Exact Sciences CEO: Swiss model worth considering for economic development

Kevin Conroy, CEO of Madison’s fast-growing Exact Sciences cancer diagnostic company, said Tuesday that Wisconsin could use Switzerland as a role model to grow its biotech companies, increase innovation and fuel economic development.

Exact Sciences developed Cologuard, the first FDA-approved, noninvasive screening test for colorectal cancer. Conroy, a former patent attorney who headed Third Wave Technologies, spoke at a Wisconsin Innovation Network luncheon.

Martin Dahinden, the Swiss ambassador the United States, also addressed the gathering. He praised research coming out of UW-Madison and said his country is eager to collaborate with Wisconsin. He said Swiss companies employ 8,000 workers in Wisconsin and he noted that his country and the Badger State have long record of economic cooperation, particularly in the drug and biotech industry.

“We can look to Switzerland for inspiration,” said Conroy. “We can learn from the Swiss story and make changes to our political systems, our innovation engine and educational systems to approach what is happening in Switzerland.”

Conroy said the United States and Wisconsin need to do more to promote entrepreneurship and new companies. He said studies by the Kauffman Foundation show that startups less than a year old have, over the past 30 years, created 3 million jobs annually – even during periods of recession. By contrast, he said older companies have shed jobs, especially during down economic cycles.

Conroy and Maneesh Arora re-started the then floundering Exact Sciences to Madison in 2009 and were at the time its only employees. The firm now has 600 employees. The company recently announced plans to work with the MD Anderson Center at the University of Texas to develop a blood screening test for the early detection of lung cancer. In addition, Exact Sciences has tentative plans to relocate its offices to downtown Madison Judge Doyle Square as part of major redevelopment project. Its headquarters is now at University Research Park.

“All net new jobs are created by startups,” he said. “It is the collision between innovation and entrepreneurship. So if we want to learn from data … maybe we should look at policies that create more companies that create more jobs that creates more wealth for Wisconsin.”

Unfortunately, he said, the number of startups launched during the past three decades has been declining, a trend he lamented. Today, less than 10 percent of all U.S. companies were “born” in the past five years, he noted.

“Why is that fewer people are starting companies?” he asked. “That is a question that needs to be answered. And maybe by looking to Switzerland can provide some of those answers.”

He said Wisconsin and Switzerland have similar populations (5.7 million in Wisconsin vs. 8.2 million Swiss), with similar economies rooted in farming, chemicals and manufacturing. But Conroy, who has visited Switzerland, said that country ranks first internationally for innovation. He also noted that Switzerland consistently has budget surpluses, which plays a role in creating jobs which have average salaries of almost $90,000 annually – compared to $39,000 in Wisconsin. And he praised the Swiss apprenticeship programs that produce workers who are trained for technical jobs – something many employers say is lacking in the Badger State.

He said he found on his trip to Switzerland that politicians were focused on improving the economy and improving the lives of the country’s residents. With such a high per capita GDP, he said, a lot of political differences “go away.”

Conroy visited Basel, a city a little larger than Madison that home to the Novartis and Roche firms – the top two and three pharmaceutical companies in the world. He said many U.S. companies choose Switzerland for their homes because they have a low corporate tax rate and “incredibly well-educated people, two-thirds of whom decide to go the route of technical training and apprenticeships.”

“It makes my head want to explode when I think about the number of children who go through high school without developing a skill, a real skill that could be applied in the workforce,” he said. “We need people with specific skills. At Exact Sciences, we are hiring ‘laboratorians’ and people to work in customer care.

“Those require specific skills. In Switzerland, two-thirds of people get those skills. So I think there is a lot we can learn from (the Swiss),” he said.

Conroy said he has lobbied Dahinden to get his country to create a swissnex office in the Midwest, similar to ones established in San Francisco and Boston. According to its website, Swissnex “connects the dots between Switzerland and North America in science, education, art, and innovation.”

“Madison would be a great place for it, connecting our researchers with global ideas and capital,” he said. “That has to be part of the plan because we can’t do this all on our own.”

— By Brian E. Clark
For WisBusiness.com