For Economic Growth, Milwaukee Region Chooses Collaboration Over Competition

When Omnicare announced in late 2011 that they planned to move their headquarters from Covington across the river to downtown Cincinnati, it showcased the intense regional competition for jobs and economic development.

Due to the region’s particularly fragmented setup of multiple states, counties, cities and townships, a myriad of governments and development entities tout their respective advantages in workforce training, tax incentives, and infrastructure access, to lure development from out of the area, but also from neighboring localities; and companies have been more than happy to float from one place to the next in order to take advantage of those incentives.

Yet, data shows that while this desire to expand the local tax base is enticing, it amounts to little or no new jobs or income for the region as a whole. Rather, the habit is more cannibalistic in nature, especially given that cities today are competing not just with their neighbors, but also with far-flung metropolitan areas around the world.

While both unique and similar Cincinnati in many ways, Milwaukee and its surrounding areas have taken a wholly different approach to that of Greater Cincinnati.

When current Mayor Tom Barrett (D) was elected in 2004, he was intently focused on improving economic development within Milwaukee proper. To achieve this, local leaders came together to form the Milwaukee 7 – an economic development organization for the seven counties in the region. To help curb damaging intra-regional competition, the group agreed to a code-of-ethics where they promised to not steal jobs from one another, but rather focus on economic development cooperation.

M7’s metropolitan business plan is now the foundation for regional development, but the group also recognizes that a thriving region is dependent on an also-successful inner-city. For this, the City of Milwaukee develops its own economic development plan that uses ideas from, and coordinates common areas with, the regional plan. This helps connects local revitalization efforts with regional economic development strategies.

Again, rather than attempting to lure firms from outside the area, local officials recognized their competitive advantage in numerous areas and chose to reinforce those. Specifically, M7 identified the area’s competitive advantages in three areas: water technology; energy, power and controls manufacturing; and food and beverage.

To ensure that the region remains attractive and stays on the cutting edge of business and technology, local officials have created numerous entities to promote and develop industry throughout the region. Each of the three industry clusters have a respective local organization that has developed clear-cut plans to encourage innovation and collaboration to grow the industry.

Going a step further, the Milwaukee region has also created a global trade and investment strategy in order to attract foreign firms and capital.

The results of this intra-regional collaboration have been positive. In November 2015, UrbanCincy published a story about Milwaukee’s burgeoning water industry that is transforming a once-decrepit manufacturing area into a modern industrial center.

Like many other cities in the industrial Midwest, Milwaukee has hundreds of vacant industrial buildings and acres of abandoned land. Millions of dollars have been spent in redevelopment efforts, with areas like the Menomonee Valley seeing food and beverage industry expansion there, and a former Pabst Blue Ribbon brewery being converted into residential spaces to bring workers closer to the new jobs downtown.

In a region with one of the highest percentages of concentrated poverty in the nation, officials are hoping the efforts will ensure that redevelopment and economic opportunities are broad-based and accessible.

A regional talent partnership is being used to help grow talent that caters to the three industry clusters; and construction projects with public support are required to hire locally. Those firms help train and hire under-employed and unemployed Milwaukeeans through collaboration with organizations like the Wisconsin Regional Planning Partnership.

In the low-income, northwest section of Milwaukee, an 80-acre brownfield site called “Century City” is being redeveloped into a Center for Advanced Manufacturing. And with development booming in downtown Milwaukee, funds generated from those investments are being redirected into numerous projects in other parts of the city, like transportation and community development organization funding.

While it is too early to judge some of the results seen thus far, the Milwaukee region is now more productive than it was at the turn of the century, and it is adding both jobs and residents. At the same time, more citizens are employed, and wages in the area are higher than the national average.

The Cincinnati region has, in recent years, begun making concentrated efforts at developing similar programs. However, many of the programs have been focused at the city-level. Until the region establishes a similar regional partnership that gets everyone working toward the same goals, it is unlikely that similar results will be seen here.

  • Matt Jacob

    How is this different than what REDI Cincinnati is already doing here?

    • REDI is doing some of this, but it’s more focused on the industry cluster approach. Unlike Denver and Milwaukee, the Cincinnati region continues to waste huge amounts of resources on poaching businesses from itself.

    • Matt Jacob

      Are you sure? My understanding was that they’ve been collaborating more to avoid these type of practices at least at the local and county level (still might be issues at the state level). I’d like to hear REDI’s response.

    • Matt, I think you’re on to something with REDI Cincinnati. Between them and the Port, even if we can’t have a formal non-compete (poaching businesses from nearby areas is just part of real estate), we can prevent our politicians from offering incentives to businesses that simply hop over state lines. My impression is things have already improved since the Chiquita/Omnicare/Nielsen days.

    • Poaching businesses may be commonplace, but the fact that taxpayers are subsidizing it to the tune of millions of dollars is a major problem.

      Omnicare and Nielsen were not that long ago. And there have been numerous other examples since then. So I wouldn’t start saying that things have improved quite yet just because another big-time company hasn’t moved lately. Another opportunity for that will come up, and I’m sure there will be a bidding war once again. One that will drain taxpayer resources.

    • Matt Jacob

      Again, I’d like to hear from REDI about how they are changing this culture and about the regional strategy that they are using. I’m not saying that what they are doing is perfect and can’t be improved on, but the lack of awareness of what they are doing to is leaving a lot to be assumed here.

      Sounds like a good follow-up article, Randy…

  • Jesse

    Does anyone know if other cities that sit on a state border have had any success?

    Companies in places like Denver may be be reluctant to move because of the disruption it would cause their workforce and supply chain. They are far away form other big cities and not near a state border. Denver’s relative isolation buys both local governments and the state of Colorado a little breathing room to implement a regional economic development plan.

    In Cincinnati a company only has to move a couple of miles to get whatever goodies Frankfort is offering. (Of course the reverse is also true for NKY based companies. Not saying Kentucky is the bad guy here.) The companies have much more leverage.

    Maybe something similar even happens in Milwaukee due to their proximity to Illinois? Is the Milwaukee 7 economic development group supposed to be cooperating with Chicago or was it set up specifically to compete against Chicago?

    I’m wondering whether it is feasible for similar groups here to include Northern Kentucky as a true partner or if the battle between Columbus and Frankfort dooms any efforts to align on job growth.

    Setting Kentucky aside for the moment, it would be cool if we could at least get Cincinnati, Norwood and Blue Ash to exhibit some measure of foresight and stop letting companies play them against each other for incentives.