Good morning, Chairman Gundrum and members of the Committee. I want to thank you for inviting me to speak with you today about WEDC’s work and the outlook for Wisconsin’s economy.
At the Chairman’s request, I’m going first to walk you through some of WEDC’s history and an overview of our major programs before turning to what I’m hearing in my daily conversations with business leaders throughout Wisconsin and the prospects for our state’s future.
When WEDC was created in 2011, it replaced the former Department of Commerce which, in turn, had replaced the previous Department of Development. The thinking at the time was that by making WEDC a public-private agency it could bring together the public and private sectors, and by giving WEDC a single state block grant, it would have the flexibility and nimbleness to quickly respond to businesses’ needs. At the same time, by keeping WEDC part of state government, the agency would remain accountable to the people of Wisconsin.
WEDC has worked hard to make that vision real, and I believe we are succeeding. Over the past few years, WEDC has fulfilled its traditional roles while taking on new responsibilities. We’ve made smart investments in our businesses and communities that are paying off now and positioning us for future success.
WEDC has three major divisions: Business and Community Development, Global Trade and Investment, and Entrepreneurship and Innovation. Each of these divisions uses similar tools, namely grants — which provide direct financial support to businesses and organizations – and tax credits, which in most cases are performance-based.
Our Division of Business and Community Development, or BCD, helps businesses move to and expand in Wisconsin. Some of the businesses we’ve attracted include Casting Cleaning Resources, which moved from Illinois to Germantown to be closer to the Wisconsin foundries that rely on their services, and Formlabs, the nation’s leading 3D printing company, who chose Milwaukee’s Third Ward as their Midwest headquarters because of their ability to tap into the expertise of the University of Wisconsin-Milwaukee and the Milwaukee School of Engineering.
BCD has also helped iconic businesses like Kwik Trip, Milwaukee Tool, Generac, and Exact Sciences expand, as well as some of our less well-known, regional powerhouses like Salm Partners, based in Denmark, Wisconsin — the nation’s largest co-manufacturer of sausages and hot dogs. These projects have leveraged hundreds of millions of dollars in capital investments in our communities and created thousands of high-paying jobs.
BCD also supports community infrastructure and development with tools like our Community Development Investment grants. These grants have helped Shell Lake expand and modernize its medical center, and enabled Spooner to turn a former post office into a park that serves as a gateway to the community.
WEDC’s Global Trade and Investment Division, or GTI, helps Wisconsin businesses connect with the world, promoting trade through our global trade ventures and attracting foreign investment in Wisconsin businesses.
Since 2019, WEDC has led five in-person trade ventures to Wisconsin’s major trading partners and other markets. And, to take advantage of the shift to remote work, we’ve also been able to offer 11 virtual trade ventures – allowing Wisconsin businesses to tap into new markets without ever leaving the state. We’ve also assisted more than 100 businesses to prepare for international trade through our International Market Access Grants. Demand for Wisconsin products has never been stronger. Wisconsin’s exports to more than 200 countries in 2021 totaled almost $25 billion, an increase of 21% from 2020 and 15% from 2019.
GTI also leads business attraction efforts in Wisconsin. Just last year, Niche Cocoa, the second-largest bulk cocoa producer in the world, picked Franklin, Wisconsin as its North American production facility – a decision driven by Wisconsin’s central location, great infrastructure and workforce and extraordinarily strong food and beverage sector. And Canada-based Agropur, North America’s largest dairy production cooperative, is investing $168 million to build a state-of-the-art cheesemaking facility in Little Chute – an expansion that will increase demand for milk from Wisconsin’s dairies.
Finally, our Entrepreneurship and Innovation Division helps bring new inventions and ideas to market and helps businesses grow from start-up to maturity. Through WEDC’s Qualified New Business Venture tax credits, 135 new businesses have been able to raise up to $335 million in much-needed capital from Wisconsin investors. And WEDC is supporting rural entrepreneurs through projects like the Innovation Hub at UW-Platteville and the city’s Business Accelerator – because we know that great ideas come from every corner of our state.
WEDC has also taken the lead in making sure one-time federal recovery dollars are invested in ways that will pay long-term dividends for our state. You may have seen in the news that Wisconsin ranked first among states for the share of federal recovery funds allocated to businesses, and second for the share of funds dedicated to economic development.
Many of these investments can be seen right in your downtowns in the form of new businesses and nonprofits that have opened their doors since mid-2021. More than 9,000 businesses received $10,000 Main Street Bounceback Grants to move or expand into previously vacant commercial spaces, breathing new life into downtowns across our state. Visiting these businesses, you get to see how their owners are giving their all – and how, in many cases, they just needed a little boost to get started.
Another investment in our state’s future addresses workforce needs. WEDC and the Department of Workforce Development are partnering to provide $128 million to 27 regional workforce projects through the Workforce Innovation Grant program. These are locally driven solutions to local workforce challenges that will build access to affordable child care, health care, and housing, train and retrain workers to meet employers’ demands, and overcome barriers to employment.
The Chairman also asked me to talk a little about the state of Wisconsin’s economy. As I mentioned, we are seeing the results every day from the investments our state is making in education and training, infrastructure, housing, child care, health care, broadband and a clean environment. Unemployment continues to hit record lows, while the state’s labor participation rate is at record highs. That’s especially true in fields like construction, wholesale trade, professional, scientific, technical services, and transportation and utilities.
Several recent surveys of Wisconsin business leaders confirm what I hear in my discussions with them: Although there’s some uncertainty about how things will play out at the international and national level, they have a lot of optimism about their opportunities here. Manufacturers are continuing to hire and anticipate their revenue will continue to grow. They are optimistic about their businesses and their businesses’ future.
We see that optimism in every corner of the state: Entrepreneurs asking us to help their businesses take off, manufacturers looking to add a new product line or another shift, and communities hoping for a little extra shine on the places we call home.
I want to thank the committee for inviting me to speak to you today, and I want to thank you all for your support of WEDC and its mission. I am pleased to take your questions.