R&D spending, startup funding surge in Wisconsin

I made a mistake in a recent column on our university system, and I’m glad I was wrong. In one bullet point, I reported that research and development dollars had fallen off at our state’s research powerhouse, the University of Wisconsin – Madison.

Happily, just the opposite has occurred. A university spokesperson e-mailed me to say, “Research dollars have increased year over year in each of the last three fiscal years, and only twice in the last ten fiscal years (FY13 and FY17) have we brought in less research funding than we did the prior fiscal year.”

Our flagship university has bounced around the $1 billion mark in R&D for a long time. It did $1.1 billion in 2017 and increased that total to $1.48 billion.

That increase is great news for Wisconsin because new products and new businesses grow out of technological breakthroughs. That means jobs and prosperity.

Universities in the M7 region also do research. Another research powerhouse is the Medical College of Wisconsin. It did $250 million in research in 2018.

The University of Wisconsin – Milwaukee has steadily increased its profile by moving its R&D expenditure to $60 million in 2020. That pales in comparison to Madison, but it’s a nice increase from a standing start. That level qualifies UWM as an R1 research institution, among only 130 in the country with that designation.

Most research dollars on the state’s campuses come from federal dollars. Only $43 million came from business-sponsored research last year at Madison. By comparison, Ohio State has done $100 million.

Not all metrics are positive. Madison has slipped in the research rankings across the country, dropping from third highest to eighth. Licensing income has fallen from a robust $94 million at Madison to $16 million in the latest year recorded.

Regardless of the ranking, the extra half billion of research dollars at Madison is a huge achievement. We are hardly fly-over country when it comes to research.

Venture capitalists have taken note. Funding of startups in Wisconsin has jumped in recent years. The Wisconsin Technology Council tracks venture capital, and the growth rate has been remarkable. In 2015, venture investors put $210 million into startup companies. In 2019, that total more than doubled to more than $450 million.

The surge was led by SHINE Medical Technologies, which raised $132 million, and Northshore Medical Isotopes at $75 million. Both are in the business of delivering isotopes that are tracer elements in medical imaging.

Katharine Lyall, former University of Wisconsin System President

There are a lot of numbers in this column, but they are important numbers and they are largely headed in the right direction. The macro strategy of reinventing the Wisconsin economy through innovation and entrepreneurship was highlighted during four Wisconsin economic summits from 2000 – 2003 under the leadership of then UW president Katharine Lyall.

We are not Silicon Valley, but that strategy is coming to pass. It’s an amazing transformation that has taken hold and is accelerating.

We are no longer just DairyLand or the nation’s machine shop.

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