Competitive Wisconsin, Inc. Notes Positive Trends in Latest Benchmarks Survey

MILWAUKEE— Increases in venture capital, exports and new private businesses are among the positive signs for Wisconsin’s economic movement,
according to the state’s annual benchmarks, released today. The report — Measuring Success: Benchmarks for a Competitive Wisconsin—is released annually by Competitive Wisconsin, Inc. (CWI), a nonpartisan consortium of state agriculture, business, education and labor leaders. Measuring Success grades Wisconsin in 33 areas of interstate competitiveness.

After declining for the three years following the dot-com bust, venture capital investments per worker rose in Wisconsin during 2004 and 2005, reaching $27.19 per worker. “Wisconsin still trails neighbors Minnesota ($84.87) and Illinois ($50.25) but we are moving in the right direction,” noted CWI President Tom O’Neill (Senior Vice President M&I Corporation-

“”The mission of Competitive Wisconsin is to help build a competitive economic climate which will make Wisconsin more attractive for the creation of good paying jobs that will increase the per capita income of Wisconsin residents,”
continued O’Neill. “The venture capital and angel investment tax credits available
under 2005 Act 255 are some of the best tools Wisconsin has to create new jobs and retain our best and brightest graduates. CWI is committed to working with Governor Jim Doyle and leaders in the state legislature to grow this very
successful program.”

The CWI report showed that Wisconsin exports also continue to grow. In
2005, its export sector grew for the fourth straight year. As a share of output from
manufacturing, mining and farms, exports were 31.2%, another high point in state
history. While Wisconsin still trails the national average of 46.6%, our increase in
export share outpaced the national average, 5.1 percentage points vs. 4.1 percentage points for the U.S.

The number of new private businesses in Wisconsin increased 2.4% in 2005 after
a one-year slowdown. Wisconsin’s increase was on par with the national average (2.5%)
and third in the region behind Minnesota (4.2%) and Illinois (3.1%). The benchmark study also highlighted some opportunities for CWI to identify potential policy initiatives that will increase Wisconsin’s competitiveness nationally and regionally.

Of special interest to the Board of Directors are opportunities for growth in the areas
of research & development spending, patents, high-tech employment, and science PhD’s
granted in Wisconsin.

– Research and development (R&D) spending:
As a share of Wisconsin’s total output, R&D spending rose in 2003, reaching 1.86%. Despite the increase, the state remained behind the national average of 2.55%. Wisconsin also trailed all of its neighbors, except Iowa (1.42%).

– Patents:
The number of patents received in a state reflects the impact that both public and
private sectors have in advancing science and technology. From 1993 to 2001, patents awarded to Wisconsinites rose steadily. However, the number has now fallen for four consecutive years. Wisconsinites were awarded 1,756 patents in 2005, down 11.1% from 1,975 in 2004. Though the number of patents awarded per person has fallen 18.0% in Wisconsin in five years, the national rate has fallen faster.

– High-Tech Employment:
Within manufacturing and service industries, high-tech companies have become critical for economic growth. In addition, jobs in these industries pay well above average. As a share of private employment, Wisconsin’s high-tech industries remained steady at 3.3% in 2004. Nationally, high-tech employment declined 0.1
points, though it accounted for a much higher percentage of employment (5.1%). Among neighboring states, only Iowa had a smaller high-tech sector than Wisconsin.

– Doctoral Degrees:
PhD’s in science, engineering, computer sciences, and mathematics provide the
human capital for research that generates new technology, new jobs and overall
economic growth. The number of doctoral degrees granted in the sciences declined slightly in 2005 and is down 11% over the last five years. Wisconsin’s universities awarded 63.6 per one million population, slightly above the national
average but below Illinois, Iowa, and Michigan. Wisconsin awarded more than 88 per million population in 1994.

“These benchmarks identify opportunities for the CWI Board of Directors, representing business, labor, agriculture and education, to work with Wisconsin policymakers and create a more competitive environment in which to grow and retain jobs,” stated O’Neill.

CWI originated the Measuring Success report card after a 1997 gubernatorial commission urged the state to track its economic progress and the growth of quality jobs, education and training. The series of reports has been prepared annually by the professional research staff at the Wisconsin Taxpayers Alliance (WISTAX). WISTAX is
a nonprofit, nonpartisan organization devoted to public-policy research and citizen education.

The 2006 edition of Measuring Success is available at