'We need 10 more Madisons' to foster tech growth in the heartland, Brookings and ITIF report says

Sarah Hauer | Milwaukee Journal Sentinel

To stop the divergence of U.S. cities where technology thrives, a concerted effort needs to be made to turn promising cities like Madison and Milwaukee in the heartland into tech hubs, according to a new paper from the Brookings Institution and Information Technology and Innovation Foundation.

"We need 10 more Madisons," said Mark Muro, senior fellow in the metropolitan policy program at Brookings.

The Wisconsin capital ranked as having the highest potential on the paper's listing of 35 promising metro areas for technological growth that could become the next San Francisco or Boston.

The paper, released Monday, proposes establishing a new competition by which eight to 10 areas with potential, not geographically close to an existing tech hub, would receive financial and regulatory support for 10 years to become a "self-sustaining" new innovation center.

The promising areas identified by Brookings all have research universities and innovation-sector momentum. For example, Madison is home to the state's flagship university and entrepreneurial success — electronic health records company Epic Systems. In many ways, Madison is the epitome of the recipe for creating a center of technology innovation that Brookings and ITIF want to try across the country.

"It's a mini superstar," Muro said.

Madison was head and shoulders above the next metro identified — Minneapolis and St. Paul. Milwaukee came in the middle of the pack on the Brookings and ITIF index.

The idea is that injecting some new support into those communities could reorient the nation's economic geography to help regions left behind by innovation on the coasts, with Madison as the most eligible.

The potential growth areas were identified by looking at a metro's university STEM research and development spending, patents per capita, the share of residents with a college degree, STEM doctoral degrees and share of innovation sector jobs.

"Technology firms are known to tend to cluster near each other where they can find clusters of highly skilled workers, specialized service providers, vendors and high quality of life," Muro said. "When they do that, they can begin to overachieve in a two plus two equals five way. The whole overall region becomes more efficient and able to achieve more output."

More than 90% of the nation's innovation-sector growth from 2005 to 2017 came from five metros — Boston, San Francisco, San Jose, Seattle and San Diego, according to the report. This clustering effect makes technology different from past economic drivers like agriculture or manufacturing that were dependent on natural or physical resources like rivers and ports.

"It's all about talented people and companies," Muro said. "This is part of the glory of the American tech-based economy, but it also contributes to this problem of the digital rich getting richer."

The proposal from Brookings and ITIF suggests that the federal government put $100 billion into this initiative over 10 years. A big chunk of that money would be direct research and development funding, worth up to $700 million a year in each metro for 10 years.

It calls for "carefully targeted innovation, business-development, placemaking, and related investments" that would allow metro areas to "transform themselves internally" with this support.

Gov. Tony Evers sent a letter Monday to Wisconsin's members of Congress urging them to consider the proposal.

"Our state has demonstrated it has the infrastructure, institutions, and importantly, the relationships and commitment to transform ideas into successful outcomes, and Wisconsin could benefit immensely from the type of initiative proposed in the report," Evers said in a news release. "Moreover, this type of bold initiative could not only support the communities that receive funding, but ultimately strengthen our state and our country and support our position on an increasingly competitive world stage."

"It's a really bold initiative," said Aaron Hager, vice president of the division of entrepreneurship and innovation for the Wisconsin Economic Development Corp.

From where he sits, Hager thinks the ideas put forth by Brookings and ITIF overlap with what's already happening in Madison and Milwaukee. Wisconsin doesn't need to be told about the growing gap between the hyper-concentration of innovation in big tech hubs like Boston, San Francisco and Seattle with cities in the middle of the country.

"I'm optimistic that Washington would take it as a challenge worth accepting," Hager said.

Two senators, one Democrat and one Republican, have signed on to the proposal.

Muro and one of his co-authors, Robert Atkinson, president of the ITIF, will present the proposal at an event Wednesday in Washington, D.C. Senators Chris Coons (D-Delaware) and Jerry Moran (R-Kansas), who co-chair the Senate Competitiveness Caucus, will co-host.

Sarah Hauer can be reached at shauer@journalsentinel.com or on Instagram @HauerSarah and Twitter @SarahHauer. Subscribe to her weekly newsletter Be MKE at jsonline.com/bemke.