Creation of a Four-County Technology Development Zone

The citizens of Northwest Wisconsin request that the legislature and appropriate state agencies:

• Create a Technology Development Zone encompassing the northwestern counties of Ashland, Bayfield, Douglas, and Iron.
• Initiate and finance incentives to encourage installation, by private providers and/or cooperatives, of broadband telecommunications infrastructure in rural areas of this new development zone.
• Provide additional incentives for technology businesses to be created or expanded in the new development zones. Those incentives could include property, sales and income tax holidays and refundable location and investment tax credits.

A useful model for this proposed improvement of broadband telecommunications infrastructure is the creation of rural electric cooperatives through the Rural Electrification Act beginning in the mid-twentieth century. The infrastructure would support high-speed internet connections and allow knowledge-based and technology-based businesses to operate from rural and small-town locations.

There is a demand for locations which can meet the technological needs of business in the new economy. This issue has been analyzed in Bridge to the New Economy, a document prepared a Bayfield County economic development organization known as the Chequamegon Group.

New technology allows the development of knowledge-based businesses in any rural location which has the necessary broadband telecommunications infrastructure. These new technology-based businesses have no detrimental environment impacts, since they do not require the traditional heavy infrastructure typically concentrated in urban areas. The northernmost counties of Wisconsin in the Lake Superior basin have an extremely high quality of life that includes exceptional outdoor recreational opportunities, a low cost of living, vibrant local cultural arts, and clean air and water. These elements would enable the area to attract and keep knowledge-based entrepreneurs and workers.

Northwestern Wisconsin, as well as other predominantly rural regions of the state, have not shared in the tremendous economic growth enjoyed by other portions of the state during the past decade. Location, critical mass of infrastructure, proximity to markets, educational centers, and the availability of capital are primary reasons for this success in other parts of the state. Lack of many of these features is a primary factor limiting growth in northwestern Wisconsin.

The northwestern counties of Wisconsin have persistently had among the highest unemployment rates in the state and region, the lowest per capita incomes, and underemployment of over 30% of the workforce. Employment in manufacturing as a percentage of the local economy is much less than in metropolitan areas in both Wisconsin and Minnesota. The northwestern counties also lag behind other regions of the state in the formation of new small business and expansion of local manufacturing.

For example, the communities located along the Interstate Highway 94 corridor from Hudson to Eau Claire struggle to keep pace with the demands of economic growth resulting from commerce flowing between Chicago and the Twin Cities. Meanwhile, northwestern Wisconsin communities struggle to finance basic community infrastructure due to inadequate tax base and the low level of economic activity.

To add to the regional economic disparity, areas of the state experiencing high levels of economic growth generate the most demand for state assistance and receive substantially higher levels of economic development financial support from the state. Much of this assistance facilitates future projects as utility infrastructure is installed, and incentive loans are repaid into local loan funds, thereby stimulating further economic growth and improvement of local tax bases. Conversely, rural or isolated communities in the four northwestern counties lose out on this financial capacity building due to fewer opportunities for projects to occur.

The challenge is to turn around long-standing economic trends in northwestern Wisconsin and create a vibrant, growing economy that creates high-skill/high-wage jobs, new businesses and a growing tax base. This can be accomplished with a state initiative to ensure that the new high technology railroad does not miss northwestern Wisconsin.