1. Northeast Wisconsin Economy ASQ November 14, 2005 Al Hartman Dean College of Business UW Oshkosh

2. Historical Perspective Dr. David J Ward Northstar Economics

3. THE ECONOMIC STRUCTURE OF THE U.S. AND WISCONSIN IS CHANGING.

4. 4 EVOLUTION OF ECONOMIC PROSPERITY 19 th Century – Bigger and Better Farms 20 th Century – Bigger and Better Factories 21 st Century – Bigger and Better Ideas

5. 5 U.S. SECTOR EMPLOYMENT TRENDS (% SHARE) Other (Retail, Construction, Government, etc.) Private Services Manufacturing Agriculture YEAR

6. Source: Alliance Capital Management, DWD 6 BRAZIL20% JAPAN 16% CHINA 15% (98 Million Jobs) U.S. 11% WISCONSIN14% (80,000 Jobs) Source: Alliance Capital Management; DWD LOSS OF MANUFACTURING JOBS 1995-2002

7. 7 THE NEW ECONOMIC EQUATION IN A KNOWLEDGE-BASED ECONOMY BRAIN POWER EARNING POWER =

8. 8 THE EARNINGS GAP HAS WIDENED REAL $ TERMS = 2001 Dollars Source: US Census Bureau Education. Income (Dollars) Difference (High School vs. Other Degree) 1981200119812001 High School$23,006$26,176n/a Bachelors$36,724$50,325$13,718$24,150 Masters$48,830$63,461$25,824$37,285

9. WISCONSIN IS FALLING BEHIND IN A NUMBER OF ECONOMIC MEASURES

10. 10 THE BRAIN DRAIN NET MIGRATION OF COLLEGE GRADUATES Estimated Number of Persons Over 25 Years Old With a Bachelor’s Degree Number of Bachelor’s Degrees Produced Estimated Net Brain Drain or Net Brain Gain 198919991989- 1999 Minnesota577,920953,920234,945141,055 Montana*106,977134,16042,976-15,793 North Dakota89,24489,20045,022-45,066 South Dakota79,672110,84840,669-9,493 Wisconsin571,725790,600269,647-50,772 Source: fedgazettte, January 2003, citing Postsecondary Education Opportunities * Population data revised by the Federal Reserve Bank of Minneapolis

11. 11 POPULATION WITH 4-YEAR DEGREE AGE 25 OR OLDER Source: U.S. Department of Education, 2002 2002State RankWorkforce % Minnesota830.5 Illinois1627.3 U.S. Averagen/a26.2 Wisconsin3024.7 Iowa3721.1

12. 12 PER CAPITA INCOME Source: U.S. Census Bureau 2002IncomeRank Minnesota$ 33,8958 Illinois$ 33,3209 U.S. Average$ 30,832n/a Wisconsin$ 29,99622 Iowa$ 28,14133

13. 13 PERSONAL INCOME PER CAPITA OF THE U.S., MINNESOTA, AND WISCONSIN Source: Bureau of Economic Analysis

14. 14 VENTURE CAPITAL DISBURSEMENTS 200120022003 United States $41.3 Billion (4,712 Deals) $21.2 Billion (3,012 Deals) $18.2 Billion (2,715 Deals) Minnesota $542 Million (93 Deals) $327 Million (55 Deals) $204 Million (58 Deals) Wisconsin $94 Million (25 Deals) $64 Million (11 Deals) $45 Million (10 Deals) Source: Pricewaterhouse Coopers / Venture Economics / National Venture Capital Association Money Tree Survey

15. 15 HIGH TECH JOBS Source: State New Economy Index, 2002 Minnesota 7 th Wisconsin 31 st State Rankings

16. 16 UNLESS WE CHANGE THE CURRENT ECONOMIC STRUCTURE, THE FUTURE ECONOMIC RESULTS WILL NOT CHANGE.

17. 17 Annual Average Growth 1973 – 1998 (Actual) 1999 – 2024 (Forecast) U.S. Average2.8%2.3% Wisconsin2.3%1.8% Source: Standards & Poor’s / DRI Forecast PAST AND FUTURE INCOME GROWTH

18. 18 PER CAPITA INCOME FORECAST IN 2024 Per Capita Income U.S. Average$ 48,803 Wisconsin$ 40,598* * 83% of U.S. average

19. 19 Idaho Kentucky* Oklahoma Alabama* Utah Louisiana* STATES AT 83% OR LESS OF U.S PER CAPITA INCOME Montana Arkansas* New Mexico West Virginia* Mississippi* * States rank in the bottom 10 of PPI rankings. Only Idaho and Utah are in the top half.

20. 20 COULD IT HAPPEN TO WISCONSIN? Per Capita Income Rank 19652000 Indiana1733 Iowa1934 Source: Indiana Fiscal Policy Institute

21. 21 LOW INCOME GROWTH LEADS TO : GRADUAL DETERIORATION OF ECONOMIC CONDITION AND QUALITY OF LIFE Lower per capita income Decreased tax base / Budget deficits Lower bond ratings Decreased school funding and teacher salaries Less public services Lower quality of life

22. 22 GROSS STATE PRODUCT GROWTH MINNESOTA VS. WISCONSIN Gross State Product in Billions of Current Dollars Source: Bureau of Economic Analysis

23. 23 WISCONSIN EMPLOYMENT MANUFACTURING

24. 24 WISCONSIN NEEDS TO CREATE A HIGH GROWTH ECONOMY.

25. 25 CREATING THE NEW FUTURE A HIGH GROWTH ECONOMY “IMAGINATION IS MORE IMPORTANT THAN KNOWLEDGE.” Albert Einstein

26. 26 2 millers 1 hardware dealer 1 traveling salesman 1 flour mill Funds from family and friends Technology A WILD GAMBLE: MARCH 1872

27. 27 THE PAPER INDUSTRY GROWS IN THE FOX RIVER VALLEY 1872 Kimberly Clark 1874 Patten Paper Co. 1874 Winnebago Paper Co. 1876 Menasha Paper Co. 1878 Atlas Paper Co. Source: Factories in the Valley, State Historical Society, 1969 Payoff: The Wisconsin Paper Industry 55,000 high paying jobs

28. 28 Brain Power Technology Venture Capital and High-Tech Startups Research and Development Quality of Life NEW ECONOMIC DRIVERS

29. 29 WE NEED A HIGH-GROWTH ECONOMIC STRATEGY HIGH-GROWTH ECONOMIES ARE BUILT ON BRAIN POWER AND NEW IDEAS.

30. 30 VISION 2020: A MODEL WISCONSIN ECONOMY Published by the Wisconsin Technology Council Funded by Mason Wells Private Equity Economic Research by NorthStar Economics

31. 31 ANGEL INVESTING GROUPS IN WISCONSIN 1. Wisconsin Investment Partners, LLCMadison 2. Early Stage ResearchMadison 3. Silicon PasturesMilwaukee 4. Origin Investment Group, LLCLa Crosse 5. Golden Angels NetworkMilwaukee 6. Chippewa Valley Angel NetworkEau Claire 7. Marshfield Investment Partners, LLCMarshfield 8. St. Croix Valley Angel Network, Inc.River Falls 1 4 5 6 7 2 3 8

32. 32 REGIONAL DEVELOPMENT COOPERATION AND ACTION Momentum Chippewa Valley TechStar / Southeastern Wisconsin 7 Rivers Region / Tri-State (WI, MN, IA) NEW Economic Opportunity Study Technology Zone Partnerships Regional WIN Chapters

33. 33 David J. Ward, Ph.D., President Phone: (608) 279-3393 Email: dward@northstareconomics.com Fax: (608) 441-8064 Web: www.northstareconomics.com

34. 34 Northeast Wisconsin Today

35. 35 NEW CORE Coalition on Regional Economy Study conducted Set of initiatives created and assigned Wisconsin Innovation Network – Northeast Inventors Network Intellectual Assets Network Angel fund

36. 36 UW Oshkosh Entrepreneurship Emphasis started-1990 E-seed program initiated – 2000 Venture Center – UW Oshkosh/Fox Valley Technical College - 2005 Federal Support for Competitive Manufacturing through Innovation Management (pending) - 2006

37. Questions???