IQ corridor: more talk than walk

For decades, political and economic thinkers have been talking up the potential virtues of closer connections between Madison and Milwaukee.

The theory is that if Wisconsin looked more like Minnesota, we Badgers might be able to keep pace with the Gophers’ higher level of economic growth and income. The Twin Cities are the hub of business muscle in that state, home to the flagship university and the capitol of state government. This co-location is believed to generate synergy and dynamism in Minnesota’s economy.

Household income is more than $5000 higher in Minnesota than in Wisconsin, and weather is not the difference maker.

In Wisconsin, there is a major disconnect in the centers of power. Our university flagship and state government are headquartered in Madison. Business power is based in the Milwaukee 7 region.

The disconnect theory has a ring of credibility, because UW-Madison seldom lends leverage to economic development outside of Dane County, except in the agri-business cluster and in the export of its graduates to the corners of the state.

When the pundits talk about the “IQ Corridor,” they often cite an even broader arc — from Chicago to Milwaukee to Madison and to the Twin Cities: A grand concept indeed, but when it comes to public policy is generally more talk than walk.

There is some organic synergy, like Robert W. Baird & Co. having dual headquarters in Milwaukee and Chicago. Amtrak sees some two-way traffic between Chicago-Milwaukee. Wisconsin companies have offices and customers in the Chicago and Twin Cities markets, and vice versa. But the linkages along the “corridor” — beyond the interstate highways — are far from robust.

Let’s count the ways that political leaders have not walked the talk:

• Gov. Walker and Republican legislators famously rejected federal funds for high-speed rail between Madison and Milwaukee.

• When UW-Madison created its research park, it put it on the west side of Madison, not closer to Milwaukee on the east side.

• When the flagship university decided to expand its successful research park, it chose the west side again versus a site in between Madison and Milwaukee.

• The big UW foundations seldom invest their resources outside Dane County, even though some of UW-Madison’s biggest benefactors are alums who made it big in Milwaukee. The dollars largely go one way.

• An Intercampus Grants Program between UW – Madison and UW – Milwaukee passed out $1.6 million over three years and then was dropped in 2013.(There has been some initial Madison-Milwaukee collaboration on energy research.)

The latest missed opportunity, one that could still be reversed, is the proposal for a massive new building for a Department of Transportation. Where is it going? To the west side of Madison, where the unemployment rate is close to non-existent.

To walk the synergy talk, why not move the whole department, including the new 600,000 square foot building, to the 30th street Corridor in Milwaukee, where jobs are much in need.

There’s no major reason why that agency has to be in Dane County. Further, the biggest highway projects are always in the state’s business center.

The $200 million structure will also house other agencies that could and should be moved closer to the state’s business hub, such as the Department of Financial Institutions, the Wisconsin Economic Development Corporation, the Public Service Commission and the Office of the Insurance Commissioner. Those are all business-oriented agencies.

Splitting the government agencies between Madison and Milwaukee could go a long way to eliminating the disconnect that works against the state’s prosperity. And it could mesh well with Gov. Walker’s plan expressed in his state of the state address to shake up state agencies through merger of some of them.

But let’s be realistic. Such bold moves are not likely to happen. Job creation in Wisconsin has faded from center stage in the aftermath of the gubernatorial election and in the prelude to a presidential election. The lower unemployment rate, with the exception of the central city of Milwaukee, has also taken the issue off front burner.

Conclusion: The M7 Region will have to do its own heavy lifting on long-term job creation. It can concentrate on co-location within the region, as is happening at UWM’s Innovation Campus and in the fresh water technology cluster.

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  • steve925

    One of your greatest essays! I hope your cogent talking points are the beginning of corrective steps to integrate the state and diminish the parochial Dane County favoritism. Now Republicans have no where to hide even though Republican voters made the difference for Walker, et al in the last election. You made great suggestions. I hope the Walker administration can deliver on them.

  • Badger Backer

    Should the UW foundations you reference expend their funds in a manner which contradicts the instructions of the donors? If they do that, the donations evaporate and there would likely be litigation. For sure there would be litigation if the politicos attempt confiscation!

    With respect to the Research Park, the original development and the expansion were built on Land Grant lands at no further cost. For any location between Madison and Milwaukee a land purchase would have been necessary. Are you offering to buy and donate land east of Madison for the next expansion? In other words, are you willing to put your money where your mouth is?

    • JohnTorinus

      My early stage fund is investing in ventures in Madison and Milwaukee. So my money is on the table. Yours?

      • Badger Backer

        My wife and I have contributed more than $100k to the UW Foundation, with the most recent contribution designated for minority student aid. This is a lifetime (i.e. post-graduation) donation total. We expect to contribute much more during the balance of our lives.

        You didn’t respond to my other points, which I assume you concede.

        • JohnTorinus

          Thanks for your generous donation. Good to learn of it.

          I stand by my contentions, with the obvious understanding that restricted funds in the UW Foundation must be used for the purposes the donor intended. There are lots of unrestricted funds.

          • Ezio Pinza

            The percentage of unrestricted funds is minimal. Who gives money away — big chunks of it — without directing its use?

  • James Lenfestey

    John – AS as a Wisconsin boy transplanted to the Twin Cites, and one who badly wants Wisconsin to succeed as MN does, you are right: The co-location of key services in the Twin Cites area, from the research U to banks, businesses, politics and venture capital, is a recipe for growth. Talented students walk out the the U into the arms of businesses and venture capital eager to help them succeed right where they live.
    But also look into the “MInnesota Miracle” of 1971, a revolution in state finance and education funding that reduced dependence on property taxes and much increased stable state funding for education. Before that Minnesota was not much different from Wisconsin in prospects or outcomes, Investment in public education – not harassment of teachers, the Walker plan – has paid enormous dividends in Minnesota.

    PS. go Pack!

    • JohnTorinus

      Great insight about stable education funding.

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  • Cheryl Nenn

    Sounds right on to me! Thanks, John. What do you think about WisDOT’s proposed highway expansion of I-94 with a possible “double decker”? Seems like those funds could be better spent on transit, fixing local roads, etc. But wondering if the business community is supportive of what seems to be a billion dollar boondoggle? Best!

    • JohnTorinus

      I haven’t studied that issue, so, uncharacteristically, I do not have a position of that project.