to prosper in the New Economy. 11 A key relationship that has emerged in the New Economy is the link between brain power, as represented by education level, and earning power. There is a direct relationship between the level of education and income level. Figure I-2 shows what has happened to the earning power of high school and college graduates over a twenty five year period. The data shown is in constant dollars (no need to factor in inflation) and the gap between the annual earnings of a high school grad and a college grad has increased from $12,683 in 1978 to $23,291 in 2003. Over a lifetime of earnings, that gap today amounts to about $1,000,000. In short, markets in the New Economy reward education and skills. For Central Wisconsin and Wisconsin in general to be competitive in the new, global economy, educational attainment level is a key. Figure I-2 - The link between education level and earnings Difference Income Education (High School vs. Other Degree) 1978 2003 1978 2003 High School $22,856 $27,915 n/a n/a Bachelors $35,539 $51,206 $12,683 $23,291 Masters $46,885 $74,602 $24,029 $46,687 Source: U.S. Census Bureau Central Wisconsin has a viable base of business and industry, as well as untapped assets and competitive advantages such as a talented workforce and high quality of life. However, these factors must be combined with New Economy assets and melded into a cohesive strategic economic development plan that will produce greater growth in quality jobs and income levels. The alternative is a slow erosion in the economic viability of the region and threats to its quality of life. The purpose of this study is to lay out a plan that builds on high growth economic opportunities in Central Wisconsin. This study is designed to develop a strategic economic development plan for a three-county region in Central Wisconsin that includes Marathon, Portage and Wood Counties. This study is sponsored by Centergy, Inc., and the basic research and composition of the plan was done by NorthStar Economics, Inc. of Madison, Wisconsin. Centergy was formed in 1988 to stimulate economic development in Central Wisconsin. In 2004, Centergy adopted mission and vision statements that called for aligning resources, encouraging cooperation among all sectors of the regional economy, and promoting the value of doing business in Central Wisconsin. This study is designed to achieve Centergy's vision of a vibrant, unified Central Wisconsin regional economy that retains and attracts thriving businesses and a high-quality work force, fosters entrepreneurial activity, and inspires continuous improvement in the region's quality of life. Centergy's economic development initiatives include sponsorship of the regional Economic Development Forums in October, 2003, 2004, 2005, and 2006, and organization of Central Wisconsin Days in Madison in April, 2005 and 2006. 12 NorthStar Economics, Inc., based in Madison, Wisconsin, is an economic consulting and research firm dedicated to the development and implementation of New Economy regional economic development strategies. NorthStar was the consultant on the Northeastern Wisconsin Economic Opportunity Study, a regional development plan for an eighteen county region in northeastern Wisconsin. The NEW study was honored with a regional stewardship award by the Alliance for Regional Stewardship and the regional plan has already achieved a number of important results including securing implementation funding in excess of $375,000 from the state. Scope of the Study The goal of this project is to develop an economic development strategy for a three county region in Central Wisconsin that includes Marathon, Portage, and Wood counties. The economic development strategy includes the following: • Demographic and economic benchmarks for each county and major municipality • An analysis of regional strengths, weaknesses, opportunities and threats (SWOT) • An evaluation of the economic relationships among the selected counties • A comprehensive analysis of the challenges and opportunities facing the region • Recommendations as to the key economic opportunities within the region • Strategies to use in moving forward on economic development opportunities • Implementation ideas and steps that carry out the recommendations and strategies in the plan Outcomes of the Study In undertaking this study, Centergy outlined a number of desirable outcomes that might come from or be started by a regional economic development plan. Those outcomes include the following: • This study and the resulting plan will cause people to think about a regional approach to economic development in Central Wisconsin. The scale of economic opportunities, problems and challenges in any region is often too large for a single community or county to manage. Increasingly, collective effort is the answer to improving economic conditions. • This study and plan provide a common regional data base with demographic and economic benchmarks. This data base can be used by many organizations in planning and fund raising efforts. • This study uncovers and in some cases confirms the wealth of economic development opportunities in the Central Wisconsin region. • This study introduces new ideas and concepts that may be useful in future economic development in the region. • This study provides a basis for setting practical regional economic goals that can improve the economic condition and quality of life in the region. The ultimate goal of the study, of course, is a long-term plan for economic development for Central Wisconsin. Identifying the current state of the economy through interviews, 13 benchmarking economic measures and demographics, and doing a SWOT analysis create a foundation for economic analysis and recommendations regarding a course of action. This information provides the foundation for the primary objective of the study - identifying the most viable opportunities for economic development, formulating economic development strategies, and devising an implementation plan consisting of concrete action steps that may be undertaken to achieve the goal of improving the regional economy. The study is scheduled for public rollout on October 17, 2006. At that event, the implementation of the plan will begin and public support to implement the plan will be sought. It is a key goal of the study to obtain the support of the necessary public and private sector partners and secure their commitment to actively participate in executing the action steps identified herein. Methodology In April of 2006, we held the first in a series of meetings with the Central Wisconsin Economic Opportunity Study steering committee. At that time, as noted above, a number of goals were identified. A plan of work with specific tasks and timeframes was developed. Copies of previous economic studies and demographic data were requested, and NorthStar personnel began a comprehensive review of the available literature and available data sources. Over the course of the next few months, interviews were conducted with groups and individuals in Marathon, Portage, and Wood Counties to obtain their input and to establish a snapshot of the regional economy and assess the concerns present in the community. Over 150 people were interviewed including a number of people from outside the region who were familiar with Central Wisconsin. Simultaneously, we began gathering economic and demographic data and statistics to provide regional economic benchmarks. Sources of data included the U.S. Bureau of Economic Analysis (BEA), the Census Bureau's County and Zip Code Business Patterns, and the Wisconsin Department of Administration. Whenever possible, data for the specific municipalities of Marathon, Portage and Wood Counties were gathered, as well as comparative date for the entirety of the three counties, the State of Wisconsin, and the U.S. We gathered data on a variety of topics, including per capita income, property taxes, population, business establishments, employment, and educational attainment. In analyzing the collected data, compiling interview results, and brainstorming with the steering committee, a basis for formulating strategies began to emerge. Drawing on the information gathered, as well as our own expertise, we identified those economic opportunities that we deemed most ripe for economic development, and formulated strategies accordingly. After reviewing these opportunities with the steering committee, we began formulating a plan of strategies and concrete action steps designed to implement these strategies. The work plan for the study called for completion of the study by early October of 2006. Work was divided into the following three phases: 14 Phase I NorthStar met with the steering committee to establish a work schedule for the gathering of economic data, an interview scheduling, survey distribution and collection, and other study milestones. Discussion of preliminary communication strategies was also part of Phase I. Phase II NorthStar collected baseline data to benchmark the region's economic measures. These metrics included historical trends for demographic and economic data such as population, workforce, per capita income levels, employment by industry, number of business establishments, and other relevant trend data. Also included was data on education levels, patents, cluster analysis, industry trade connectivity and gap data. Data on Wisconsin and the U.S. was included in some cases for comparative purposes. NorthStar interviewed a significant number of regional stakeholders and interested parties on economic development issues in the region. These interviews included group and individual interviews. NorthStar collected, banked, and analyzed the interview data. NorthStar collected data from a number of standard U.S. and Wisconsin statistical sources. NorthStar also collected data and worked with UW-Extension, the North Central Wisconsin Workforce Development Board and the North Central Wisconsin Regional Planning Commission. Phase III NorthStar conducted an independent, unbiased analysis of the region's strengths, weaknesses, opportunities and threats based upon surveys, interviews, and the data and information gathered in Phase II. NorthStar made an independent assessment of the challenges and opportunities facing the region. NorthStar developed a strategic economic development plan that identified responses to those challenges and opportunities and recommended actions that will foster the future economic prosperity of the region. NorthStar has prepared its findings in a report and delivered ten hardcopies of the report as well as an electronic version. NorthStar also prepared a presentation of the findings for Centergy's Fall Forum on October 17, 2006. Public Input In laying out the goals for the Central Wisconsin Economic Opportunity Study, public input was of vital importance. The insight of business and community leaders throughout the communities comprising the region was particularly valuable. These insights bring an informed perspective to the table with respect to the challenges facing the regional economy. In early meetings on this project, we discussed the importance of interviewing key individuals across a wide spectrum of sectors and occupations. These people included educators, realtors, real estate developers, farmers, manufacturers, government officials, bankers and financial executives, entrepreneurs, union officials, business managers, and power and transmission company managers. 15 The steering committee was able to identify dozens of potential interview subjects in these sectors, and the regional Chambers of Commerce were instrumental in making the arrangements necessary to conduct the interviews. Over 150 people were interviewed in groups and individual interviews. Most of the interviews were done in May, June and July of 2006. Much of the information gathered is summarized as part of the SWOT analysis in Chapter IV of this report. The interview form used in the study and a summary of the interview responses can be found in Volume II of this report. Study Consultants and Key Personnel Dr. David J. Ward, president and founder of NorthStar Economics is the principal investigator on the project and the primary author of this report. Dr. Ward conducted many of the project interviews, conducted economic research and, in cooperation with the steering committee, developed the recommendations, strategies and action steps contained in the report. Mr. Dennis K. Winters, Vice President and Director of Research at NorthStar Economics also contributed to the study. Alan J. Hart, NorthStar's Director of Operations, provided key backup support on the project, including development of graphics, conducting demographic research, and editing and writing sections of the report. Theresa L. Field, a Research Associate at NorthStar Economics, was instrumental in gathering economic and demographic data, generating graphs and tables, and writing sections of the report. The steering committee on the project provided invaluable guidance and input on the project. The committee consisted of the Centergy board along with additional non-board members. A small executive steering group that included Bill Tehan, Barb Fleisner, Kate Kaz, Jeff Landin, Connie Loden, and Roger Luce provided day-to-day contact for the study. 16 CHAPTER II: DEMOGRAPHIC PROFILE Population Regional, State, and National Population Projections The counties examined for this study are Marathon, Portage and Wood, all located in Central Wisconsin. This is the area that will be referred to as the "Central Wisconsin region" or "the region" in this report. In order to compare population projections with the U.S., the county figures were expanded to include the year 2030.1 Regional population growth is well below the U.S. average and slightly below the state rate through the year 2030, at only 15.4%. U.S. projections estimate a 30% increase in population for the 2000-2030 time period. Regional and Wisconsin population figures were examined until the year 2030 and were grouped differently than the county population data below in order to match the U.S. projections provided by the U.S. Census Bureau. The cohort of 0-4 year olds in Wisconsin is low relative to the U.S. population. The comparable percentage of 0-4 year olds in the Central Wisconsin region is lower than both the U.S. and Wisconsin percentage. The 0-4 cohort is projected to drop faster in Wisconsin and the Central Wisconsin region as compared to the national average through the year 2030. Wisconsin and the region were above average in 2000 with regard to their 65+ population. This age cohort was 13.1% of the population for both Wisconsin and the region. Generally, the percentage of the population in most age cohorts for Wisconsin and the Central Wisconsin region are very similar in 2000 and the growth rate is nearly the same through 2030, except with regard to the eldest population group. The Central Wisconsin region has an above average growth rate (9.6%) for the 65+ age group compared with Wisconsin (7.7%) and the nation (7.3%) over the 2000-2030 time period. The Central Wisconsin region is also projected to have a smaller 20-44 year old group than the state and national average in 2030. Figure II-1 below shows the population percentage by age cohort for the U.S., the State of Wisconsin, and the Central Wisconsin region. 1 U.S. projections are provided for the years 2010, 2020 and 2030 only, not in five year increments as the state and county data are presented. 17 Figure II-1 - Age Cohorts as a Percentage of the Population from 2000 to 2030 40.0% 35.0% 30.0% 25.0% 20.0% 15.0% 10.0% 5.0% 0.0% 2000 2030 2000 2030 2000 2030 United States Wisconsin Regional 0-4 5-19 20-44 45-64 65+ Source: Wisconsin Department of Administration Historic Population Growth Central Wisconsin's overall population growth rate for the period 1985-2005 was 11.5%. That rate of growth was lower than the growth rate for the State of Wisconsin (16.8%) and the national population growth rate (24.6%). Population growth rates for the period 1985-2005 are shown in Figure II-2 below. Figure II-2 - County and Regional Population Growth Rates – 1985-2005 Population Growth Rate - Every 5 Years 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% -2.0% 1985 1990 1995 2000 2005 -4.0% Regional Brow n Outagamie Marathon Portage Wood Source: Wisconsin Department of Administration 18 Wisconsin's population growth was 3.7% over the time period 2000-2005. Marathon County grew at nearly the same rate. Growth in Portage County was above the state average at 4.5%. Wood County's growth was 1.1% from 2000-2005 which was lower than the state growth rate. Marathon County is the largest of the three Central Wisconsin counties, with an estimated population of 130,242 residents in 2005. Estimated populations for Portage and Wood Counties were 70,175 and 76,420 respectively in the year 2005. Over the period 1985-2005, the population growth rate for Marathon County was the highest of the three counties in this region at 17.4%. Portage County was slightly lower with a 13.0% growth rate, while Wood County saw almost no population change at all, with a 1.6% growth rate for the period 1985-2005. These population growth rates produce a regional average growth rate of 11.5%. Comparatively, Brown County and Outagamie County - located to the east of the Central Wisconsin counties - had a growth rate of 37.2% and 27.3% respectively over the same twenty- year time period. Figure II-3 below contains data for the State of Wisconsin, the three counties in the Central Wisconsin region, and two comparable counties. Figure II-3 - Population Data and Projections for the Period 2000-2025 Census Estimate Projection Projection Projection Projection County 2000 2005 2010 2015 2020 2025 Wisconsin 5,363,715 5,563,896 5,751,470 5,931,386 6,110,878 6,274,867 Marathon Co. 125,834 130,242 134,504 138,836 143,308 147,112 Portage Co. 67,182 70,175 72,259 73,911 76,170 78,952 Wood Co. 75,555 76,420 77,455 78,393 79,072 79,026 Brown Co. 226,658 237,515 248,529 259,192 269,812 281,348 Outagamie Co. 161,091 170,939 180,260 189,556 198,948 207,577 Source: Wisconsin Department of Administration Population projections for the time period 2000-2025 indicate that Marathon and Portage Counties are expected to grow at rates comparable to the state average. The population for Wisconsin is expected to grow by 17%. Marathon and Portage Counties are projected to grow at a consistent rate throughout the period 2000-2025. In Wood County, with an expected growth rate of 4%, the population is expected to peak in 2020 and slowly decline thereafter. Detailed population data are shown below in Figure II-4. 19 Figure II-4 - Population Projections for Central Wisconsin by Age - 2000-2025 Central Wisconsin Region Age Group 2000 2005 2010 2015 2020 2025 0-4 16,696 16,445 17,104 17,813 18,366 18,372 5-9 18,931 17,654 17,179 17,808 18,481 18,990 10-14 20,682 19,782 18,253 17,763 18,446 19,110 15-19 21,759 22,119 21,177 19,389 18,910 19,733 20-24 18,247 21,233 21,682 20,658 18,907 18,420 25-29 15,712 16,332 19,121 19,488 18,636 17,072 30-34 17,983 15,815 16,423 19,198 19,563 18,690 35-39 21,697 18,454 16,244 16,863 19,692 20,016 40-44 21,812 21,981 18,704 16,476 17,137 19,939 45-49 20,174 21,893 22,055 18,779 16,582 17,223 50-54 16,657 19,866 21,533 21,700 18,525 16,331 55-59 12,623 16,236 19,347 20,983 21,203 18,085 60-64 10,327 12,097 15,566 18,573 20,214 20,414 65-69 8,869 9,676 11,351 14,644 17,552 19,109 70-74 8,519 8,050 8,825 10,393 13,480 16,174 75-79 7,443 7,442 7,071 7,792 9,239 12,011 80-84 5,503 5,893 5,931 5,680 6,317 7,525 85-89 3,274 3,620 3,949 4,037 3,929 4,412 90-94 1,294 1,724 1,971 2,210 2,316 2,301 95-99 320 458 644 765 892 962 100 & Over 49 67 88 128 163 201 Totals 268,571 276,837 284,218 291,140 298,550 305,090 Source: Wisconsin Department of Administration Population growth within the Central Wisconsin region will vary considerably. The map below shows that population levels in the eastern part of the region will increase far more than those in the western part of the region. 20 Figure II-5 – Change in Population in Central Wisconsin - 1980-2020 Source: Cartographic Solutions, Inc. 21 County, state and national population projections were grouped into age cohorts and examined according to their percentage of the entire population from the years 2000-2025. Marathon County's largest age cohort in the year 2000 was those aged 0-14, who make up over 20% of the population. By the year 2025, the age group 65+ is projected to become larger than any other age cohort. The 0-14 group is projected to be close behind in 2025, falling slightly below the eldest residents, but it is anticipated that the 65+ group will jump 6%, from 13% of the population in 2000 to 19% in the year 2025. Portage County age cohorts may be most interesting. In the year 2000, the age group of 15-24 year olds was the largest of the age cohorts, comprising 20% of Portage County's population. The youngest age group, consisting of 0-14 year olds, also comprised nearly 20% of the population in the year 2000. These two groups are projected to consistently remain the largest age cohorts until the year 2020. This is not to say that the older segment of the population will not grow as significantly in Portage County as in the other counties. In fact, the age cohort of 65+ is projected to become the largest group by numbers in 2025. The population over 65 years of age is projected to more than double over this time period - similar to the other counties in the region - but the younger group, aged 15-24, is projected to remain a large portion of this county's population, unlike the other counties. Figure II-6 - Population by Age Cohort as a Percentage of the Total - 2000-2025 30.0% 25.0% 20.0% 15.0% 10.0% 5.0% 0.0% 2000 2025 2000 2025 2000 2025 2000 2025 2000 2025 2000 2025 Regional Brown Outagamie Marathon Portage Wood 0-14 15-24 25-34 35-44 45-54 55-64 65+ Source: Wisconsin Department of Administration These projections indicate that the age group 65+ will be the largest group in several Central Wisconsin counties by the year 2025. This is especially true in Wood County. Wood County in the year 2000 was already a county with a high average age, with the age group 65+ making up 15 % of the population, behind only the 0-14 year olds and 35-44 year olds. By 2025, the elderly group is projected to consist of 24% of the population, well above all other age cohorts. Outagamie County, by contrast, is also projected to have an increase in its 65+ population over the 2000-2025 time period, but it is not anticipated that the 65+ group will be the largest age group in 2025. In fact, Outagamie County residents aged 35-44 are projected to be only slightly below the 65+ age group, making up an estimated 15% of the population for the year 2025. The 0-14 year old group is projected to be the largest, making up 20% of the population. The same is true for Brown County, whose largest age cohort in 2025 is projected to be the 0-14 year old 22 group. The 65+ group is projected to comprise approximately 15% of the population, which is 5% less than the largest group. As the projections indicate, Wood County's population is barely growing. Wood County's residents are continuing to age, resulting in the disproportionately large projection of residents over 65, unlike any of the other counties in the region. Marathon and Portage are projected to experience growth, though not at the high rate of Brown County or Outagamie County. These counties share the same aging population, but have more evenly distributed age cohorts, as Portage County has a large population under age 24. The Central Wisconsin region age cohort projections balance out because of Marathon County's larger population, which compensates for Wood County's smaller aging population. The regional projections reveal the same general aging pattern. City population The following is population data for cities located in Marathon, Portage, or Wood Counties. Wausau is located in Marathon County. Stevens Point is located in Portage County, and Wisconsin Rapids is located in Wood County. Marshfield is located in Wood and Marathon Counties. Figure II-7 - Population for Central Wisconsin Municipalities - 1980-2025 City 1980 1990 2000 2005 2010 2015 2020 2025 Marshfield 18,053 18,861 18,383 18,436 18,527 18,596 18,604 18,444 Stevens Point 22,970 23,002 24,551 25,208 25,538 25,728 26,136 26,726 Wausau 32,426 37,060 38,426 39,191 39,813 40,461 41,154 41,831 Wisconsin Rapids 17,995 18,245 18,435 18,361 18,280 18,173 18,013 17,688 Source: Wisconsin Department of Administration The cities in Wood County reflect the overall county growth patterns. In the period 1980-2025 Marshfield is projected to grow by only 2%, while Wisconsin Rapids is actually projected to drop in population by 2%. Population projections for 2025 show Wausau with a population over 41,000, which would comprise nearly 30% of the Marathon County population. Growth from 1980-2025 is projected to be about 30%. In the same year, Stevens Point's population is projected to comprise 33% of Portage County's population. Average population growth in this 45 year period is projected at 16% for Stevens Point. Change in Workforce - Regional Outlook Workforce projections are based upon population projections of those aged 25-59 for the Central Wisconsin region. The workforce is projected to increase for a period through 2015 before it begins to shrink, resulting in a cumulative loss of 851 workers. The Central Wisconsin population of retirees will double during the time period 2000-2030, while the projected workforce will be nearly the same size in 2030 as it is was in 2000. Figure II-8 shows the projected population breakdown in terms 23 of working age people, school age people, and retirement age people. Figure II-9 illustrates the loss in workforce as cumulative total and the change in workers at five year intervals. Figure II-8 - Workforce, Retiree and School Age Cohort Projection for the Central Wisconsin Region – 2000-2030 160,000 140,000 Workforce (25-59) 120,000 School Age (0-24) 100,000 80,000 60,000 Retirees (60+) 40,000 20,000 0 2000 2005 2010 2015 2020 2025 2030 Source: Wisconsin Department of Administration Figure II-9 - Change in Central Wisconsin Workforce (ages 25-59) 8,000 6,769 6,829 6,000 4,680 3,919 4,000 2,850 2,000 60 698 0 2005 2010 2015 2020 2025 2030 -851 -2,000 -1,549 -2,149 Change in Workforce every 5 years -4,000 -3,982 Cumulative Change -6,000 Source: Wisconsin Department of Administration 24 Brown and Outagamie Counties have larger workforce totals, due to their larger population. As the projected workforce begin to decline dramatically, the change in workforce totals for Brown and Outagamie Counties shrink closer to the Central Wisconsin region. The workforce in Central Wisconsin counties is projected to show a net loss beginning in 2020. As Central Wisconsin counties continue to age, the number of workers in the labor force will decline dramatically, largely due to the aging population in Wood County. Figure II-10 - Change in Workforce by Central Wisconsin County - 2000-2025 Change in Workforce Every 5 Years - 2000 to 2025 8,000 2005 2010 2015 2020 2025 6,000 4,000 2,000 0 Region Brown Outagamie Marathon Portage Wood -2,000 -4,000 -6,000 Source: Wisconsin Department of Administration Educational Attainment of the Population Age 25 and Older The Central Wisconsin region is below the U.S. and Wisconsin averages with regard to educational attainment. Residents with college degrees (including both bachelors and graduate degrees) account for 19.1% of the population of the Central Wisconsin region. More than 22% of the populations of both the U.S. and Wisconsin have earned college degrees. Individual county comparisons reveal Wood County to have the lowest percentage of college graduates with only 16.9%, while Portage County boasts 23.4% of residents who have obtained a college degree. Portage County's higher educational attainment is likely influenced by the presence of the University of Wisconsin-Stevens Point campus. Brown and Outagamie Counties are each only 1% below Portage County with regard to college degree attainment, while 18.3% of Marathon County residents have college degrees. Generally speaking, the lower the percentage of the regional population that has earned only a high school diploma, the higher the percentage of the population there is in the same region with a college degree. Including associate degrees, Portage County's college attainment population was slightly above 30%, while it had the lowest percentage (37.2%) among Central Wisconsin counties of people whose highest level of education was a high school degree. The Central Wisconsin region is above average with respect to associate degree attainment, as compared with 25 both Wisconsin and the U.S., but ranks below both the state and the nation with respect to bachelor and graduate degree attainment. Marathon County has the highest percentage with an associate degree (9.2%), but lower bachelor and graduate degree attainment rates than most of the other areas examined. Brown County is the best educated among the counties studied, with only 34.9% having attained only a high school diploma, and over 30% with college degrees, including associate degrees. Figure II-11 - Educational Attainment in Central Wisconsin - Age 25+ in 2000 Educational Attainment for Central WI 100.0% 5.1% 8.9% 7.2% 5.9% 5.9% 5.8% 5.7% 7.2% Graduate 90.0% 13.2% 12.6% 11.8% Degree 15.5% 15.3% 16.6% 16.7% 16.1% 80.0% 8.1% 8.4% 9.2% Bachelor 6.3% 7.5% 8.9% 8.8% 7.0% 70.0% Degree 18.6% 18.8% 18.3% 60.0% 21.0% 20.6% 20.0% 19.1% 18.9% Associate Degree 50.0% 40.0% Some College 28.6% 38.7% 38.0% 41.0% 30.0% 34.6% 34.9% 37.8% 37.2% High School 20.0% Grad 12.1% 8.2% 8.0% 10.0% 9.6% 7.6% 7.1% 7.5% 9.2% Some High 7.5% 5.4% 7.1% 6.1% 4.7% 8.2% 6.0% 6.1% School 0.0% te s sin gio n n ty unt y nty unt y nty Less than 9th Sta con Re Cou Co Cou Co Cou ited Wis l WI wn mie on tage od Grade Un ntra Bro tag a ra th Por Wo Ce Ou Ma Source: U.S. Census Bureau Commuting Workers in Wood County leaving the county for work primarily commute to Portage and Marathon Counties. In 2000, about 86% of the workforce remained in Wood County, while 7% traveled to Portage County and 4% traveled to Marathon County. Workers commuting to Portage County are employed primarily in the manufacturing and services industries. Workers commuting to Marathon County are employed principally in the wholesale/retail trade and manufacturing industries. In Portage County, the workforce grew by 5,000 during the time period 1990-2000, yet only 3,000 of Portage County workers are employed in Portage County. The largest group of Portage County commuters travels to Wood County, working mainly in the manufacturing, services, and wholesale/retail trade industries. A portion of Portage County's workforce commutes to Marathon and Waupaca Counties as well. In 2000, Marathon County employed about 87% of its workforce in the county, down approximately 1% from 1990. Most of the remaining workers commute to Wood County for employment. Marathon County residents who commute to Wood County work largely in the 26 service and manufacturing industries. Other Marathon County commuters travel to Portage, Lincoln, and Clark Counties. Occupational Growth 2002-2012 The occupational sector exhibiting the largest growth percentile for employment for the State of Wisconsin is information technology. Health care follows, ranking second in projected employment growth. Based on actual employment growth numbers, health care, professional and related fields, and construction are adding 30,000 employees each (including replacement employment). In the North Central Wisconsin Workforce Development Area, the large growth sectors are also health care and information technology. The North Central Wisconsin Workforce Development Area includes Adam, Forest, Langlade, Lincoln, Marathon, Oneida, Portage, Vilas and Wood Counties. Sales, construction, and transportation will also be adding to their employment during the 2002-2012 time period. Figure II-12 is a summary of the expected growth in employment for those occupations. The "# of Openings 2002-2012" column on the far right represents new jobs as well as the estimated turnover openings. Figure II-13 details expected employment changes by industry for the North Central Wisconsin Area. Figure II-12 - Projected Occupational Growth for North Central Wisconsin– 2002-2012 Estimated Employment Percent # Openings Occupation Change Change 2002 - 2012 2002 2012 Health Care 5,750 7,570 1,822 32% 2,950 Information Technology 1,910 2,500 581 30% 830 Sales 3,010 3,680 671 22% 1,440 Construction & Extraction 3,390 4,140 750 22% 1,470 Transportation & Material Moving 6,120 7,450 1,325 22% 2,390 Professional & Related 3,190 3,870 679 21% 1,390 Service 860 1,010 155 18% 380 Management, Business & Financial 5,210 6,110 895 17% 1,820 Production 800 920 126 16% 350 Source: Wisconsin Department of Workforce Development, Labor Market Information 27 Figure II-13 - Employment Projections by Industry for North Central Wisconsin – 2002-2012 2002-2012 2002-2012 Industry Employment Percent Change Change Total Non-Farm Employment 26,590 13.4% Construction/Mining/Natural Resources 1,800 20.7% Manufacturing 70 0.2% Food Manufacturing -10 -0.2% Paper Manufacturing -1,490 -16.4% Machinery Manufacturing 170 5.0% Trade 5,090 14.3% General Merchandise Stores 450 8.0% Transportation and Utilities 2,200 20.6% Financial Activities 1,220 10.5% Education and Health Services 9,770 25.2% Ambulatory Health Care Services 4,110 36.9% Hospital (including State and Local Gov.) 2,010 21.9% Leisure and Hospitality 2,350 13.4% Information /Prof Services/Other Services 3,640 16.1% Government (Excluding U.S. Postal, State and Local Educ. and Hosp.) 450 3.5% Source: Wisconsin Department of Workforce Development, Office of Economic Advisors, October 2004 Employment projections for the North Central Wisconsin Workforce Development Area for the 2002-2012 time period anticipate sizeable growth in nearly all industries, with the exception of manufacturing. Specifically, paper manufacturing is expected to decline by 16.4%. The education and health care industries will add nearly 10,000 employees over the time period 2002-2012. Other industries to note are construction, transportation, information and professional services, all of which are projected to add large numbers to their workforce. Unemployment Figure II-14 - Central Wisconsin Regional Unemployment Rates – 2002-2005 2002 2003 2004 2005 United States 5.8% 6.0% 5.5% 5.1% Wisconsin 5.3% 5.6% 5.0% 4.7% Brown County 5.0% 5.2% 4.7% 4.5% Outagamie County 5.3% 5.6% 4.8% 4.5% Central Wisconsin Region 5.1% 5.3% 5.0% 4.8% Source: U.S. Department of Agriculture, Economic Research Service Unemployment rates compared with the annual average wage for the Central Wisconsin Region show Wood County to have the largest average annual wage compared to Wisconsin and the other counties. Interestingly, Wood County also has the highest unemployment rates when compared with the same areas. This is again illustrated when comparing average annual wage to the median household income for the year 2003. Wood County has the lowest median household 28 income for the year 2003, while Outagamie County is well above the other counties with respect to median household income. Wood County has the highest wage but not enough jobs available for their workforce, resulting in low household income. Figure II-14 - Unemployment Rates, Average Annual Wage and Median Household Income for Wisconsin and Counties - 2003 Average Annual Median Household 2003 Wage Unemployment Income % of WI % of WI Wisconsin $ 33,421 100.0% 5.6% $ 46,538 100.0% Brown $ 34,416 103.0% 5.2% $ 49,795 107.0% Outagamie $ 33,027 98.8% 5.6% $ 52,654 113.1% Marathon $ 31,295 93.6% 4.9% $ 48,643 104.5% Portage $ 29,694 88.8% 5.1% $ 45,722 98.2% Wood $ 35,387 105.9% 5.9% $ 44,540 95.7% Source: U.S. Dept. of Labor, Bureau of Labor Statistics; U.S. Dept. of Agriculture Economic Research Service Wood County finds itself above the Wisconsin and national average unemployment rate for the time period 2000-2005, with the exception of the years 2002 and 2003 when Wood County was slightly below the national unemployment rate. Marathon and Portage Counties fared better, both with unemployment rates below Wisconsin and the national rates for the years 2001-2005. In 2000, Portage County was slightly above the Wisconsin unemployment rate. Figure II-15 - Wisconsin Unemployment Change by County - May 2005 - May 2006 Source: U.S. Department of Labor, Bureau of Labor Statistics 29 Unemployment rates peaked in 2003 and have dropped in the subsequent years. In 2005, Wisconsin's unemployment rate was 4.9%. Wood County was above this figure with an unemployment rate of 5.7%. Marathon and Portage Counties were both below the state average. Portage County was slightly below with 4.6% and Marathon County much lower with a 4.2% unemployment rate for 2005. Outagamie County has been near or equal to the Wisconsin unemployment rate since 2001. For the following years Outagamie County looked like Marathon or Portage County, with wavering unemployment rates. For example, in 2002 and 2003 Outagamie County unemployment was equal to the state average, above Marathon and Portage Counties, and below Wood County. Brown County had the lowest unemployment rate of all the counties examined, except in 2005, when Brown County's unemployment rate was 4.5%, equal to Outagamie County. 30 CHAPTER III: BUSINESS AND ECONOMIC PROFILES Industry and Income – Regional Outlook Regional income can also be compared by particular industry. For example, the retail industry tends to have low pay, but has a high percentage of workers. In the Central Wisconsin region, retail trade accounts for 13% of all employment but only 7% of total income. Other industries such as health care and manufacturing have a better ratio of income to employment. In the Central Wisconsin region, manufacturing accounts for 17% of all employment and 23% of total income. Figure III-1 - Employment and Income as a Percentage of the Total by Industry - 2004 Regional Economy by Industry - 2004 25% Income Employment 20% 15% 10% 5% 0% AN RM T E SS IES RY UC G N ES L N M T E E S E RE N A SE EN IO IO AD IN AR AD AL ICE AC AL R FO TI O TA EA I ON ST FE LI T FA AT ST UR SP AT M UF ES W TR IN H C V RN I R RT R PR UT T AN OL L T R L AI VE O TR FO H & ET & O E O R IN N H G G M O & IN C E M IN C N M NA FI Source: U.S. Department of Commerce, Bureau of Economic Analysis Shift-Share Analysis for Central Wisconsin from 1995-2005 An online shift-share analysis tool2 from the University of Georgia was used to analyze employment changes by industry for the Central Wisconsin counties. Marathon, Wood and Portage counties were examined as one area. The first component, or the national growth component, meaning the U.S. employment growth rate over the same time, 1995-2005, contributed 17,609 jobs to the Central Wisconsin region. This growth was mostly in education and health services, manufacturing and trade, and the 2 http://www.georgiastats.uga.edu/sshare1.html 31 transportation and utilities sectors. These sectors also have the highest employment numbers in the Central Wisconsin counties. The second component, or the industrial mix component, resulted in a net loss of jobs by 5,349, mostly due to large losses in the manufacturing sector. The industrial mix component contributed employment to the construction sector by 25% and the education and health services and professional and business sectors by over 10%. The final component is referred to as the competitive share. The competitive share had a net gain of 2,667 jobs, although almost half the industries examined (11 total) had a negative growth rate due to the competitive share. Positive contributions can be seen in the education and health services, information and public administration sectors at large growth rates, all over 15%. Manufacturing and trade, transportation, and utilities grew but at a lower growth rate. However, the competitive share component did not contribute to the construction industry but resulted in a net loss of 58%, or 4,060 jobs. Figure III-2 - Shift-Share Analysis for Central Wisconsin Region – 1995-2005 National Industrial Competitive Growth Mix Share Sector % # % # % # Education and Health Services 13.8 2,893 10.9 2,285 17.7 3,718 Manufacturing 13.8 4,446 -31.5 -10,174 9.9 3,202 Trade, Transportation, & Utilities 13.8 4,123 - 4.4 - 1,284 6.0 1,798 Public Administration 13.8 528 - 4.8 - 182 21.6 830 Information 13.8 244 - 7.1 - 127 21.0 372 Natural Resources & Mining 13.8 239 -13.1 - 228 13.3 231 Other Services 13.8 571 1.6 68 - 5.6 - 231 Professional & Business Services 13.8 918 17.3 1,154 -13.7 - 912 Financial Activities 13.8 1,285 5.5 510 -10.5 - 980 Leisure & Hospitality 13.8 1,393 8.6 869 -12.9 -1,301 Construction 13.8 969 25.0 1,760 -57.7 -4,060 Total 17,609 - 5,349 2,667 Source: Table 2 from Shift-Share Analysis for Marathon, Portage and Wood County provided by http://www.georgiastats.uga.edu/sshare1.html Industry Earnings Change from 2001 to 2004 "Earnings" refers to total farm and nonfarm income and can be separated by industry. Total earnings for the Central Wisconsin region were $6.0 billon for 2001. Total earnings for this region in 2004 were $6.9 billion. Figure III-3 below illustrates these earnings as a percentage of the total for the industries listed. 32 Figure III-3 - Earnings by Industry for the Central Wisconsin Region as a Percentage of Total Earnings - 2001 and 2004 FARM MINING & FORESTRY CONSTRUCTION MANUFACTURING WHOLESALE TRADE RETAIL TRADE TRANSPORTATION & WAREHOUSE INFORMATION FINANCE, INS. & REAL ESTATE PROFESSIONAL & MANAGEMENT ADMN. & WASTE SERVICE & UTILITIES HEALTHCARE AND SOC. ASSISTANCE SERVICES GOVERNMENT 0.00 0.05 0.10 0.15 0.20 0.25 0.30 2001 2004 Source: U.S. Department of Commerce, Bureau of Economic Analysis Note: Data for the Central Wisconsin counties on total earnings is subject to release standards. Therefore some industry earnings are not reported by the BEA. By county, unreported data is as follows: Marathon County is complete. There is no Portage County data for Forestry, Mining, Utilities and Wholesale Trade for 2001 and 2004. There are no Wood County figures for Forestry, Mining, Professional and Tech Services, and Management in 2001. In 2004, the missing industries were Administrative and Waste Services and Management. The prime industry economic drivers for Central Wisconsin are the following: • Manufacturing • Health Care • Government • Finance, Insurance and Real Estate • Retail Trade The Central Wisconsin region saw a drop in manufacturing income by 1.4%. This regional total is due in part to the individual county's earnings. Marathon County did not actually lose manufacturing income, but gained by a small 0.2%, while Portage County dropped by 1.6% and Wood County dropped by 3.6%. Conversely, the health care industry's earnings were up 2% regionally in 2004. Marathon County rose by 1.5% and Portage County by nearly 1%. Wood County though gained 3.6% in health care industry earnings. 33 Figure III-4 shows the percentage of the total earnings a specific industry had in 2004 for the three Central Wisconsin counties. Portage County's earnings are distributed more evenly as compared with Wood and Marathon Counties, each of which has one industry which visibly leads in earnings. Figure III-4 - Percentage of Total Earnings by Industry in Central Wisconsin Counties – 2004 100 80 60 40 20 0 Marathon Portage Wood Government Healthcare Finance & Real Estate Manufacturing Transportation Retail Source: U.S. Department of Commerce, Bureau of Economic Analysis Business Patterns From a regional standpoint, the number of business establishments in these three counties barely grew. Overall growth combined for Marathon, Portage and Wood Counties is 0.2% for the time period 1998-2004. Growth for individual counties can be seen in the graph below. Figure III-5 - Growth Rate for Business Establishments – 1998-2004 Business Establishm ent Grow th from 1998-2004 (percent) US WI Brow n Outagamie Marathon Portage Wood -0.04 -0.02 0 0.02 0.04 0.06 0.08 0.1 Source: U.S. Census Bureau, County Business Patterns 34 Marathon, Wood and Portage Counties are below Wisconsin and the U.S. with respect to growth in business establishments. Marathon County actually experienced an overall decline in business development from 1998 to 2004. The counties of Outagamie and Brown had business growth close to 10% from 1998 to 2004. The Central Wisconsin counties therefore are quite behind in business establishment expansion, in comparison to the U.S., Wisconsin and other counties. County Business Patterns from 1998-2004 show little gain if any at all in Marathon, Portage and Wood Counties. Marathon County exhibited a loss of business establishments, while Portage County was up by 3 establishments and Wood County had an overall gain of 19 establishments from 1998-2004. Outagamie County gained 440 business establishments in this same time period. Growth rates for this time period can be seen in Figure III-6. Figure III-6 - Business Establishments by County – 1998 and 2004 1998 2004 Brown County 6,050 6,610 Outagamie County 4,499 4,939 Marathon County 3,371 3,363 Portage County 1,630 1,633 Wood County 1,900 1,919 Source: U.S. Census Bureau, County Business Patterns Marathon County business establishments peaked in 2000 with 3,473 total establishments and declined every year, ending at 3,363 total establishments in 2004. Loss in establishments can be seen in these industry categories: construction, manufacturing, retail trade, accommodation and food service, and other services. These industries lost about 20 establishments each from 2000 to 2004. Health care and finance/insurance gained establishments. Employment in the manufacturing and finance/insurance industries fluctuated up and down throughout these years, but both industries have a large number of county employees. Health care employment numbers grew steadily from 2000 to 2004. Marathon County Industry Losses and Gains Increase in Establishments Decrease in Establishments Health Care Construction Finance, insurance and real estate Manufacturing Retail Accommodation and food service Other services Portage County business establishments remained stagnant during the 1998-2004 time period. Establishment totals were the lowest in 2002, but began to rise in the following years. Overall losses in establishments can be seen in the following industries: construction, manufacturing, retail trade, and accommodation and food service in small numbers. This is made up for by industries which gained establishments such as health care, financial/insurance, and professional services. Employment for these industries usually follows the establishment patterns. 35 Employment declined in manufacturing by 800 employees, but rose by about the same number of employees in the health care industry. Portage County Industry Losses and Gains Increase in Establishments Decrease in Establishments Health Care Construction Finance, insurance and real estate Manufacturing Professional services Retail Accommodation and food service Wood County business establishments over the time period 1998-2004 topped out in 2002 with 1,955 establishments but ultimately ended with 1,919 in 2004, an overall gain of 19 firms. Establishment losses can be seen in the retail and services industries, each dropping by about 20 firms. The construction industry did not change much, with an overall difference of 2 firms. Other industries that expanded are manufacturing, financial activities, health care, and accommodation and food service. Despite the addition of 13 manufacturing firms, this industry lost over 1,500 employees overall. Employment in the health care industry grew at a steady pace adding 1,800 employees over the 1998-2004 time period. Wood County Industry Losses and Gains Increase in Establishments Decrease in Establishments Manufacturing Retail Health Care Other services Finance, insurance and real estate Accommodation and food service Brown County had growth in most industry establishment numbers over the 1998-2004 time period. The professional industry added nearly 100 firms, while the construction, financial, and health care industries added around 75 firms each in that time period. Manufacturing added about 40 establishments and 1,200 employees. Manufacturing also has the most employees with over 25,000. The retail and health care sectors employ 16,000 employees each. Information and technology increased by only 6 firms and lost about 300 employees during the 1998-2004 time period. Outagamie County showed growth in almost all industries, most notably in the construction industry which added 116 firms in the 1998-2004 time period. Retail trade, professional services and accommodation and food services also had notable growth. The manufacturing industry holds the most employees in this County, with over 18,000 employees from the workforce. The retail industry employed over 14,000 people and the health care industry had nearly 10,000 employees in 2004. Nonfarm Proprietors' Income Among the five counties, Brown County maintained the highest level of nonfarm proprietors' income from 1999 to 2004. It is also the only county whose nonfarm proprietors' income was above $400 million during the five-year period. Wood County and Portage County had the lowest and second lowest nonfarm proprietors' income and they remained relatively stable. In 36 contrast, the other two counties fluctuated up and down throughout the 5 years. The three counties (Brown, Marathon, and Outagamie) proprietors' income dropped down from 2001 to 2003 after the recession cycle. After 2003, nonfarm proprietors' income climbed slowly for all five of the counties discussed. The year-to-year percentage change reveals that nonfarm proprietors' income changed significantly in both the five counties and the state of Wisconsin as a whole. However, the U.S. did not see dramatic change in nonfarm proprietors' income during those five years. From 2000 to 2001, nonfarm proprietors income in Wisconsin, Brown County and Wood County declined significantly, compared with the U.S. which only dropped by 2%. From 2001 to 2003, the percentage changes for all the counties, Wisconsin and U.S. were much more clustered than in the other years. They were very small; nearly zero or even negative change. When approaching the year 2004, the change in nonfarm proprietors' income for the five counties, Wisconsin and U.S. all converged to a similar point, around 9%. According to percent change over the five-year period, the U.S. obtained a slightly bigger positive change than Wisconsin. Among the five counties, nonfarm proprietors' income in Outagamie County rose the most, nearly as much as that in Wisconsin. Wood County had the worst result. Its nonfarm proprietors' income dropped by more than 20% over the five year period. Proprietors' Income Proprietors' income is the current-production income of sole proprietorships, partnerships, and tax-exempt cooperatives. It includes monetary interest (except dividends) received by non- financial business, and rental income received by persons not primarily engaged in the real estate business. When the three Counties of Marathon, Portage and Wood are considered as a whole Central Wisconsin region, the region remained stable in proprietors' income from 1985 to 2000 and then experienced a sizable growth, primarily due to the contribution from Marathon County. The table below gives the proprietors' income in the Central Wisconsin region, Wisconsin and the U.S. Figure III-7 - Proprietors' Income – 1985-2004 1985 1990 1995 2000 2004 United States $263.6 B $382.0 B $493.7 B $730.5 B $895.3 B Wisconsin $4.8 B $5.9 B $6.4 B $9.1 B $11.5 B Central Wisconsin Region $256.1 M $295.2 M $279.6 M $414.3 M $448.1 M B = Billion, M = Million Source: U.S. Department of Commerce, Bureau of Economic Analysis As shown above, the U.S.' values are far larger than those for Wisconsin and the Central Wisconsin region, so there would be little point in using these absolute values to compare the 37 trends in proprietors' income for the three areas. The alternative is to transfer the original data into normalized percentages. Data for all the years except 1985 are divided by the value for 1985 to get the normalized percentages. That is to say, the 1985 figures are set as the standard equal to 100% for each area. All of the data for the subsequent years are expressed as percentages divided by the original 1985 figure. In this way, Figure III-8 below displays percentages, which can clearly reflect how much growth occurred in the corresponding area. Figure III-8 – Proprietors' Income Growth for the U.S., Wisconsin & Central Wisconsin – 1985-2004 . Proprietors' Income as a Percent of the 1985 Total 350% US Wisconsin Region 300% 250% 200% 150% 100% 50% 1985 1990 1995 2000 2004 Source: U.S. Department of Commerce, Bureau of Economic Analysis During the past 20 years, although Wisconsin and the Central Wisconsin region have shown some gains in proprietors' income, they have been growing at significantly lower rates as compared to the national figures. In addition, the Central Wisconsin regional growth rate in proprietors' income has consistently trailed Wisconsin as a whole. The Central Wisconsin region showed a decline of 6% in proprietors' income from 1990 to 1995. With the exception of this slight decline, national, state and regional proprietors' income has risen steadily over the period from 1985 to 2004. Figure III-9 below reveals that Brown County exhibited the highest proprietors' income of the five Wisconsin counties examined. Portage County and Wood County are both at the lowest level of proprietors' income. Marathon County and Outagamie County proprietors' income are situated between Brown County and the lowest two. 38 Figure III-9 - Change in County Proprietors' Income – 1985-2004 Proprietors' Income by County - 1985-2004 $600 Millions 1985 1990 1995 2000 2004 $500 $400 $300 $200 $100 $0 Brown Outagamie Marathon Portage Wood Source: U.S. Department of Commerce, Bureau of Economic Analysis As for the growth rate of proprietors' income, Portage and Wood Counties showed little gain throughout the 20-year period. Wood County was the only one that had an overall decline in proprietors' income from 1985 to 2004. Brown County grew in proprietors' income at a substantially rapid rate, during the 2001 recession when it dropped a little after its peak in the year 2000. From 1985-1990, when the proprietors' income of other counties stabilized, Brown County started to rise significantly, maintaining further advantage in proprietors' income over the other counties. Brown County exhibited particularly robust growth, nearly doubling its proprietors' income from 1995 to 2000. During the same period, Marathon County also doubled its figure. Outagamie County steadily rose over the past twenty years. Largest Employers The Wisconsin Department of Workforce Development provides information about the top employers according to the number of people employed. The top three employers, with 1000+ employees for the Central Wisconsin region, Brown and Outagamie Counties are listed below: • Marathon County • Aspirus Wausau Hospital, Inc. • Kolbe & Kolbe Millwork Company, Inc. • Liberty Mutual Insurance Company • Portage County • Sentry Insurance: A Mutual Company • University of Wisconsin – Stevens Point • Stevens Point Public Education System 39 • Wood County • Marshfield Clinic • St. Joseph's Hospital of Marshfield • Stora Enso North American Corporation • Brown County • Green Bay Public School District • Georgia-Pacific Corporation (formerly Fort James) • Humana Insurance Company • Outagamie County • Thedacare Group • Appleton Area School District • Thrivent Financial For Lutherans Farm Income Farm income is the sum of wage and salary disbursements, employer contributions for employee pension and insurance funds, and proprietors' income in the agriculture industry (crop production and animal production only—NAICS subsectors 111 and 112). Farm income comprises the net income of sole proprietors, partners, and hired laborers arising directly from the current production of agricultural commodities, both livestock and crops, and specifically excludes the income of non-family farm corporations. Figure III-10 - Farm Income – 1985-2004 1985 1990 1995 2000 2004 United States $32.0B $46.8B $39.7B $44.5B $64.0B Wisconsin $1.0B $1.3B $764.4M $877.1M $1.6B Central Wisconsin Region $76.2M $114.9M $65.6M $71.0M $121.5M B = Billions, M = Million Source: U.S. Department of Commerce, Bureau of Economic Analysis Wisconsin and the Central Wisconsin region exhibit similar patterns with respect to farm income. Wisconsin and the Central Wisconsin region's farm incomes experienced two peak times, in 1990 and 2004. In between, Wisconsin and the region's farm income dropped dramatically and were sustained below the 1985 figure, while the U.S. had only a small loss in percentage of farm income. Overall, the U.S. exhibited considerably larger growth in farm income than Wisconsin and the Central Wisconsin region in the last 20 years. 40 Figure III-11 - Growth Rate of Farm Income for the U.S., Wisconsin and Central Wisconsin – 1985-2004 Farm Income Growth Rate - 1985-2004 Central WI Region Wisconsin United States 0.0% 20.0% 40.0% 60.0% 80.0% 100.0% 120.0% Source: U.S. Department of Commerce, Bureau of Economic Analysis Among the five counties, Marathon County generally had the highest farm income, which peaked in 1990 with nearly $68 million, and declined dramatically in the following five years. During the same period, all five of the counties dropped more or less in farm income to around their respective 1985 levels. Except for Wood County, farm income was up a bit in the period from 1995-2000. Then Marathon, Wood and Brown Counties in particular showed gains in 2004. Figure III-12 - Farm Income Comparison by County – 1985-2004 Farm Income by County - 1985-2004 $80 Millions 1985 1990 1995 2000 2004 $70 $60 $50 $40 $30 $20 $10 $0 Brown Outagamie Marathon Portage Wood Source: U.S. Department of Commerce, Bureau of Economic Analysis 41 In summary, farm income in each of the five counties has fluctuated up and down in the past 20 years. The general development pattern was that farm income was high in 1990, but declined during the following decade. It began rising rapidly again in 2004. Economic Benchmarks Per Capita Income - Historical Growth Per capita income is the total income for a geographic area (e.g., the country, a state or county) divided by the population of the geographic area. For example, the per capita income for Wood County in 2004 is calculated by totaling the income of Wood County residents, including earnings, investment income, and transfer payments, and dividing this total income pool by the county's population. Figure III-13 - Per Capita Income Growth Percentage – 1985-2004 US WI Region Brown Outagamie Marathon Portage Wood 0.0 0.5 1.0 1.5 2.0 Source: U.S. Department of Commerce, Bureau of Economic Analysis As reported by the BEA, per capita income for this region has grown from about $15,000 in 1984 into the $30,000+ range (with the exception of Portage County) in 2004. The Central Wisconsin region's growth rate is actually above the national and state average for the 1985- 2004 time period, all of which were over 100%, as they doubled their per capita averages. The Central Wisconsin region's per capita income growth was 140.9% over the 1985-2004 time period. The national growth rate was 123.9% and Wisconsin's per capita income growth rate was 132.4%. Even though the region has experienced better growth, the per capita value is still below the U.S. and Wisconsin averages, as seen in Figure III-14 below. 42 Figure III-14 - Per Capita Income for U.S., Wisconsin and Central Wisconsin Region – 1985-2004 $35,000 $30,000 $25,000 $20,000 $15,000 $10,000 85 87 89 91 93 95 97 99 01 03 19 19 19 19 19 19 19 19 20 20 United States Wisconsin Central WI Region Source: U.S. Department of Commerce, Bureau of Economic Analysis Recent Trends – Per Capita Income The Central Wisconsin counties are below the national and state per capita income average. Wisconsin's per capita income in 2004 was $32,166. Portage County has the lowest average and is followed by Marathon County. Wood County is nearly equal to the state average and closely matches Outagamie County. Brown County had the largest per capita income of the counties examined. County per capita incomes for 2004 are shown as a percentage of the state average below. Figure III-15 - Per Capita Income – 2004 Per Capita Income ($) % of U.S. Average Wisconsin $32,166 97% Brown County $33,204 103% Outagamie County $32,377 101% Marathon County $31,206 97% Portage County $28,874 90% Wood County $32,031 100% Source: U.S. Department of Commerce, Bureau of Economic Analysis Portage County had the lowest per capita income of the three Central Wisconsin counties in any year for the time period 1999-2004. Marathon County per capita income growth was between Portage and Wood, steadily growing over this time period. In 1999, Wood County per capita income trailed the state average by a significant amount. This was also true in Wood County for the next three years. Wood County tightened the gap between their per capita income and Wisconsin's in 2003 and 2004. 43 Figure III-16 - Per Capita Income – 1999-2004 1999 2000 2001 2002 2003 2004 United States $27,939 $29,845 $30,574 $30,810 $31,484 $33,050 Wisconsin $27,135 $28,570 $29,400 $30,025 $30,664 $32,166 Brown County $28,285 $29,811 $30,447 $31,361 $31,711 $33,204 Outagamie County $27,243 $29,077 $29,619 $30,060 $30,596 $32,377 Marathon County $25,711 $27,244 $28,183 $28,974 $29,701 $31,206 Portage County $23,408 $24,837 $26,150 $26,740 $27,862 $28,874 Wood County $26,401 $27,622 $28,212 $29,482 $30,584 $32,031 Source: U.S. Department of Commerce, Bureau of Economic Analysis Growth rates for the U.S., Wisconsin, Brown County and Outagamie County for 1999-2004 are all around 18%, while the Central Wisconsin region's average is 22%. These counties have outperformed the competition in income growth rate, but their per capita income still lags behind the state and U.S. averages. Average Annual Wage 2005 Wood County's average annual wage grew the most during the 2001-2005 time period, 14.4%, compared to Wisconsin's 12.5% growth rate over the same period. Marathon County experienced a 13.1% growth in average wage, while Portage County's growth over this time period was only 8.5%. By comparison, Brown and Outagamie Counties' average wage growth was about 1% lower than the state average. The Central Wisconsin counties of Wood and Marathon fared well, while Portage County saw the lowest growth rate. Average annual wages for 2005 are shown in Figure III-17. Figure III-17 - Average Annual Wage – 2005 Annual Wage ($) % of WI Average Wisconsin $35,503 Brown County $36,320 102.3% Outagamie County $35,400 99.7% Marathon County $33,260 93.7% Portage County $31,479 88.7% Wood County $37,779 106.4% Source: Wisconsin Department of Workforce Development, Office of Economic Advisors Wage and Salary Disbursements Wage and salary disbursements include the monetary remuneration of employees, including corporate officers' salaries and bonuses, commissions, pay-in-kind, incentive payments, and tips. Figure III-18 indicates how wages changed from 1985 to 2004 in the six Wisconsin counties. The three counties in the Central Wisconsin region exhibited significantly lower wages in comparison to the other counties, with relatively slower growth rates. Portage County wages had 44 the lowest wages and also grew at the slowest rate. By 2004, Portage County wages were slightly above $1.0 billion. Figure III-18 - Wage and Salary Disbursement Summary – 1985-2004 1985 1990 1995 2000 2004 United States $2.0T $2.7T $3.4T $4.8T $5.4T Wisconsin $35.6B $49.2B $35.3B $87.9B $99.1B Central Wisconsin Region $1.8B $2.6B $3.4B $4.5B $5.2B T = Trillion, B = Billion Source: U.S. Department of Commerce, Bureau of Economic Analysis Figure III-19 - Wage and Salary Disbursement Changes Since 1985 Wage and Salary Disbursement as a Percent of the 1985 figure 300% US Wisconsin Region* 250% 200% 150% 100% 50% 1985 1990 1995 2000 2004 Source: U.S. Department of Commerce, Bureau of Economic Analysis The Central Wisconsin region has steadily grown in wage and salary disbursement to more than 2.5 times that of 1985 disbursement levels in the past 20 years. The region's growth rate was very close to the Wisconsin and U.S. rates. Generally, Wisconsin's wage and salary disbursement rose slightly faster than U.S., while the Central Wisconsin region grew a few percentage points faster than Wisconsin. 45 Figure III-20 - Wage and Salary Disbursement by County – 1985-2004 Wage and Salary Disbursement by County - 1985-2004 Millions $6,000 1985 1990 1995 2000 2004 $5,000 $4,000 $3,000 $2,000 $1,000 $0 Brown Outagamie Marathon Portage Wood Source: U.S. Department of Commerce, Bureau of Economic Analysis Wages and salaries in all five counties have grown consistently over the past 20 years. Brown County had the highest wages and also experienced the fastest overall growth rate. By the year 2004, wages in Brown County were more than triple what they were in 1985. Transfer Income Current personal transfer receipts consist of income payments to persons for which no current services are performed, and net insurance settlements. Transfer income is the sum of government social benefits and net current transfer receipts from business. Figure III-21 shows the national, state and regional data for transform income over the period from 1985-2004. 46 Figure III-21 - Change in Transfer Income Since 1985 Transfer Income as a Percent of the 1985 figure 350% US Wisconsin Region* 300% 250% 200% 150% 100% 50% 1985 1990 1995 2000 2004 Source: U.S. Department of Commerce, Bureau of Economic Analysis As seen in the figure, there was a strong relationship between the transfer income for the Central Wisconsin region and that for Wisconsin. The growth rate of Central Wisconsin region transfer income was just a few percentage points above Wisconsin, while it consistently trailed the national gain. Figure III-22 - Transfer Income Comparison – 1985-2004 1985 1990 1995 2000 2004 United States $425.3B $595.6B $877.4B $1.1T $1.4T Wisconsin $9.3B $11.7B $15.6B $19.2B $24.3B Central Wisconsin Region $417.8M $525.2M $717.4M $894.1M $1.1B T = Trillion, B = Billion, M = Million Source: U.S. Department of Commerce, Bureau of Economic Analysis Transfer income consistently increased in all of the five counties. Personal transfer income growth in Brown County consistently ranked above the other four counties from 1985 to 2004. Outagamie and Marathon Counties, following Brown County in sequence, had transfer income at nearly the same level. Portage County grew at the slowest rate, with the lowest amount of transfer income over the 20-year period. As shown in the figure below, the patterns of transfer income look very similar to that of the wages in the five counties. A minor difference between these two growth patterns was that the transfer income grew relatively faster than wages did from 2000 to 2004. 47 Figure III-23 - County Transfer Income – 1985-2004 Transfer Income by County - 1985-2004 $900 Millions 1985 1990 1995 2000 2004 $800 $700 $600 $500 $400 $300 $200 $100 $0 Brown Outagamie Marathon Portage Wood Source: U.S. Department of Commerce, Bureau of Economic Analysis 48 CHAPTER IV: SWOT ANALYSIS A basic step in developing a strategic economic plan is to assess the strengths, weaknesses, opportunities and threats to the region's economy. This process is commonly referred to as a SWOT analysis. The SWOT analysis is a process used to assess the challenges and strategies for economic development. A SWOT analysis can be used as a framework to gather public input and to engage the public in thinking about the current economic condition and the economic opportunities for the future. The Central Wisconsin analysis asks four basic questions: • What are the economic strengths of the Central Wisconsin economy? • What are the economic weaknesses of the Central Wisconsin economy? • What are the economic opportunities for the Central Wisconsin economy? • What are the threats and barriers to economic development and success in the Central Wisconsin economy? In completing this assessment, data was gathered from a number of sources. A large amount of data was obtained through public input as the consultants completed over 70 interviews as part of the study. Residents were interviewed in Marathon, Portage and Wood counties. Group and individual interviews were conducted in several Central Wisconsin communities, including Stevens Point, Wisconsin Rapids, Marshfield, and Wausau. Other sources of information for the SWOT analysis included demographic and statistical data obtained from government sources such as the Census Bureau, the Bureau of Labor Statistics, and the Bureau of Economic Analysis. Based upon these data sources, the following represent a summary of the major points with regard to strengths, weaknesses, opportunities, and threats related to the Central Wisconsin economy. Strengths The labor force, favorable quality of life, and recreational opportunities represent significant reported strengths in the Central Wisconsin economy. Other strengths cited most often by residents include the educational and health care systems. Strengths reported by area residents include: • Workforce (strong work ethic, large labor pool, mobility of workforce, educated workforce, good vocational training, low cost labor, abundant job opportunities) • Environment (natural resources, the Wisconsin River and other bodies of water, rural areas with recreational opportunities and city amenities, agriculture, available land) • Central location 49 • Education (access, good schools at all levels - PK-12, technical, and colleges / universities, postsecondary education, quality of system) • Health care (access to quality health care, medical complex) • Transportation / Logistics (time / distance advantage, highway access, trucking) • Housing (affordable homes, safe neighborhoods) • Economy (diversified tax base, low cost of living, balanced economy) • Recreation (fishing, boating, fine arts ) • Community (good place to raise a family, mixture of generations, commitment to community, family values, homogenous population, family connections, safety, small town feel, low crime rate, quality of life) • Entrepreneurism (forward thinkers, new WIN chapter) • Government and politics (political awareness, stable and collaborative government, strong community leaders, dedicated to the region) Analysis Residents who were interviewed offered a comprehensive list of strengths in the region. Based upon our own research, we would highlight several areas of strength in Central Wisconsin. The region benefits from the presence of an economic development infrastructure of professional organizations dedicated to fostering economic development in the region, including Centergy, Inc., the Heart of Wisconsin Business & Economic Alliance, the Marshfield Area Chamber of Commerce and Industry, the Portage County Business Council, the Central Wisconsin Economic Research Bureau, the North Central Wisconsin Regional Planning Commission, the North Central Wisconsin Workforce Development Board, and the Wausau Region Chamber of Commerce. These organizations help to stimulate local economic development projects and bring focus to critical issues such as land use and transportation plans, business attraction and retention, and workforce education. Many Wisconsin counties lack the organizational infrastructure that Central Wisconsin possesses to build effective economic development initiatives. The region boasts strong quality of life. In each town that we visited, residents invariably offered favorable assessments of the community, the attractive lifestyle, the climate, the safety and beauty of the environment, and the recreational opportunities available. These issues are of critical importance in attracting and retaining the educated, highly paid workers necessary to continue to grow the regional economy. While indeed a strength, it should be noted that this does not necessarily differentiate Central Wisconsin from other competitors. In many other studies that we have done over the years, we find that in most locations, people feel that quality of life is an advantage in their community. This was true in the Northeastern Wisconsin (NEW) study, our work in Door County, Wyoming, New Hampshire, Ohio and Kansas. High quality of life is a strength, but in our view, it does not create a substantial competitive advantage. Quality of life is a frequent asset that we observe in other projects we have done and in economic strategy reports that we have read. 50 A second strength that we observed is the natural resource assets in the region. The Central Wisconsin region is blessed with abundant amounts of fresh water, productive soils, and wood fiber. These natural assets are clearly displayed in the land cover map in Figure IV-1 below. Figure IV-1: Land Cover Map Source: Cartographic Solutions, Inc. 51 A third strength that we observed is several economic clusters that have long been part of the regional economy and that are key to maintaining and growing the regional economy. The Harvard Cluster Mapping Project was used to identify key clusters in the region. The highest ranked cluster in the region was Forest Products and the region ranks second nationally according to the Harvard data. Other clusters identified in the study included processed foods, agricultural products, furniture, and distribution services. These existing business clusters provide the region with a diversified job base and more importantly, they are centers of knowledge and labor skills that feed into other clusters and businesses in the region. A fourth strength that we observed is the geography of the region and its central location in the state. It is a natural center for meetings, training, and the distribution of goods. It is also a good location relative to many major markets in the Midwest. The locator map in Figure IV-2 below presents a good perspective on the geographical advantage of Central Wisconsin. 52 Figure IV-2: Locator Map Source: Cartographic Solutions, Inc. 53 Weaknesses Although workforce issues were frequently cited as regional strengths, it is apparent that some residents perceive weaknesses as well. Concerns cited include a decline in the strong work ethic, "brain drain", and a shortage of young, skilled, educated workers. Other primary weaknesses identified by Central Wisconsin residents include concerns about housing and health care costs, despite the fact that many residents cited these same issues as strengths. Numerous issues were mentioned by are residents, including: • Workforce issues (aging workers, short supply of skilled workers, declining work ethic, lack of respect for manual labor, lack of young talented workers, low wages, reduction in volunteerism) • Housing (cost, taxes) • Government (restrictive zoning, cost of services not shared adequately) • Business climate (lack of retention in some areas, not enough high-paying jobs, lack of retail establishments, plant closings / worker dislocation) • Telecommunications (aging infrastructure, lack of IT options and workers) • Vision (lack of entrepreneurs and risk takers, declining volunteerism, perceived as a "dead" area by younger people, image problems, lack of corporate and individual benefactors) • Health care (rising costs) • Education (linkages between businesses and schools, declining enrollment, "brain drain") • Entrepreneurial talent pool (lack of a deep pool of entrepreneurs) • Capital (lack of risk capital, lack of corporate and individual benefactors) • Transportation / Logistics (lack or air connections, arterial access, geographic location - distance from major metropolitan areas) Analysis In our view, certain weaknesses in the region are significant enough to warrant special attention. As the data in Chapter II shows, the aging of the workforce and the overall educational attainment of the workforce are critical issues for the economic future of the region. As businesses continue to transition through the adoption of new technology and processes, the amount of knowledge that a worker will need and the way in which work will be accomplished continue to change dramatically. In this environment, an environment that is likely to continue for some time, the educational skills and the training of the workforce become key elements in any strategic economic plan. Infrastructure, particularly related to highways and bridges also deserves special mention. There are highway gaps such as the Highway 10 four lane expansion to Marshfield and the bypass link of Highway 10 to Interstate 39 that will compete against a growing list of state highway projects. There are also existing projects such as the Highway 51 project around Wausau that could be delayed as cost overruns on other major state highway projects in southeastern Wisconsin absorb more of the funding. 54 Another major concern involves the availability of risk capital. If the region is going to compete for new professional firms and high-tech businesses that attract high wage jobs, it is crucial to increase the amount of and access to early stage investment capital (i.e. coordinated angel investing3). While angel investing is on the rise in Wisconsin, activity in Central Wisconsin is not as robust as it could be. Marshfield Investment Partners and the more recently established Central Wisconsin Business Angels are the only organized angel investing groups in the region, but they have made a number of local investments to date. Risk capital is crucial in establishing or attracting New Economy businesses. The lack of broader access to startup and investment funds in Central Wisconsin stands out as a substantial weakness. In addition, the information technology infrastructure will require substantial improvements in order to attract and retain competitive business enterprises. Broadband Internet access and updated IT technology are of paramount importance with respect to retaining not only high- technology businesses, but the younger "creative class" of workers who will demand access to such services outside of their workplaces as well. Opportunities There are a number of opportunities for economic growth in Central Wisconsin. Residents who were interviewed saw promise in the health care field, particularly due to the expansion potential of the Marshfield Clinic. Residents also noted the potential for continued workforce education, business growth from within, and market opportunities appurtenant to the aging population. Opportunities cited by Central Wisconsin residents included the following: • Growth of existing small and medium-sized businesses • Bio-fuels / biomaterials • New business start ups • Health care (Marshfield Clinic spin-offs including research, business services, and connections to angel investors) • Food services and restaurants • Housing expansion - more moderate level homes • Communication about local and regional economies • Workforce education and training • Community cooperation (desire to address weaknesses, communication among residents and officials in the region) • Aging population (expanded market opportunities, services for the aging, potential for transition to entrepreneurial activity) • Business development (new conference center, more higher-tech jobs, support for startup businesses, more agriculture-based businesses, retail) • Paper and forest products • Green energies • Tourism 3 Angel investing is early stage investing for new business startups and expanding businesses. 55 Analysis We would largely agree with what residents of the region have identified as some of the best opportunities for economic development. In particular, the presence of a major health care provider represents a significant opportunity for economic development. The Marshfield Clinic is one of the leading health care providers in the state, with potential reaching far beyond the health care field. The angel investing group attracts entrepreneurs and investors with the potential to develop new technologies. Viewed in concert with the thriving agricultural base, it is apparent that Central Wisconsin is well situated to leverage its assets in the expanding field of biotechnology. A second and very large opportunity that we observe is in the area of logistics. The Harvard cluster study has mapped this cluster as above the national average. We think that the convergence of Class I rail, Interstate highways and a central location place Central Wisconsin in a position to grow this cluster in ways that we describe in the next chapter. The aging population is noteworthy as well. Some residents noted this as a weakness (based on a perception that fewer younger, educated workers are locating in the region), but the realization that an aging population provides market opportunities is an astute one. An aging population has more money to spend at local businesses, has more need for health care services which drive the regional economy, and is well poised to make investments in entrepreneurial initiatives. Economic development professionals in the region would be well-advised to focus marketing efforts on these residents who are in the best position to stimulate economic growth. Threats There are several significant threats that stand in the way of Central Wisconsin realizing its economic growth potential. Most frequently cited by residents who were surveyed were the fear of wealth, a quality workforce, and substantial businesses transferring out of the region. Several other issues were noted as well, including: • Aging workforce / worker shortage • Brain drain • Competition from other regions and global competition • Funding threats to on-going and planned infrastructure projects, particularly highway and bridge projects • Tax burden on new businesses • Service and costs issues related to Class I rail service in the region • Lack of availability of start-up and expansion equity capital • Lack of economic development incentives • Zoning issues • Loss of corporate headquarters and regional offices • Decline of the paper industry • Media / information gap 56 • High fuel prices • Threats to agriculture (regulation, available workforce, aging workforce) Analysis Several threats noted by residents are not unique to Central Wisconsin. Global and local competition for investment dollars is a concern in any region. However, by focusing on regional efforts, Central Wisconsin can turn local competitors into allies, and leverage its strength to minimize the threat of competition from other regions. Additionally, issues like the decline in the paper industry are indicative of a global transition from the Old Economy to the New Economy. Central Wisconsin needs to embrace new technologies and new industries and opportunities in order to remain competitive in the New Economy. In our view, the lack of risk capital noted by a few residents represents one of the largest threats to economic development in the region. As noted above, venture capital is critical in New Economy business attraction and retention. Central Wisconsin must attract investment dollars, and encourage its own residents who are in a financial position to become active angel investors to do so. The rural environment, the existing business base, and the distance from the state's largest metropolitan areas limit or prevent certain types of economic development. However, in this increasingly global economy, investment in infrastructure improvements and state-of-the-art telecommunications and other technology should be explored to minimize this threat. Gaps and Barriers to Economic Development There are a number of clear gaps and barriers to future economic development in the Central Wisconsin region. The remainder of this chapter is devoted to a brief discussion of the major gaps and barriers that we have identified. Workforce Future economic stability and growth in the county will depend on the availability of a skilled workforce. While many area residents cite the local workforce as a strength, concerns about potential worker shortages, brain drain, and the aging of that workforce were also viewed as weaknesses and/or threats. The demographics discussed in Chapter II point to significant shifts in the workforce age cohort. Currently, 40-44 is the largest age cohort in the region. However, twenty years from now, 60-64 year-olds are projected to be the largest cohort. This is not surprising, as the same people comprise both cohorts. Assuming the largest group remains in the area, they will still be the largest group twenty years from now. The key is to balance the population by continuing to attract younger, skilled workers to the region. Geography and Market Limitations Central Wisconsin's geography is both a strength and a weakness. The county's natural beauty and distance from urban areas makes it an appealing place for rest, relaxation and outdoor 57 recreational activities. Economic development in the tourism and hospitality industry relies on these strengths. On the other hand, distance from major metropolitan markets, the limitation in air linkages, and the limitation in geographic market scope are significant barriers to economic development. Infrastructure Transportation and communications infrastructure are major concerns for future economic development. Central Wisconsin must continue to embrace state of the art communication technology, even in remote, rural areas, if it is going to attract and retain high-tech businesses, and a younger workforce who will expect access to these amenities. Broadband Internet access is a vital tool in many businesses that rely on the transmission of data and graphic files. Fiber optic broadband networks are to the 21st Century what telephony and broadcast technologies were to the 20th Century. Increasingly, businesses rely on information inputs as much as they do raw material inputs. For 21st century businesses, fiber networks allow the transmission of data at 50 to 100 times the speed of DSL or cable. Projects that use this technology should be studied in Central Wisconsin. Seed Stage / Investment Capital The Regional Stewardship Award-winning Northeastern Wisconsin (NEW) Economic Opportunity Study highlighted the need to establish sources of seed capital for new business expansion and startups. This is no less true for Central Wisconsin than it is in the Northeast. Although there is some angel investing activity, seed capital for early stage equity investing is not as plentiful as it could be. The lack of seed capital is a gap in the assets needed to encourage new business startups and business formation in the region. So, what can we learn from the SWOT analysis and the data compiled for this study? The SWOT analysis and the data compiled for this study form a good framework for thinking about how the Central Wisconsin economy can grow to benefit its residents. The SWOT analysis for Central Wisconsin has laid out strengths that come from the skills and intelligence of its people, the existing economic base, the quality educational and health care systems, and the geography of the region. Many of the items cited as strengths are also identified as weaknesses or perceived as potential threats. Geography, for example, is a strength because of the environment, recreational opportunities, and natural beauty of the region. At the same time, the fact that the region is fairly remote with respect to the state's major metropolitan areas means that markets are also limited by geography and that distance to market and transportation of raw material and finished goods puts the region at a competitive disadvantage. On the other hand, although distance from any particular metro area is a concern, the region's central location in the state is a plus, inasmuch as it places Central Wisconsin in a position to draw from several different markets. 58 CHAPTER V: ECONOMIC OPPORTUNITIES AND RECOMMENDATIONS Central Wisconsin is positioned to take advantage of a number of economic opportunities that could build on the existing business base and transform the region. Each of the recommendations explained below can be started and many can be accomplished in the next 3-5 years. This chapter explains the economic opportunities that we see in Central Wisconsin. The next chapter deals with strategies that can take these opportunities to the operational level. The final chapter suggests implementation steps for a number of these recommendations and opportunities to get something done in the near term. Key Economic Opportunities and Recommendations: 1. Biofuels and Alternative Energy Production: Support and invest in research, technology transfer and businesses that will make Central Wisconsin a player in the alternative fuels/biofuels energy market. The focus and energy of the federal government is finally reaching scale in the area of bioenergy. A recent U.S. Department of Energy (DOE) press release announced a $250 million dollar initiative in bioenergy to meet the goals of the Energy Policy Act of 2005 (EPAct). EPAct will accelerate the demand for biofuels as follows: Four billion gallons of ethanol were produced this year, mainly from corn. EPAct requires that by 2012, at least 7.5 billion gallons per year of renewable fuel be blended into the nation's fuel supply. To meet these goals, future biofuels production will require the use of more diverse feed stocks including cellulosic materials such as agricultural residues, grasses, and other inedible plants. In addition to the market demand that will arise from the provisions of the EPAct, the State of Wisconsin has passed legislation that requires that 10% of the state's electrical power supply must come from renewable energy sources' by the year 2015. Currently, about 2% of the state's power supply comes from renewable energy. As we compose this report, Governor Doyle has announced a $450 million Public, Private Investment Strategy to Develop Renewable Energy. The aim of this program is to significantly increase the role of renewable energy and decrease the state's dependence on fossil fuels. This program is proposed at a time when Central Wisconsin might include this in the implementation of the strategic Economic Opportunity Plan. Central Wisconsin is well positioned to take advantage of a growing demand for renewable energy and fuels. Central Wisconsin has an abundant supply of renewable, natural materials such as wood and agricultural products and residues that could be turned into biofuels. The most interesting prospect for the region is the possibility of BioRefining as a value-added part of the paper manufacturing process. In addition, the possibility of installing biodigesters at major dairy 59 and large animal production lots holds possibility for the production of methane to be used to generate electric power. Central Wisconsin needs to position itself as a player in the alternative energy / biofuels sector by declaring this area a major economic development priority, setting realistic goals, and supporting and encouraging alternative energy grants, projects, and mainstream investments in the alternative energy / biofuels sector. 2. Paper: Support and invest in value added products and processes that enhance and grow the existing world-class paper making assets and labor pool in the region. The paper industry has gone through a long period of worldwide consolidation, overcapacity, low profit margins, and product stagnation. We believe that the paper industry may be on the edge of a new era in which the process of making paper will be reengineered to enable BioRefining. In later parts of this report, we lay out the vision of BioRefining and the economics that may revolutionize paper making and allow it to become a growth industry with far better profit margins and job growth. A second wave of technology involving nanotechnology also holds great promise for revitalization and growth in the paper industry. Paper making is an old production process that uses small pieces of natural material (e.g. wood fiber) to create paper, cardboard and other products. Advances in nanotechnology hold the promise of producing value-added paper products that would greatly extend the application and market for paper materials. Wisconsin is the number one paper producing state in the country. Since losing the Paper Chemistry Institute in the late 1980s, Wisconsin has not had a research and technology transfer operation comparable to the Institute that feeds research and innovation into this important industry. 3. Health Care: Build economic activity in medical research, medical education and training, regional health care delivery, medical supplies and medical software/bioinformatics. The region is blessed with an abundance of high quality health care facilities and assets. The regional health care cluster draws patients from a throughout the region, state, nation, and the world. The presence of a medical research base and a wide range of health care specialties provide platforms for high end economic development to attract existing businesses and to incubate new businesses. The intellectual property produced in research activities at the Marshfield Clinic and at other medical research centers in the state provide a basis for high tech, start up companies 60 4. Logistics: Build on the existing base and attract new businesses that further develop the strong logistics position of Central Wisconsin. The central geographic location of the region, the presence of trucking companies, and the convergence of Class I rail and Intestate and major state highways makes Central Wisconsin a logical spot for distribution and logistics operations. Logistics opportunities lie in at least three areas: • The distribution of goods • Logistics management and technology • Intermodal operations A major opportunity in the distribution of goods and intermodal logistics comes from the connections and operations of the Canadian National Railway (CN). A recent article in the Wall Street Journal (Front page, August 8, 2006) points out that the development of the little known port of Prince Rupert, British Columbia will turn the port and the CN rail line between the Prince Rupert and Chicago into what some see as the third largest link to Asia and Asia markets behind only Los Angeles and Long Beach. A second opportunity that may be available is in the area of logistics management and the software and technologies connected with advance logistics management systems. Finally, and already evident in the area, Central Wisconsin is simply a good geographic location for distributing goods to major Midwest markets. The Harvard cluster study indicates that the region is already well above the national average in terms of distribution of goods. The opportunities to further expand this sector, especially with the convergence of highway and rail in the region, is outlined in greater detail in the strategy and implementation chapters. 5. Agriculture and Food Processing: Build upon an already strong base in food processing and production of regionally grown crops such as potatoes, cranberries, and ginseng. Central Wisconsin has a very strong base of agriculture and food processing. The long history of successful dairy farming and vegetable crop production in the region has led to the formation of a very important farming sector and a significant food processing industry. Given the increasing link between agricultural production and alternative fuels (ethanol), composite materials (ag based polymers, plastic/fiber composites), the agriculture sector will be of increasing economic value and may be an important source of business development. A number of food processing companies have emerged and grown in the region in the last several decades. Niche food processors in area such as snack foods and specialty cheeses have successfully expanded production and employment in the region. 61 While food processing is generally not a high growth business, there are a number of segments of the agriculture, food processing, and food packaging industry that are growing faster than the industry as a whole and these areas may be ideal for expansion and growth in the region. 6. Research: Support existing and seek new research companies, centers and projects that will enhance and increase research activity and make it a major economic driver in Central Wisconsin. Central Wisconsin has a significant amount of research activity in various parts of the region. Research activity in paper science, food processing, food safety, water quality, and medicine are well established in the region. There is however no network that connects, supports, and promotes these research enterprises. The opportunity exists to further increase research activity and employment in the region. Soon to be added to the research sector in the region is a U.S. Department of Agriculture research center in Marshfield that will include a number of Ph.D. scientists focused on water quality and food safety. This along with the medical research program at the Marshfield Clinic and paper science research being done at UW-Stevens Point form an emerging critical mass of research activity. This activity is in turn a source of new knowledge, products and ideas that can lead to tech transfer to regional companies and the formation of new start up firms. In the next two chapters we outline several strategies and steps that may enhance and expand the research sector in Central Wisconsin. 7. New business development: Encourage and support the growth in the number of new regional business establishments. The Central Wisconsin region lags behind most of the state in the rate of growth in new business formation. County business patterns from 1998-2004 show little gain if any at all in Marathon, Portage and Wood Counties. Marathon County ended with a loss of business establishments, while Portage County was up by 3 establishments and Wood County had an overall gain of 19 establishments from 1998-2004. Outagamie County gained 440 business establishments in this same time period. Small businesses are a major source of growth in jobs and form the base for medium and large size businesses of tomorrow. The region has several sources of management talent and new business ideas. The "offs": layoffs and spin-offs, offer two real opportunities to grow the number of business establishments. Recent layoffs in the paper and other industries have provided a pool of former managers and technical people who have or could form or run new businesses. For example, in Central Wisconsin, a number of laid off process engineers have formed their own consulting firm that is now serving a national clientele. Spin-offs from existing businesses are also a possible source of new businesses. 62 Finally, the establishment of a "green" incubator which would house business that dealt with renewable energy, energy saving products and forestry and environmental consulting was suggested by one group in the community interviewing process. This idea may fit well with the concept of making Central Wisconsin a place where green products and alternative energy are important economic sectors. 8. Wood Products and Composites: The natural resource base in Central Wisconsin and the existing business base that build their products and services on the processing of wood and wood fiber are key sectors in the Central Wisconsin economy. Like much of Wisconsin, the ability to make things (manufacturing) is deeply rooted in this region. That knowledge and skill is a very valuable asset to the region and can be used to further develop economic growth and wealth. While BioRefining holds great promise for paper, nanotechnology and other advances in material science hold great promise for cellulose and its byproducts. The use of cellulose fibers to create nanocomposites has been recently documented by researchers at Virginia Tech and the further application of cellulose and its elements to novel composites of materials is moving forward at a good pace. Given the combination of natural resources, experience with wood and paper manufacturing, the new technologies related to cellulose that are emerging, there are substantial possibilities for economic growth. Central Wisconsin is in a position to share in that growth and we suggest ways to do that in the next two chapters. 9. Workforce Education and Training: The central location of the region and the presence of workforce training programs at Mid-State and Northcentral Technical Colleges present a major opportunity in expanding programs and establishing businesses that deliver workforce education and training. A particular opportunity in workforce development and training relates to the work force needs of the paper industry and allied businesses. As the process of paper making gets more complex, the skill and knowledge set needed by current and future workers also expands. The Wisconsin Paper Council has weighed in on this topic and indicated the need for more advance training in manufacturing. To that end, Mid-State Technical College has started a program in paper manufacturing technology that offers training to prospective papermakers. As BioRefining and nanotechnologies are incorporated into the papermaking process, the demand for training in Central Wisconsin and in other papermaking regions of the state and nation will grow. In that regard, there is an entrepreneurial opportunity to position Central Wisconsin to meet this need and create good paying jobs in doing so. Finally, the central location of the region is an advantage in providing workforce education and training to the rest of the state. This central location should be exploited in establishing and promoting the region as a center for workforce training. 63 10. Finance, Insurance, Real Estate (FIRE): Central Wisconsin continues to be the home of a number of leading financial services companies. The history of the insurance industry in this region goes back many decades. While there have been periods of consolidation, this sector remains very important in the region. The nationwide demand for financial services continues to grow as people manage an ever more complex set of financial investments, credit cards and other financial instruments. The opportunity to grow the existing FIRE sector and to encourage spin-offs and new business starts matches a growing market for financial services. It also builds on a management and talent base that is in the area. 11. Retirement Markets: The Central Wisconsin Region has proportionally a larger cohort of older people and fewer younger people when compared to the overall U.S. population. While age cohorts for the region are currently comparable to those of the State of Wisconsin, population projections to the year 2030 indicate that percentage of people in the 65+ age cohort will grow faster than that of the state or nation. Kiplinger's Washington Edition estimates that young empty nesters (age 55-64) in the U.S. will grow by ten million in the period from 2005 to 2015. They further estimate that seniors (age 65 and over) will grow by ten million during the same time period. As we showed in Chapter II, the overall population growth in Central Wisconsin is projected to be quite modest in the next 20 years. However, the over 65 age cohort of the population should increase dramatically. Figure V-1 below shows the dramatic projected increase in the 65+ population cohort. We believe that there is considerable market opportunity in the growth of the 65+ population and that planning for this change can build the quality of life and economic vitality of the region. 64 Figure V-1 - Workforce, Retiree and School Age Cohort Projection for the Central Wisconsin Region – 2000-2030 160,000 140,000 Workforce (25-59) 120,000 School Age (0-24) 100,000 80,000 60,000 Retirees (60+) 40,000 20,000 0 2000 2005 2010 2015 2020 2025 2030 Source: Wisconsin Department of Administration The over 50 population in the county can be thought of as three separate markets. This population can be segmented into three categories: 1. Go-go's: have a combination of health and income that allow an active life style and associated spending on homes, travel, health care and local services 2. Slow-go's: are limited by either health or income and are less active but mobile and require other types of goods and services 3. No-go's: are limited by health and/or income and are not very active, requiring more specialized and expensive services. The following summarizes possible market opportunities in serving an aging population: 1. There will be market opportunity in health care and assisted living services. 2. There will be market opportunities related to a forming "Wellness" cluster. 3. There is market potential in travel services, hobby related activities, and leisure activities 4. There a potential market for professional services including financial and investment services, legal and tax services and other professional services. 5. There will be a growing demand for transportation and home maintenance services to serve aging homeowners and residents. Other Economic Opportunities: The eleven economic opportunities we discuss in this chapter should not limit the thinking or planning for economic development in the region. There are several other areas where economic development is or could take place. For example, the region is experiencing a considerable expansion in retail development particularly along the I-39 corridor. Some of this retail expansion is attracting national chains that have not had a presence in Central Wisconsin. 65 We also note some development in meeting and convention facilities again primarily around the I-39 corridor. This takes advantage of the lack of large meeting spaces in the region and the central geographic location. Finally, there are visitor and tourism opportunities that are planned or underway that may provide additional economic opportunities in the area. It may be that specific opportunities in any of these or other areas will be so economically compelling as to add them to the implementation plan and to make one or more of them a high priority in implementation. Priorities: We believe that Centergy should concentrate on a handful of economic opportunities over the next 1-3 years. Below we give our recommendation as to priorities: • High priority – implement in the next 1-3 years 1. Bio Fuels and Alternative Energy Production 2. Paper 3. Health Care 4. Logistics 5. Agriculture and Food Processing • Second level priority – implement in the second phase 1. Research 2. New Business Development 3. Wood and Wood Composites • Third level priority – implement in a third phase 1. Workforce Education and Training 2. Finance, Insurance, and Real Estate (FIRE) 3. Retirement Markets 66 CHAPTER VI: ECONOMIC STRATEGIES, TACTICS, AND ACTION STEPS The economic opportunities in Chapter V will simply be good ideas unless Centergy and the economic development community in Central Wisconsin take action to implement some or all of these ideas. To do that, the region needs to focus on key strategies that can be used to leverage existing assets and attract new investment and energy into creating economic growth and good paying jobs. A strategy is a long term plan of action to achieve a specific goal. Tactics are the actual means used to carry out strategies and achieve goals. Action steps are the specific tasks that help achieve goals. We suggest the following strategies, tactics, and action steps that will focus time and talent in the most productive way to implementing the recommendations in Chapter V: Strategy 1: Make retention and growth of existing business, agriculture and natural resource clusters the first order of business in economic development. The first rule of economic development is to build on the businesses and clusters of businesses already in the area. As we point out in Chapter V, the paper industry, the health care sector, and agriculture and food processing are well established in the region and offer opportunity for economic growth and good paying jobs. Retention of these businesses should be a very high priority. Many of the regional Chambers have active programs that try to assess the needs of existing businesses. This approach combines with a strategy of regional pursuit of economic funding sources should be continued and expanded. Tactic 1A - Coordinate business retention activities in the region Rationale: Many chambers and economic development corporations (EDCs) in the region have business retention as a very high priority. Together, they can better collect information from existing businesses and determine what needs can be met by local action and what needs can be better met by regional action. Action Steps: 1. Ask the local Chambers and EDCs to meet and compile ongoing business retention programs and information. 2. Design a regional business retention plan and project that can serve the region and the Chambers and EDCs. Such a plan would share retention information and strategies and employ a collective effort in business retention. 67 Tactic 1B - Use cluster groups to support existing business clusters and to organize information about gaps and needs. Rationale: Business and industry clusters exist in Central Wisconsin and at least two groups, the Heart of Wisconsin Business & Economic Alliance and the North Central Wisconsin Workforce Development Board have ongoing cluster projects. 3. Identify the existing cluster groups and seek to merge common cluster groups in the region. Build on the cluster group activity already underway at the Heart of Wisconsin Business & Economic Alliance and the North Central Wisconsin Workforce Development Board. Existing common or regional groups identified in the study include agriculture, paper and forestry, health care and transportation. 4. Ask the Heart of Wisconsin Chamber and the North Central Wisconsin Workforce Development Board to lead an effort to identify and organize other possible regional cluster groups. 5. Form a plan and regional agenda for each cluster group. Use that information to identify gaps and needs and to communicate and support those needs to federal and state agencies. Strategy 2: Increase workforce productivity as a key means to retain and attract growing businesses and seek to align the perspectives and relationships of the education community (PK-12-College), workforce development organizations (largely the regional Workforce Development Board and the Technical Colleges), and economic development interests (the economic development professionals, Chambers, the regional planning commission, and economic development corporations) to the workforce needs of the major employers and emerging and growing businesses in the region. As simple and obvious as this strategy may seem, we have yet to encounter a region in Wisconsin or other states where there is a good alignment of these groups that is focused on the economic development needs of a region. Communication among these groups is either non- existent or sporadic. To implement this strategy, a conscious effort must be made to establish a robust communication pattern and to explore relationships based upon the self-interest of the groups involved. While this latter point may strike some as crass, long-term involvement and sustainability of commitment of these groups has to be based on mutual interest. Tactic 2A – Seek to align the efforts of education, workforce development, and economic development to the workforce needs of Central Wisconsin. Rationale: The linkages among these three key groups either don't exists or are not as strong as they need to be to effectively support future workforce training and development in the region. 68 Action Steps: 6. Form a regional taskforce that includes education, economic development, and workforce development leaders. Ask this group to form an initial plan to align communication and information about the regional economy and regional workforce needs. Include in the plan specific information on skill and training needs by business cluster. 7. Ask the regional workforce development taskforce to gather information on the learning skills and workforce/PK-12 alignment projects underway at CESA 1 and as part of the New North implementation plan. Tactic 2B – Support innovative workforce development projects that increase the level of skill and training in the workforce in Central Wisconsin. Rationale: Innovative workforce projects help to meet gaps in workforce training and skill needs and also establish the reputation that Central Wisconsin seeks to meet the needs of its businesses. Action Steps: 8. Support Workforce Development Board grants that seek funding for innovative workforce training programs. 9. Support innovative workforce training programs aimed at meeting the workforce needs of health care organization and manufacturers. A good example of an innovative program in the region is the new Paper and Technology associate degree program at Mid-State Technical College. Tactic 2C – Support entrepreneurial workforce training businesses and programs in Central Wisconsin. Rationale: Making Central Wisconsin a leader in workforce training is good business in many ways. By supporting the efforts of the Technical Colleges and entrepreneurs who want to build businesses around workforce training, the region may become a hub for such activity and new businesses may be formed and visitors drawn to the area. Action Steps: 10. Seek the leadership of the technical colleges, the workforce development board, and interested entrepreneurs to assess workforce training activity programs that might be expanded to increase the number of workers who come to Central Wisconsin for training. 69 11. Using the assessment described above, evaluate how new businesses might be formed to market training in Central Wisconsin and beyond. Consider how technical college workforce training programs might help create spin off workforce training businesses. Tactic 2D – Support projects that retain or increase the supply of professional and managerial workers in the region. Rationale: Professional and managerial talent are critical to running high growth companies. They are also often the source of new businesses in a region. Action Steps: 12. Establish an executive/professional career database that can be used to identify career opportunities for partners and spouses of individuals who have been recruited to work in Central Wisconsin. 13. Use the executive/professional career database to bring home former residents of the region and to attract new talent to the area. Strategy 3: Continue present efforts and expand those efforts to maintain and grow the physical infrastructure in the region. In that regard, the following infrastructure areas appear to be critical to the economic competitiveness of the Central Wisconsin region: • Central Wisconsin Airport • Road and Bridge Infrastructure and Improvement • Power Generation and Transmission Infrastructure • Class I Rail Lines • Communication Infrastructure The central geographic location of the region is a competitive advantage if the means of transportation into, and out of the region are fast and efficient. Furthermore, this central geographic location is leveraged by the convergence of several forms of surface and air transportation, energy generation and transmission, and communication modalities. At the heart of this competitive advantage is the infrastructure related to road, rail, air transport, energy and communications. The region has done a good job of investing in these basic infrastructures, and there are several on-going projects that will further improve that infrastructure. Those projects include expansions in the area of roads and power infrastructure and they will fully come on line in the next three years. This will add to the infrastructure assets in the region that can support further economic growth and expansion. While the region has good infrastructure for the most part, and the main task will be to maintain that infrastructure, it is clear that limitations in air service and the capacity of the Central Wisconsin Airport are becoming increasingly important to businesses in the region. Currently, Marathon and Portage Counties contribute financial support to the regional airport. The entire 70 region benefits from the service and economic contribution of the airport. A cooperative effort with fiscal contributions by all three counties would help to move this agenda item along. Tactic 3A – Organize to identify, track, and support key infrastructure projects in Central Wisconsin. Rationale: Central Wisconsin relies heavily on good roads, bridges, air linkages, rail, power, and communications infrastructure to enable productive businesses and to support a high quality of life. Central Wisconsin has a large land mass but relatively modest population. It therefore needs to be highly focused on articulating the regional infrastructure needs. Action Steps: 14. A regional infrastructure committee should be formed to identify, track, and support regional infrastructure projects, plans and needs. 15. A regional plan should be developed to communicate those needs to transportation companies, state and federal regulators, and state and federal legislators. 16. With respect to roads and bridges, a plan needs to be developed to support and communicate to the Wisconsin DOT at the state level on ongoing and planned bridge and road projects. 17. With respect to Class I rail service, an ongoing regional dialogue with Canadian National Railroads should be established and concerns about service and the economic opportunities such as intermodal operations should be on the discussion agenda. 18. With respect to air service, financial support from all three counties and expansion of the Central Wisconsin Regional Airport and service to that airport should be a high priority. This discussion should lead to a unified regional plan to support and expand air service to the region. 19. With respect to power generation and transmission, there should be a clear identification of the power and transmission projects and the advantages that those projects give the region. 20. With respect to telecommunications, a regional telecommunications plan should be prepared that identifies the strengths and gaps in telecommunications. Such a study should build on the recently completed telecommunication plans for Marshfield and Wisconsin Rapids. 71 Tactic 3B – Leverage the current rail, road, power, telecommunications and power infrastructure to create economic growth opportunities in Central Wisconsin. Rationale: The central location of this region and the convergence of road, rail, power, air, and telecommunications infrastructure provide a rich opportunity for economic development. Action Steps: 21. Use the transportation cluster group identified in action step 3 to begin a discussion on the specific economic opportunities afforded by the infrastructure investments in Central Wisconsin. 22. Explore the possible development of an intermodal operation that takes advantage of the new Asia to Midwest Canadian National link that runs right through the heart of the region. 23. Consider linking logistics and intermodal opportunities in the region with Foreign Trade Zones (FTZ) in Milwaukee, Madison, or Green Bay. FTZs offer some financial advantages that may be of particular benefit to regions that host manufacturing and logistics operations. Strategy 4: Position Central Wisconsin as the hub of research and innovative thinking in alternative energy, logistics, and paper/forest products and manufacturing processes. Connect the existing research activities in the region to encourage the sharing of knowledge, joint projects, and support for additional research enterprises. Wisconsin is the number one paper making state in the U.S. Wisconsin has a natural resource base in forest products and a position as a national leader in that sector as well. Central Wisconsin is home to a substantial part of the papermaking and forest products business in the state. Despite its high rankings in these areas, no region of Wisconsin has really claimed the high ground of research and development in these sectors. The state possesses a national center on forest product research but this seems loosely connected to the industries in the state. The national center for paper research, what was known as the Paper Chemistry Institute, has moved to Georgia. Some efforts have been made to establish a greater research presence in the number one paper making state (notably a center in Green Bay), but a critical mass of research has not emerged anywhere in the state. In this regard, we believe that the Paper Science and Engineering Program at UW-Stevens Point, the research and applied technology work of its faculty and staff, and its pilot machines and labs provide a solid base for establishing a center of excellence in paper research and innovation in Central Wisconsin. We believe that Central Wisconsin could become a center for paper technology and innovation. To that end we suggest possible implementation steps in the next chapter. 72 Tactic 4A – Inventory the research activity now underway in the region and create a network that allows current researchers to share knowledge and common interests. Rationale: In the course of this study, we found a surprising amount of research activity and research infrastructure. We also found very good regional connections to state and national research resources. Action Steps: 24. Inventory the research programs, research assets and infrastructure, and research connections. Communicate this information to help inform the region about these assets. 25. Form a Central Wisconsin Research Alliance to network researchers in the region, to increase technology transfer to regional businesses, and to promote research as an economic enterprise in the region. Tactic 4B – Make Central Wisconsin a national center for research in paper manufacturing, BioRefining connected to paper manufacturing, and innovative paper products. Rationale: Wisconsin, the number one paper producing state in the nation, does not have a nationally ranked program in paper research and technology. The region possesses a major research asset in the fully operational pilot paper machine at UW-Stevens Point. Action Steps: 26. Support and build on the Paper Science and Engineering program at UW Stevens Point. This program has an existing base of support but needs greater support to emerge as a major center of applied paper and paper technology research. 27. Develop a program to educate students and the general public about BioRefining, nanotechnology, and their roles in the future of the paper and alternative energy/fuels industries. Strategy 5: Work to raise the educational attainment of current workers and potential workers in Central Wisconsin. In a global economy, the workforce will be the key ingredient to remaining competitive. Wisconsin and Central Wisconsin face substantial challenges in keeping the workforce globally competitive. The overall level of educational attainment in Central Wisconsin is average at best and will need to be improved considerably in the years ahead. Central Wisconsin has important higher education assets, including the UW-Stevens Point, UW-Marathon County, UW- Marshfield, Mid-State Technical College, and Northcentral Wisconsin Technical College. These institutions will be key assets in moving the regional educational attainment agenda forward. 73 Educational attainment at the high school and post secondary level must be a major focus of Centergy and economic development efforts in Central Wisconsin. In that regard, concrete programs to educate teachers, parents, and students about the changing economy and the changing nature of work must be a high priority in the region. As we pointed out in Chapter I, a key relationship that has emerged in the New Economy is the link between brain power as represented by education level and earning power. There is a direct relationship between the level of education and income level. Figure I-2 shows what has happened to the earning power of high school and college graduates over a twenty-five year period. The data shown is in constant dollars (no need to factor in inflation) and the gap between the annual earnings of a high school grad and a college grad has increased from $12,683 in 1978 to $23,291 in 2003. Over a lifetime of earnings, that gap amounts to about $1,000,000. In short, markets in the New Economy reward education and skills. For Central Wisconsin and Wisconsin in general to be competitive in the new, global economy, education level is a key. Figure VI-1 – The link between education level and earnings Difference Income Education (High School vs. Other Degree) 1978 2003 1978 2003 High School $22,856 $27,915 n/a n/a Bachelors $35,539 $51,206 $12,683 $23,291 Masters $46,885 $74,602 $24,029 $46,687 Source: U.S. Census Bureau In order to improve future per capita income levels in Central Wisconsin, the level of educational attainment must be increased. An essential part of this strategy will be creating partnerships with private business, PK-12 schools, technical colleges, the North Central Wisconsin Workforce Development Board, and university campuses. These partnerships should focus on educating teachers and staff to the changes in the global and regional economy and educating students on the 21st century learning skills they will need to prosper in the New Economy.4 Tactic 5A – Make raising educational attainment a high priority throughout Central Wisconsin. Rationale: The link between more education and higher earning power is well proven. To increase income levels in Central Wisconsin, raising educational attainment must be a high priority. Action Steps: 28. Make raising educational attainment the number one goal of Centergy and encourage other economic development entities to do the same. 4 The North Central Wisconsin Workforce Development Board currently has a business and education partnership involving five partners. 74 29. Put together an educational program for students and the general public that explains the new economy and the link between education and earning power. 30. Create a New Economy program with education, internships, and fellowships for teachers and administrators in all levels of education. 31. Study the plans of the education taskforce of New North and the 21st Century Learning Project of CESA #1 for ideas on linking education, careers and regional business clusters. Tactic 5B – Assess the gaps in training and degree programs available to Central Wisconsin residents and create a post secondary education plan for the region. Rationale: Access to post secondary educational programs is a key link to improving educational attainment in the region. Action Steps: 32. Form a post secondary education task force that includes PK-12 representatives. 33. Create an inventory of the post secondary education programs in the region and the gaps in programming that need to be filled. 34. Put together a post secondary education plan that can be used in advocating for support of existing educational programs and funding for additional training and degree programs. As part of that plan, include plans to serve the non-traditional students, particularly the existing workforce. 35. Communicate the post secondary education plan to students, the general public, and legislators. Strategy 6: Continue to develop and expand the sources of risk capital in the region and network those sources to the rest of the state and the Midwest region. In the near term, focus on the following: • Establishing a regional angel investment network • Exploring the formation of a regional community equity and debt capital fund. Technology, entrepreneurship, and risk capital are key parts of the formula for creating high growth in areas such as the Research Triangle, the Silicon Valley, and closer to home, in Dane County, Wisconsin. Central Wisconsin has been fortunate to have two angel investing groups in the region that have invested in early stage companies. 75 These early efforts need to be expanded and the region needs to explore the expansion of angel investing capacity and the creation of a regional community risk capital fund to expand the risk capital available in the region. The presence of angel and community risk capital groups has the effect of changing the thinking about risk taking and investment. In the late 1800s and early 1900s, Central Wisconsin like much of Wisconsin was built by entrepreneurs who risked their financial fortunes on building the paper, lumber, and manufacturing industries that made the state prosper. We were successful as entrepreneurs and large companies were built and for a number of generations it made economic sense to work for large companies. With globalization of the economy, the need for entrepreneurial activity has reemerged. We need new companies to replace those that have been acquired, failed, or been downsized. Thus the entrepreneurial climate of the state needs to change to encourage new businesses. In the New Economy, risk, rapid change, and failure are standard components of success. Angel and community capital groups help to change the thinking about risk taking and are key to changing the business and investment climate. Tactic 6A – Encourage and support a regional approach to angel investing and to community loan and equity funds. Rationale: A clear gap in the Wisconsin economy is the lack of sufficient angel and venture capital to fund new and expanding enterprises. Central Wisconsin has the advantage of being the home base for 2 of the 13 active angel groups in the state. In order to leverage that advantage and create larger pools of capital capable of funding larger projects or sustaining funding on start-up companies, regional capital pools need to be created. Action Steps: 36. With respect to angel capital, continue to develop the concept of a Central Wisconsin regional angel fund currently being formed as Centergy Investment Partners, Inc. 37. Inventory the region's community based loan funds and create a directory of these capital sources for existing and new businesses. 38. Explore the possibility of combining existing loan funds to create a larger regional capital pool. Strategy 7: Increase the amount and pace of technology transfer to regional businesses by forming a technology transfer process that can readily access and connect the sources of new ideas and technology developed in the region, in the state, in the country, and in the world to existing and emerging businesses in Central Wisconsin. A high growth economy needs to be connected to sources of new technology and processes. Regular forums that identify and educate people about new technology such as the MIT forums 76 and the Wisconsin Innovation Network (WIN) are examples of ways to encourage more technology transfer in a region. Central Wisconsin needs to establish a strategy that uncovers relevant technologies for existing businesses, takes research produced in the region to market, and provides a channel of ideas and products that can feed new business start ups. Tactic 7A – Establish and implement a technology transfer plan to identify key technologies used and needed by regional business and to increase technology transfer to the area to support existing businesses and new business start-ups. Rationale: Technology is a prime driver in the New Economy. Accessing technology and supporting the transfer of technology to regional businesses keeps them competitive and growing. Action Steps: 39. Create a technology transfer group or task force to assess the key technologies that are in use or are needed by regional businesses. 40. Build connections and networks with sources of new technology in the region and in the state. Include organizations such as the Marshfield Clinic, the U.S Forest Products Laboratory, the U.S. Department of Agriculture, the Wisconsin Alumni Research Foundation and its subsidiary WiSys, and the UW Madison College of Agriculture and Life Sciences. Sponsor an annual conference that brings these sources of technology transfer in contact with regional businesses and entrepreneurs. 41. Use organizations such as the regional Wisconsin Innovation Network Chapter to highlight new technologies and new companies and new products that use technology. 42. Consider jump starting the technology transfer process by partnering with the Center for Advanced Technology Transfer (CATI) located in southeast Wisconsin and Clean Technologies Inc., an organization that funds alternative energy projects statewide. 43. Create a business and public education program that educates and illustrates to the general public how technology transfer is done and the economic potential of effective technology transfer. Strategy 8: Further develop the Central Wisconsin regional brand (Centergy) and regional thinking and action by educating and promoting Centergy and Central Wisconsin to internal audiences within the region and then to external audiences in other regions of the state. 77 Recent region economic planning efforts have illustrated the importance of regional branding initiatives. From the "Milwaukee 7" to the "New North", these branding initiatives have been used to establish regional identity and to provide a banner for further regional economic development programs. Unlike most of the regional economic opportunity projects we have worked on, Central Wisconsin had a brand in Centergy and a regional economic development group before our study began. This brand helps to identify the organization and the region. In the course of our study, many people said they were familiar with the name. However most people in Central Wisconsin didn't know much about Centergy as an organization, or Centergy as a brand. The first order of business or strategy should be to educate the regional population on Centergy, its mission, the brand, and now the Economic Opportunity Plan. Thereafter, or perhaps concurrent with that effort, the Centergy brand and organization needs to get statewide exposure so that it is recognized in the same breath as "New North' and the "Milwaukee 7". Tactic 8A – Continue to develop the Centergy brand as a way to stake out a regional brand and identity. Rationale: While many people in the region that we contacted for this study had heard of Centergy, they knew little about the organization and the brand concept. Most people that we contacted outside of the region had little knowledge about the brand. Action Steps: 44. Create an internal Centergy publicity and education campaign aimed at informing the Central Wisconsin regional audience about the Centergy brand and regional concepts associated with Centergy Inc. 45. Create an external Centergy publicity and education campaign aimed at informing external audiences such as other regional groups (New North, Grow North, and Milwaukee 7), state agencies, federal agencies and foundations about the Centergy brand and regional concepts associated with Centergy Inc. 46. Leverage and expand the regional planning and action concept by selectively working on projects of mutual interest with the New North group in northeastern Wisconsin and other regional groups such as Grow North that present opportunities of mutual interest. 47. Create projects, meetings and events that regularly demonstrate that Central Wisconsin is and acts as a region and communicate the success of those events to the public. 78 48. Form a group to look at how the arts and tourist attractions can be supported and marketed on a regional basis to attract visitors and provide the high quality of life in the region. Strategy 9: Further improve the Central Wisconsin business climate to encourage economic growth and the establishment of new businesses in the region. The State of Wisconsin lags behind 45 other states in the formation of new businesses. Central Wisconsin lags behind the State of Wisconsin and several other regions of the state in the formation of new businesses. New business formation is critical to building fast growing business. New and small businesses are the major source of job growth nationally and are the business base of the future. Central Wisconsin must develop a new business formation strategy that more nearly matches the average rate of business formation in then U. S. Such a strategy could build on the presence of risk capital and the existing pool of entrepreneurs in the region. Tactic 9A – Coordinate business support services for new and expanding businesses and create an information source that informs businesses and entrepreneurs about access to these services and to available financing. Rationale: There are many services available to entrepreneurs, farmers, and existing businesses available in the region or state. Unfortunately as a recent state audit revealed, there is little coordination of those services and programs. Central Wisconsin should take the lead in this area and create a regional service network and directory that educates and provides access to business support services. It should further establish clear linkages to sources of equity and debt capital for new and expanding businesses. Action Steps: 49. Form a task force of business service users and providers to inventory the business support programs in Central Wisconsin and at the state level. 50. Create a common pathway to business support service that can be used by existing businesses and people seeking to start new businesses. 51. Consider sponsoring a regional business plan contest to encourage entrepreneurs to form new businesses. Tactic 9B – Take direct action to attract and finance new businesses and the expansion of existing, high growth businesses. To that end, work to improve deal flow in the area that leads to attracting entrepreneurs to Central Wisconsin. Rationale: Central Wisconsin needs to jump start the growth of new businesses. The region needs to establish new businesses to replace those that leave and to generate regional growth. 79 Action Steps: 52. Sponsor a regional business plan contest with a substantial cash prize to encourage entrepreneurs to form new businesses. 53. Explore the establishment of a "green" incubator that would house manufacturing and service businesses that are environmentally oriented. 54. Contact and seek to attract businesses that finish in the top ten in the Governor's business plan contest. 55. Improve deal flow that could lead to new businesses in Central Wisconsin by using the Wisconsin Angel Network's deal pipeline utility. 56. Support, publicize, and expand the entrepreneurial education courses offered by several chambers and economic development corporations in the region. 57. Explore the feasibility of expanding, creating or attracting logistics management companies to the region. 58. Action step 11 from strategy 2- Evaluate how new businesses might be formed to market training in Central Wisconsin and beyond. Consider how technical college workforce training programs might help create spin off workforce training businesses. Strategy 10: Establish an organized regional approach to seeking state, federal and private economic development and grant funding for initiatives that come from this study and for ongoing and other projects aimed at improving the regional economy. While there have been some projects that have won the support of state or federal funding (in the latter case a very successful record of congressional earmarks), we believe that a coordinated regional approach to the U.S. Economic Development Administration (EDA) and state agencies such as the Department of Commerce and the Department of Agriculture would improve the visibility of the region and enhance success in getting more projects funded. We recommend using this report as the foundation for a case statement that lays out the regional vision for improving the regional economy and that can be the common message heard by state and federal agencies and officials. Tactic 10A – Use a regional approach to identify funding opportunities and regionally support funding requests for local communities, counties and regional agencies. Rationale: Central Wisconsin needs to take a regional approach to funding as it competes with much larger regions for limited government and foundation funding. 80 Action Steps: 59. Identify funding sources and a funding plan to support the implementation of the Central Wisconsin Economic Opportunity Plan. 60. Form a regional group that will take funding opportunities to the next level of writing proposals and lobbying government agencies. 81 82 CHAPTER VII: IMPLEMENTATION, ORGANIZATION, PLANS AND STEPS In this chapter, we suggest implementation plans and action steps that involve the economic opportunities and strategies discussed in Chapter V and VI. To successfully implement this plan, we think that there must be thought given to an organizational structure that can organize, staff, and finance the resources needed to accomplish the goals in the Economic Opportunity Study. On the pages that follow, we have outlined our thinking about how to organize and implement the recommendations in this report. We start out with the premise that implementation is already underway in the form of initiatives and programs of existing groups in Central Wisconsin. We may have overlooked some of these efforts and they will need to be incorporated into this implementation proposal. In the end, the people in Central Wisconsin should shape the implementation and the setting of goals and priorities. As consultants, we can suggest recommendations and organizational direction but the regional community must deal with the practical problem of designing a practical implementation scheme. A Few Comments on the Overall Organization Study Implementation Infrastructure It is our experience that an economic opportunity plan requires an organization devoted to implementing recommendations and strategies. A partnership, committee or similar structure that can implement the plan over a three to five year period will help to insure that positive results flow from this planning effort. At this point, it appears to us that the most logical organization to coordinate the implementation of this study is Centergy with an expanded Centergy Board. Private sector leadership of this effort is very important. It is also important that members of the implementation group be committed to staying with the plan over a period of years to help transition through changes in the local leadership. Action Steps: 61. Expand the Centergy board to include representation for workforce development, education, regional planning and technical and scientific experts. Work to increase the number of private sector leaders on the Centergy Board. 62. Form an Implementation Group or Taskforce within Centergy that will work to implement the Economic Opportunities Plan over the next 3-5 years. Business participation and leadership on this committee will be essential. 63. Discuss staffing needs, budget, and opportunities with the North central Regional Planning Commission and UW Stevens Point. Each organization has indicated support for this project and the possibility of providing general and technical support. 83 64. Draw on the human capital (brain power base) in the region and look to the University of Wisconsin Stevens point and other area higher education institutions for paid and unpaid internships that can help staff the implementation and fund raising for implementation. 65. Create an organizational structure that serves to support implementation and groups that may be formed to carry out implementation. 66. Continue to support the formation of cluster groups and merge the existing separate cluster groups in paper and forest products and transportation that are already in place in Central Wisconsin. Below we show an overview of a possible organization plan to begin to carry out the implementation of the Central Wisconsin Economic Opportunity Study. The boxes below the Centergy organization represent committees and taskforces that might be formed to implement strategies and recommendations in the study. These organizational elements may have limited lives or they may end up as ongoing parts of Centergy. The organization diagram below is one way to think about implementation but we recognize that other considerations may require a different organizational scheme. We note that the Government Relations committee and the Marketing & Communications committee are existing operating committees of Centergy. In this organizational structure, these two committees would serve all of the committees and organizations formed to implement the plan. 84 Group / Organization Infrastructure Goals Continue efforts to build and maintain the road, bridge, rail infrastructure in Central Wisconsin Work to improve and build up infrastructure such as air service, airport capacity, and energy transmission grids Projects Central Wisconsin Infrastructure Agenda Steps Form infrastructure committee or task force Create an infrastructure agenda for Central Wisconsin Maintain regular contact with the Wisconsin DOT at the state level in support of existing and planned highway and bridge projects Engage Wisconsin DOT in exploring infrastructure needs and educate DOT on the Central Wisconsin economic plan Leadership Chambers of Commerce Private industry - rail, tracking, warehousing Public officials North Central Wisconsin Regional Planning Commission 85 Group / Organization Education Goals Increase regional educational attainment Educate students and the public on the changing New Economy and the changing nature of work Educate teachers and staff on the changing global and regional economy, occupational changes and 21st century learning skills Projects Public education / communication initiative Steps Form the group Learn about and explore the 21st Century Learning Program being implemented by CESA 1 Leadership The University PK-12 Technical colleges Workforce Development Boards Private industry 86 Group / Organization Research & Tech. Transfer Goals Identify and network existing research activity in Central WI Form a Central Wisconsin Research Consortium Support expansion of existing research centers and programs Attract new research activities to Central Wisconsin Improve tech transfer to regional businesses Projects Central Wisconsin Research Consortium / Network Central Wisconsin Technology Transfer Project Steps Explore establishing a CW research network - Meeting - Agenda for years 1,2,3 Meet with CATI head Matt Wagner to explore using CATI to jump start tech. transfer Leadership Hancock Ag Research Station UW Stevens Point Marshfield Clinic 87 Group / Organization Risk Capital Goals Increase the risk capital capacity in Central Wisconsin Projects Regional Angel Network - Explore establishing a regional angel investing network Community Capital Fund - Explore establishing a regional community capital fund Steps Ongoing - Regional Angel Network discussion Leadership Centergy; Active angel groups in Marshfield and Stevens Point; Department of Financial Institutions; Wisconsin Angel Network (WAN) North Central Regional Planning Commission 88 Group / Organization Entrepreneurship Goals Increase the rate of formation of new businesses in Central WI Projects Business services inventory Central Wisconsin business resource website / center Central Wisconsin Business Plan Contest Steps From Central Wisconsin Entrepreneurship Council (or Task Force) Seek Department of Commerce grant funding Explore the resources and a relationship with the Kaufmann Foundation Leadership UWSP SBDC UW Extension Chambers of Commerce Private sector – banks; real estate developers; entrepreneurs; 89 Group / Organization Clusters Goals Organize industry groups for major clusters in Central Wisconsin Use the cluster organization to determine gaps and needs Projects Central Wisconsin Business and Agriculture Clusters Steps Identify existing and emerging clusters in Central Wisconsin Seek information, advice, and leadership from existing cluster work at the Heart of Wisconsin Business & Economic Alliance and the North Central Wisconsin Workforce Development Board Form up cluster interest groups Form a regional arts and tourism group Leadership North Central Wisconsin Workforce Development Board Heart of Wisconsin Business & Economic Alliance North Central Regional Planning Commission 90 Group / Organization Workforce Goals To maintain and improve the productivity of the workforce in Central Wisconsin To position Central Wisconsin as a center of workforce development services and businesses Projects Workforce Development Needs, Gaps and Resources Workforce Development Entrepreneurship Project Steps Form workforce development committee or task force Inventory workforce development programs and businesses Seek information, advice and leadership from the Workforce Development Board, the technical colleges and private industry. Leadership North Central Wisconsin Workforce Development Board Mid-State and North Central Technical Colleges Private industry - HR directors at major employers 91