WEDC was formed in 2011 by the Wisconsin Legislature. We are a public-private entity focused on job creation. The formation of the WEDC was meant to transform the way economic development is done in the state.WEDC has a 15-member board of directors composed of state legislators, departmental secretaries and private business owners. The board provides WEDC with strategic leadership and operational oversight representing statewide public and private economic development interests. Governor Walker and Assembly and Senate leaders from both parties appoint members of the board.The majority of our funding comes from two sources: The Wisconsin State General Purpose Revenue and the Economic Development Fund, which is tied to certain segregated state income.WEDC also administers a number of federal programs. This funding is highly variable from year to year and is program specific.
WEDC is often compared to our predecessor agency, the Wisconsin Department of Commerce. (click)While there is overlap between what we do and what the Department of Commerce did, WEDC was established with a new structure guided by different priorities and objectives.We use similar financial tools to help businesses start, grow and relocate their operations to Wisconsin, but we do much more to create new economic opportunities for the state.In fact, WEDC’s strategic plan directly addresses weaknesses that existed in Wisconsin’s economic development capabilities identified by the Be Bold study, which received broad bi-partisan support.
One of the most significant changes you will find at WEDC is in the customer service model we’ve developed.In addition to increasing our assistance delivery capabilities, we’ve enhanced our network of economic development “agents”. We have increased our regional and community account manager ranks,And we’re working more closely with our statewide economic development partners than ever before.We’re also applying unprecedented resources to marketing the state as a good place to do business.We’re thinking hard about our customers’ experiences, from the moment they first enter our business development pipeline. In short, we are doing business like a business, and striving always to improve our service and our results.
Our divisional structure reflects critical drivers for Wisconsin’s economy.We need to:Ensure that businesses operating here continue to thrive. The majority of new jobs created in our state will come from businesses already here. And companies looking to relocate to Wisconsin are going to look to our existing businesses as a barometer of the state’s economic climate. Provide support to entrepreneurs. Filling the start-up pipeline is critical to Wisconsin’s economic future. Entrepreneurs need to know that they can succeed in Wisconsin.Support and nurture driver industries that provide or will provide a competitive advantage for the state.Encourage globalization of Wisconsin companies while attracting capital from international investors.
Even with our increased regional representation, we fully recognize the need for coordination between WEDC and the many stakeholders who share our interest in creating and sustaining a vibrant economy. (click)We understand that there are organizations on the ground that are often closer to the businesses in their community that we are. For this reason, we remain in close contact with our economic development partners to ensure that the full slate of Wisconsin’s business development tools are made available to companies seeking to maximize their potential:We call this network of economic development resources an “extended enterprise.” It includes these and many more very capable organizations throughout the state.
As we work with these partner organizations throughout the state, we also strive to improve Wisconsin’s responsiveness to businesses looking to startup, grow or relocate here.We have developed and implemented tools that help match businesses with opportunities within Wisconsin. These include:ConnectED – An online searchable database of economic development resources throughout the stateSite Selection and Economic Modeling tools – to help partner organizations market available properties.LocateInWisconsin.com – a free online search tool for businesses looking to relocate to or expand in WisconsinCertified in Wisconsin – consistent standards developed in partnership with Deloitte Consulting that signal that key approvals, documentation, and assessments are in place for a property, thereby increasing its marketability.WEDC is also creating and supporting professional development opportunities for economic developers throughout Wisconsin.And we’re advancing large-scale initiatives to improve the state’s business development efforts. We are working to:Increase the availability of capital through regionalized revolving loan funds;Improve responses to site selectors’ requests for proposals (Project Apollo);Create a shared platform for business development intelligence (Salesforce)
One of WEDC’s core principles is to “Measure and Be Accountable.” We make job creation and retention part of our contracts with companies and partner organizations. And, as a result, we are able to report the anticipated impact of our investments.
WEDC and our contracted partners provided financial and technical assistance to more than 1,600 businesses in our 2012 fiscal year.Technical assistance takes many forms, from business plan development to export strategy consulting.We also provided assistance to 100 communities.As part of WEDC’s transition, we reorganized our community development services, placing greater emphasis on downtown development.Our Main Street Program provides technical support to Wisconsin communities committed to revitalizing their traditional business districts.WEDC also launched a new program—Connect Communities—in 2012 to provide assistance to communities interested in redeveloping their urban commercial districts.
As the result of investments WEDC made in 2012, we anticipate a total of 23,759 jobs to be directly impacted. These are jobs that have been or will be retained or newly created as a result of the work we do.
WEDC uses a range of investment tools from state and federal programs to help businesses start up, grow, and relocate in Wisconsin. We work with local economic development partners to determine what state assistance a company is eligible to receive.
Direct financial investment options include:[Refer to slide]While incentives such as these are important to retaining and attracting businesses, so too are our low business costs, diversified economy, strong infrastructure, and business-friendly tax and regulatory policies.
Keep in mind that it is not only WEDC’s funds doing this work. We use “leverage” as a key metric to gauge the efficiency of our investments.This slide shows how much additional funding our initial project or contractual investments were able to attract.As you can see, the total co-investment leverage WEDC’s awards attracted was over 4-to-1 in 2012.
In addition to leverage, we also state specific job creation requirements in our contracts.Our goal is always to create jobs, and the companies we work with understand this, as this quote from Bostik’s CEO attests.When companies “win” by achieving a level of success that requires more workers, Wisconsin also “wins”.
I’ve mentioned our partners a number of times in my presentation.You may be wondering who these partners are and why WEDC relies so heavily on them. Can’t we simply do this work ourselves?The simple answer is, “No.”By investing in partner organizations with specialized capabilities and a proven track record of success, WEDC increases the economic development impact of the funds we deploy.Partner investments include contracted business assistance services not provided by WEDC as well as strategic support for small business assistance operations throughout the state.
The many partner organizations we work with are listed here.Each of these organizations is expected to match WEDC investments at a ratio of greater than 2-to-1.
WEDC’s Division of Business and Industry Development promotes economic activity in Wisconsin by supporting “driver industries” in the state.Driver industries are those that hold the greatest promise for future growth.Working collaboratively with our regional economic development partners, WEDC engages with industry sectors and sub-sectors not at the company level, but at the trade organization level.We form working relationships with established trade consortia and industry cluster organizations in order to build upon Wisconsin’s existing industry strengths.
Milwaukee’s International Water Technology Center scheduled for completion in the summer of 2013 is good example of how WEDC works with a well-organized industry group to improve Wisconsin’s economic standing.WEDC is providing a grant to the Water Council to underwrite the rent for new tenants in the 7-story, 98,000 square-foot building which will allow occupants access to a specialized water flow laboratory.This facility and the presence of researchers from the world’s only graduate-level fresh water sciences program will streamline the testing of new water technology products, solidifying Wisconsin’s status as a world leader in water technology advancements.
WEDC also believes that business ownership in our state should reflect the strength and diversity of our population.We support minority business development by working with and providing seed grant funding to the state’s minority chambers of commerce.We have also brought these groups and others together to form a minority business coalition with the aim of building collaboration among participants faced with similar challenges.
Numerous studies have shown that start-up businesses drive the majority of job creation. WEDC is committed to improving the entrepreneurial climate in the state by creating new opportunities and supporting a culture of innovation.
WEDC’s Entrepreneurship and Innovation Division supports new business creation and development by:Making early-stage investments in entrepreneurs and high-growth companies;Managing and expanding funding opportunities through Wisconsin’s investment tax incentive programs;Defining accelerator models for future business creation throughout the state;And investing in partner organizations that provide entrepreneurship support services.
WEDC’s Qualified New Business Venture Program provides a 25% Wisconsin tax credit for angel investors and qualified venture capital funds that invest in companies that have been designated Qualified New Business Ventures.In 2012, WEDC certified 35 new companies as Qualified New Business Ventures.As you can see from these 2011 figures, the Qualified New Business Venture Program is driving significant investment in new and emerging Wisconsin companies.
Wisconsin was the first state in the nation to help VETransfer launch an innovative seed investment program and accelerator for veterans. The goal of WEDC’s seed investment is an estimated 15 grants to Wisconsin veteran startups ranging from $2,000 to $10,000.WEDC has also invested in VictorySpark, the first veteran-centric seed accelerator fund in the world.Through WEDC’s Capital Catalyst Program, we also provide matching grants to regional organizations or communities to establish capital to provide seed funding for start up and emerging companies in their areas. The Innovation Foundation of Western Wisconsin is an example of this investment strategy.
Gone are the days when companies can rely exclusively upon domestic demand to fuel their growth. The fact is, 95% of the world’s population resides outside the United States, And in the next 20 years, Asia’s middle class, for example, is projected to grow six fold. This improvement in living standards taking place worldwide creates new opportunities for Wisconsin companies, particularly those whose expertise aligns with infrastructure development.
In 2012, WEDC’s International Business Development Division realigned resources to focus on markets with the greatest growth potential for Wisconsin products. We have increased our global representation from 4 international offices to 29, representing 36 countries.
To help Wisconsin companies take advantage of export opportunities, WEDC partners with the Manufacturing Extension Partnership and Northwest Wisconsin Manufacturing Outreach Center to deliver ExportTech training. In 2012, WEDC and these partners delivered tailored ExportTech training to 29 businesses who reported an average of $500,000 in savings and sales increases within nine months of completing the program.In 2012, WEDC also launched a Global Business Development Grant Program which provided over $124,800 to 19 Wisconsin companies for export training and market expansion.
WEDC also hired a dedicated foreign direct investment managers in 2012, and for the first time is pursuing capital from around the world.And the effort is paying off.In September, WEDC successfully hosted a group of investors from China’s PiYi investment firm. The group received information on 100 opportunities in four states. Of the 25 companies they identified for further negotiations, nine were from Wisconsin!
In September 2012, WEDC launched a brand campaign promoting Wisconsin’s business climate. Our brand, In Wisconsin, features Wisconsin businesses that have made a name for themselves as innovative, resourceful industry leaders.
The In Wisconsin campaign is about more than ads. And it is about more than the companies that are featured. In Wisconsin is about why Wisconsin is a great state for business. It is also about the resources available to help companies succeed.
The formation of WEDC and other pro-business policies recently adopted in the state have improved the perception of Wisconsin’s business climate, as evidenced by a number of respected rankings. In addition to these publications, Site Selector magazine recently placed Wisconsin at number 13 in its study of the top 25 business climates. That’s the first time we’ve made this list in more than a decade.
I thank you for the opportunity to share this information about WEDC with you, and I would be happy to answer any questions you may have.For questions relating to WEDC’s financial tracking and reporting:“Let me first of all be clear, WEDC did not ‘lose track’ of our loans as has been reported. We have always known what investments we’ve made in what companies. In our transition from the Department of Commerce, however, we did experience lapses in collecting on our loans and fulfilling the reporting requirements from these companies. We are well on our way to implementing the systems and processes to correct these weaknesses, which should not in any way discredit the many successes WEDC has achieved.”
ALIGNING RESOURCES WITH NEEDS
Division of Economic
Division of Business and
Division of International
• Site Selection and Economic Development Modeling
• Certified In Wisconsin
• Revolving Loan Funds
• Project Apollo
DIRECT FINANCIAL ASSISTANCE
Business retention and expansion grants and loans
Technology development loans
Workforce training grants
• Job Creation and Retention
• Capital Investment
• Employee Training
Early-stage business investment tax credits
GRANT AND LOANS
Total Number of Awards
Total Co-Investment Leverage
WEDC exceeded our expectations, despite a
very demanding internal timeline. We respect
and accept our accountability to provide
the evidence we are doing what we said
we would do to earn the financial
incentives awarded to Bostik for our site
consolidation project…. We believe this is a
win/win for Bostik and Wisconsin!
— Robert L. Marquette, President and Chief Executive Officer
Leveraging industry leadership to accelerate growth and highquality jobs by advancing high-impact initiatives in Wisconsin
Engagement decisions driven by “efficiency” and
Sector partners must exhibit:
• High organizational maturity
• Strong stable leadership
• Stable financial position with strong industry support
• Sustainable and scalable business model
• Immediate and recurring positive impact
• Create or strengthen a unique competitive advantage for Wisconsin
• Attract co-investment funds at a ratio of 3:1
to solidify helps solidify
Wisconsin’s status as a
world leader in water
International Water Technology Center
MINORITY BUSINESS DEVELOPMENT
Established revolving loan funds:
• American Indian chamber of Commerce
• Hmong Chamber of Commerce
Working to establish similar programs with:
• African American Chamber of Commerce
• Hispanic Chamber of Commerce
Each chamber provides matching funds
Minority business coalition formed to build collaboration
among participants with similar challenges
QUALIFIED NEW BUSINESS VENTURES
Qualified Angel Investments
With $6.6 million in angel credits
claimed, $26.5 million in qualified
angel investments was achieved in
calendar year 2011.
With $4.6 million in venture fund
credits claimed, $18.5 million in
qualified investments was achieved
in calendar year 2011.
Venture Fund Investments
Innovation Foundation of Western Wisconsin
India, Middle East, Africa
United Arab Emirates
• Delivered in collaboration with Wisconsin Manufacturing Extension Partnership
(WMEP) and Northwest Wisconsin Manufacturing Outreach Center (NWMOC)
• 29 participating companies in FY12
• $500,000 in average savings and sales increases within nine months of program
Global Business Development Grant Program
• $124,800 in grants to 19 Wisconsin companies in FY12 for export training and
FOREIGN DIRECT INVESTMENT
Dedicated foreign direct investment manager
Wisconsin’s most concentrated effort to attract foreign capital
• Organized and hosted PiYi investors from China in September 2012
• Of the 100 investment opportunities presented in 4 states, 25 companies were
shortlisted for further negotiations. Nine of these were from Wisconsin!
Best/Worst States for
America’s Top States
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