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					         AN
ECONOMIC OPPORTUNITY
      STUDY FOR
 CENTRAL WISCONSIN




              October 17, 2006
                                ACKNOWLEDGMENTS


We thank the following organizations for their financial support of the Central Wisconsin
Economic Opportunity Study:

       •   Wisconsin Department of Commerce
       •   Wisconsin Governor's Council on Workforce Investment /
           Wisconsin Department of Workforce Development /
           North Central Wisconsin Workforce Development Board –
           Growing Regional Opportunities for Wisconsin (GROW) grant
       •   University of Wisconsin – Stevens Point

We also wish to thank Centergy, Inc. for its guidance and leadership throughout this project.
We extend our thanks to Centergy President William Tehan, and to the following people who
joined the Centergy Board of Directors to serve on the project steering committee:

       •   Sally Cutler – North Central Wisconsin Workforce Development Board
       •   Bette Lang – Stevens Point Area Public School District
       •   Dennis Lawrence – North Central Wisconsin Regional Planning Commission
       •   Peter Manley – UW Extension

The Centergy Board of Directors helped to guide this study, found the funding for the study, and
in general provided support and encouragement for this effort. The following people are
members of the Centergy Board:

CENTERGY BOARD OF DIRECTORS

Bo DeDeker            Portage County
Greg Diemer           UW-Stevens Point
Terry Frankland       V & H Trucks
Ed Hammer             Marathon County
Steve Hieger          ERCO Worldwide / Port Edwards Plant
Kate Kaz              Mid-State Technical College
Bruce Kepner          Alliant Energy
Jerry King            Skyward
Tim Laatsch           Stora Enso
Jeff Landin           Portage County Business Council
Connie Loden          Heart of Wisconsin Business & Economic Alliance
Genia Lovett          Wausau Daily Herald
Roger Luce            Wausau Chamber of Commerce
Dan Mahoney           Village of Plover
Karen Olson           Marshfield Area Chamber of Commerce & Industry
Ted Penn              Wisconsin Public Service
Dennis Peterson       Delta Dental
Gary Popelka          Wood County


                                                                                                2
CENTERGY BOARD OF DIRECTORS (continued)

Jim Reigel            Paget Equipment
Marty Reinhart        Associated Bank
Mike Salsieder        Kolbe & Kolbe
Fred Siemers          River Cities Bank
Victoria Strobel      Marshfield Clinic
Bill Tehan            Ruder Ware, L.L.S.C.
Brad Zweck            Liberty Mutual

CENTERGY OFFICERS

President             Bill Tehan             Ruder Ware, L.L.S.C.
Vice President        Jeff Landin            Portage County Business Council
Secretary             Dan Mahoney            Village of Plover
Treasurer             Connie Loden           Heart of Wisconsin Business & Economic Alliance

We thank the following organizations for providing valuable information for this study:

       •   American Transmission Company
       •   Canadian National Railway Company
       •   Wisconsin Public Service Corporation
       •   North Central Regional Planning Commission
       •   North Central Wisconsin Workforce Development Board

We also thank the following individuals for their assistance with arranging interviews with
interested parties to provide public input for this study:

       •   Sally Cutler – North Central Wisconsin Workforce Development Board
       •   Greg Diemer – University of Wisconsin – Stevens Point
       •   Barb Fleisner – Marshfield Area Chamber of Commerce & Industry
       •   Jeff Landin – Portage County Business Council
       •   Connie Loden – Heart of Wisconsin Business & Economic Alliance
       •   Roger Luce – Wausau Region Chamber of Commerce
       •   Ted Penn – Wisconsin Public Service Corporation
       •   Kate Kaz – Mid-State Technical College

Finally, we would like to thank the 150+ people who participated in individual and group
interviews to provide their input for this project. Thank you to everyone who assisted with and
supported the Central Wisconsin Economic Opportunity Study.




                                                                                                  3
                                             TABLE OF CONTENTS
EXECUTIVE SUMMARY........................................................................................................             7

CHAPTER I: INTRODUCTION...........................................................................................                   11
           Scope of the Study.............................................................................................           13
           Outcomes of the Study.......................................................................................              13
           Methodology......................................................................................................         14
           Public Input........................................................................................................      15
           Study Consultants and Key Personnel...............................................................                        16

CHAPTER II: DEMOGRAPHIC PROFILE.........................................................................                             17
            Population..........................................................................................................     17
            Change in Workforce - Regional Outlook.........................................................                          23
            Educational Attainment of the Population 25 and Older...................................                                 25
            Commuting.........................................................................................................       26
            Occupational Growth 2002-2012.......................................................................                     27
            Unemployment...................................................................................................          28

CHAPTER III: BUSINESS AND ECONOMIC PROFILES................................................                                          31
            Industry and Income - Regional Outlook...........................................................                        31
            Business Patterns................................................................................................        34
            Largest Employers.............................................................................................           39
            Farm Income......................................................................................................        40
            Economic Benchmarks......................................................................................                42

CHAPTER IV: SWOT / GAP ANALYSIS..............................................................................                        49
           Strengths.............................................................................................................    49
           Weaknesses........................................................................................................        54
           Opportunities......................................................................................................       55
           Threats................................................................................................................   56
           Gaps and Barriers to Economic Development...................................................                              57

CHAPTER V: ECONOMIC OPPORTUNITIES AND RECOMMENDATIONS.............                                                                   59
           Key Economic Opportunities and Recommendations.......................................                                     59
           1. Biofuels and Alternative Energy Production............................................                                 59
           2.   Paper..........................................................................................................      60
           3.   Health Care...............................................................................................           60
           4.   Logistics....................................................................................................        61
           5.   Agriculture and Food Processing..............................................................                        61
           6.   Research....................................................................................................         62
           7.   New Business Development.....................................................................                        62
           8.   Wood Products and Composites...............................................................                          63
           9.   Workforce Education and Training...........................................................                          63
          10.   Finance, Insurance, Real Estate (FIRE)....................................................                           64
          11.   Retirement Markets...................................................................................                64
          Other Economic Opportunities............................................................................                   65


                                                                                                                                     4
                                    TABLE OF CONTENTS (continued)

CHAPTER VI: ECONOMIC STRATEGIES, TACTICS, & ACTION STEPS.................. 67

                       Strategy 1...........................................................................................................   67
                       Strategy 2...........................................................................................................   68
                       Strategy 3...........................................................................................................   70
                       Strategy 4...........................................................................................................   72
                       Strategy 5...........................................................................................................   73
                       Strategy 6...........................................................................................................   75
                       Strategy 7...........................................................................................................   76
                       Strategy 8...........................................................................................................   77
                       Strategy 9...........................................................................................................   79
                       Strategy 10.........................................................................................................    80

CHAPTER VII: IMPLEMENTATION, ORGANIZATION, PLANS AND STEPS..........                                                                           83
           A Few Comments on the Overall Organization.................................................                                         83
           Study Implementation Infrastructure.................................................................                                83
           Infrastructure......................................................................................................                85
           Education...........................................................................................................                86
           Research and Technology Transfer....................................................................                                87
           Risk Capital........................................................................................................                88
           Entrepreneurship................................................................................................                    89
           Clusters...............................................................................................................             90
           Workforce..........................................................................................................                 91




                                                                                                                                               5
6
                                EXECUTIVE SUMMARY
Could Central Wisconsin become a national center for paper and paper technology research?
Could Central Wisconsin become a technology transfer model for the state and nation? Could
Central Wisconsin improve its environment and at the same time become a national leader in bio
fuels and alternative energy production? These are some of the questions that are explored in An
Economic Opportunity Study for Central Wisconsin.

The need for change and a new economic vision for the region are clear. Unless the Central
Wisconsin region and the State of Wisconsin adjust their current economic game plan, both will
fall further behind in the New Economy. Data shows that the Central Wisconsin region is falling
behind in key economic indicators, including per capita income. The region needs to reassess its
economic development plans and adjust those plans if it is to prosper in the New Economy.

The purpose of this study is to lay out a strategic economic development plan that builds on high
growth economic opportunities in Central Wisconsin, specifically a three-county region
consisting of Marathon, Portage and Wood Counties.

This study is sponsored by Centergy, and the basic research and composition of the plan was
done by NorthStar Economics, Inc. This study is designed to achieve Centergy's vision of a
vibrant, unified Central Wisconsin regional economy that retains and attracts thriving businesses
and a high-quality work force, fosters entrepreneurial activity, and inspires continuous
improvement in the region’s quality of life. The desired outcomes of this project include the
following:

    •   Cause people in Central Wisconsin to think about a regional approach to economic
        development.
    •   Provide a common database with regional demographic and economic benchmarks.
    •   Uncover and confirm the wealth of economic development opportunities in the Central
        Wisconsin region.
    •   Introduces new ideas and concepts that may be useful in future economic development in
        the region.
    •   Provide a basis for setting practical regional economic goals that can improve the
        economic condition and quality of life in the region.

The study contains chapters on the demographics and economic characteristics of the region and
a SWOT analysis that is based upon over 150 interviews.

The bottom line in this report is to describe the economic opportunities that can lead to higher
incomes and economic growth in the region and to compile an action plan to take advantage of
those opportunities.




                                                                                                   7
Economic Opportunities and Recommendations:

Central Wisconsin is positioned to take advantage of a number of economic opportunities that
could build on the existing business base and transform the region. This report includes several
recommendations that can be started and many can be accomplished in the next three to five
years. Each of the following recommendations is explored in detail in Chapter V.

   1) Biofuels and Energy Production: Support and invest in research, technology transfer
      and businesses that will make Central Wisconsin a player in the alternative fuels/biofuels
      energy market.

   2) Paper: Support and invest in value added products and processes that enhance and grow
      the existing world-class paper making assets and labor pool in the region.

   3) Health Care: Build economic activity in medical research, medical education and
      training, regional health care delivery, medical supplies and medical
      software/bioinformatics.

   4) Logistics: Build on the existing base and attract new businesses that further develop the
      strong logistics position of Central Wisconsin.

   5) Agriculture and Food Processing: Build upon an already strong base in food processing
      and production of regionally grown crops such as potatoes, cranberries, and ginseng.

   6) Research: Support existing and seek new research companies, centers and projects that
      will enhance and increase research activity and make it a major economic driver in
      Central Wisconsin.

   7) New Business Development: Encourage and support the growth in the number of new
      regional business establishments.

   8) Workforce Education and Training: Capitalize on the region's central location and the
      presence of workforce training institutions to deliver workforce education and training.
      Exploit the region's central location to establish and promote the region as a center for
      workforce training.

   9) Wood Products and Composites: Leverage existing base of natural resources,
      experience with wood and paper manufacturing, and new, emerging technologies related
      to cellulose to capitalize on possibilities for economic growth.

   10) Finance, Insurance, Real Estate (FIRE): Grow the existing FIRE sector and encourage
       spin-offs and new businesses to serve a growing market for financial services.

   11) Retirement Markets: Explore market potential in various services to serve aging
       homeowners and residents in the region.




                                                                                                   8
Economic Strategies, Tactics and Action Steps

The economic opportunities identified will simply be good ideas unless Centergy and the
economic development community in the region take action to implement them. The region
needs to focus on key strategies that can be used to leverage existing assets and attract new
investment and energy into creating economic growth and good paying jobs. We suggest the
following strategies with specific tactics and action steps that are discussed in detail in Chapter
VI, to focus time and talent in the most productive way to implementing the recommendations in
this report:

   1) Make retention and growth of existing business, agriculture and natural resource clusters
      the first order of business in economic development.

   2) Build workforce productivity as a key means to retaining and attracting growing
      businesses, and seek to align the perspectives and relationships of the education
      community, workforce development, and economic development to the needs of the
      major employers and emerging and growing businesses in the region.

   3) Continue and expand efforts to maintain and grow the physical infrastructure in the
      region, including critical areas such as the Central Wisconsin Airport, road systems and
      bridges, power generation and transmission infrastructure, class I rail lines, and
      telecommunications.

   4) Position Central Wisconsin as the hub of innovative thinking, technology transfer,
      manufacturing education and training, and new paper products and applications.

   5) Work to raise the educational attainment and skills of current and potential workers in
      Central Wisconsin.

   6) Continue to develop and expand the sources of risk capital in the region and network
      those sources to the rest of the state and the Midwest region.

   7) Increase technology transfer to regional businesses by forming a process that can readily
      access and connect the sources of new ideas and technology developed in the region, in
      the state, in the country, and in the world to existing and emerging businesses in the
      region.

   8) Further develop the Central Wisconsin regional brand (Centergy) and regional thinking
      and action by educating and promoting Centergy and Central Wisconsin to audiences
      within the region as well as audiences in other regions of the state.

   9) Further improve the business climate in Central Wisconsin to encourage the development
      of entrepreneurial activity that leads to much faster growth in the establishment of new
      businesses in the region.




                                                                                                  9
   10) Establish an organized regional approach to seeking state, federal and private economic
       development and grant funding for initiatives that come from this study and for ongoing
       and other projects aimed at improving the regional economy.

Implementation, Organization, Plans and Steps

Implementation of steps to accomplish economic development goals is already underway in the
form of existing groups and programs in Central Wisconsin. However, thought should be given
to an organizational structure that can organize, staff, and finance the resources needed to
accomplish the goals in the Economic Opportunity Study.

We propose a structure with Centergy acting as the controlling group, with subgroups in seven
key areas, including infrastructure, education, research and technology transfer, risk capital,
entrepreneurship, clusters, and workforce. We recommend expanding the Centergy board to
include sectors of private business, workforce development, risk capital, and technical scientific
experts; creating an organization structure that serves to support implementation and each of the
subgroups; building on existing and new cluster groups; and getting staff assistance drawing on
the university, the plan commission and volunteers. In Chapter VII, with respect to each of the
seven subgroups, we identify goals, projects, action steps, and organizations and industry groups
who can provide leadership.




                                                                                                10
                           CHAPTER I: INTRODUCTION
The dynamics of the global economy have caused rapid change in the economic structure of the
United States, the State of Wisconsin, and the Central Wisconsin region. The “New Economy”,
an economy built on brain power, risk capital, and knowledge, presents economic challenges to
Central Wisconsin and the entire state. Unless the region and the state adjust their current
economic game plan, both will fall further behind in growth and income.

The economy of the State of Wisconsin has lagged behind the U.S. economy in terms of growth
in gross state product (GSP) and per capita income. The state’s per capita income is about 97%
of the U.S. average and per capita income in Wisconsin is growing at a slower rate than the U.S.
and surrounding states such as Minnesota. Central Wisconsin has lost ground to the U.S. and
Wisconsin in terms of per capita income over the last generation. The data shows that the
Central Wisconsin region is falling behind in key drivers in the New Economy. For example, the
per capita income of Central Wisconsin in 1979 trailed the state by $842. That difference
increased to $1,400 in 2003, a 66% increase in the gap. (See Figure I-1)

Figure I-1 - Per Capita Personal Income in the U.S., Wisconsin, and Central Wisconsin
                    Per Capita Personal Income in the US, Wisconsin, and Central Wisconsin
         $32,000

                            United States
         $28,000            Wisconsin
                            Central WI

         $24,000


         $20,000


         $16,000


         $12,000


          $8,000
                79

                81

                83

                85

                87

                89

                91

                93

                95

                97

                99

                01

                03
              19

              19

              19

              19

              19

              19

              19

              19

              19

              19

              19

              20

              20




In Central Wisconsin and much of the state, good-paying jobs with good benefits have been lost
to productivity gains, global competition, corporate downsizing, and outsourcing. Few
comparable replacement jobs have been created and jobs for qualified dislocated training
programs are not in the region. In the face of this extended period of economic challenge,
Central Wisconsin needs to reassess its economic development plans and adjust those plans if it
is to prosper in the New Economy.




                                                                                             11
A key relationship that has emerged in the New Economy is the link between brain power, as
represented by education level, and earning power. There is a direct relationship between the
level of education and income level. Figure I-2 shows what has happened to the earning power of
high school and college graduates over a twenty five year period. The data shown is in constant
dollars (no need to factor in inflation) and the gap between the annual earnings of a high school
grad and a college grad has increased from $12,683 in 1978 to $23,291 in 2003. Over a lifetime
of earnings, that gap today amounts to about $1,000,000. In short, markets in the New Economy
reward education and skills. For Central Wisconsin and Wisconsin in general to be competitive
in the new, global economy, educational attainment level is a key.

Figure I-2 - The link between education level and earnings

                                                                         Difference
                                       Income
Education                                                       (High School vs. Other Degree)
                              1978               2003               1978              2003
High School                  $22,856            $27,915              n/a                  n/a
Bachelors                    $35,539            $51,206            $12,683              $23,291
Masters                      $46,885            $74,602            $24,029              $46,687
Source: U.S. Census Bureau

Central Wisconsin has a viable base of business and industry, as well as untapped assets and
competitive advantages such as a talented workforce and high quality of life. However, these
factors must be combined with New Economy assets and melded into a cohesive strategic
economic development plan that will produce greater growth in quality jobs and income levels.
The alternative is a slow erosion in the economic viability of the region and threats to its quality
of life.

The purpose of this study is to lay out a plan that builds on high growth economic opportunities
in Central Wisconsin. This study is designed to develop a strategic economic development plan
for a three-county region in Central Wisconsin that includes Marathon, Portage and Wood
Counties.

This study is sponsored by Centergy, Inc., and the basic research and composition of the plan
was done by NorthStar Economics, Inc. of Madison, Wisconsin. Centergy was formed in 1988
to stimulate economic development in Central Wisconsin. In 2004, Centergy adopted mission
and vision statements that called for aligning resources, encouraging cooperation among all
sectors of the regional economy, and promoting the value of doing business in Central
Wisconsin.

This study is designed to achieve Centergy's vision of a vibrant, unified Central Wisconsin
regional economy that retains and attracts thriving businesses and a high-quality work force,
fosters entrepreneurial activity, and inspires continuous improvement in the region’s quality of
life. Centergy's economic development initiatives include sponsorship of the regional Economic
Development Forums in October, 2003, 2004, 2005, and 2006, and organization of Central
Wisconsin Days in Madison in April, 2005 and 2006.




                                                                                                  12
NorthStar Economics, Inc., based in Madison, Wisconsin, is an economic consulting and
research firm dedicated to the development and implementation of New Economy regional
economic development strategies. NorthStar was the consultant on the Northeastern Wisconsin
Economic Opportunity Study, a regional development plan for an eighteen county region in
northeastern Wisconsin. The NEW study was honored with a regional stewardship award by the
Alliance for Regional Stewardship and the regional plan has already achieved a number of
important results including securing implementation funding in excess of $375,000 from the
state.

Scope of the Study

The goal of this project is to develop an economic development strategy for a three county region in
Central Wisconsin that includes Marathon, Portage, and Wood counties.

The economic development strategy includes the following:
    •   Demographic and economic benchmarks for each county and major municipality
    •   An analysis of regional strengths, weaknesses, opportunities and threats (SWOT)
    •   An evaluation of the economic relationships among the selected counties
    •   A comprehensive analysis of the challenges and opportunities facing the region
    •   Recommendations as to the key economic opportunities within the region
    •   Strategies to use in moving forward on economic development opportunities
    •   Implementation ideas and steps that carry out the recommendations and strategies in the plan

Outcomes of the Study

In undertaking this study, Centergy outlined a number of desirable outcomes that might come
from or be started by a regional economic development plan. Those outcomes include the
following:

    •   This study and the resulting plan will cause people to think about a regional approach to
        economic development in Central Wisconsin. The scale of economic opportunities,
        problems and challenges in any region is often too large for a single community or
        county to manage. Increasingly, collective effort is the answer to improving economic
        conditions.
    •   This study and plan provide a common regional data base with demographic and
        economic benchmarks. This data base can be used by many organizations in planning
        and fund raising efforts.
    •   This study uncovers and in some cases confirms the wealth of economic development
        opportunities in the Central Wisconsin region.
    •   This study introduces new ideas and concepts that may be useful in future economic
        development in the region.
    •   This study provides a basis for setting practical regional economic goals that can
        improve the economic condition and quality of life in the region.

The ultimate goal of the study, of course, is a long-term plan for economic development for
Central Wisconsin. Identifying the current state of the economy through interviews,


                                                                                               13
benchmarking economic measures and demographics, and doing a SWOT analysis create a
foundation for economic analysis and recommendations regarding a course of action. This
information provides the foundation for the primary objective of the study - identifying the most
viable opportunities for economic development, formulating economic development strategies,
and devising an implementation plan consisting of concrete action steps that may be undertaken
to achieve the goal of improving the regional economy.

The study is scheduled for public rollout on October 17, 2006. At that event, the implementation
of the plan will begin and public support to implement the plan will be sought. It is a key goal of
the study to obtain the support of the necessary public and private sector partners and secure their
commitment to actively participate in executing the action steps identified herein.

Methodology

In April of 2006, we held the first in a series of meetings with the Central Wisconsin Economic
Opportunity Study steering committee. At that time, as noted above, a number of goals were
identified. A plan of work with specific tasks and timeframes was developed. Copies of previous
economic studies and demographic data were requested, and NorthStar personnel began a
comprehensive review of the available literature and available data sources.

Over the course of the next few months, interviews were conducted with groups and individuals
in Marathon, Portage, and Wood Counties to obtain their input and to establish a snapshot of the
regional economy and assess the concerns present in the community. Over 150 people were
interviewed including a number of people from outside the region who were familiar with
Central Wisconsin.

Simultaneously, we began gathering economic and demographic data and statistics to provide
regional economic benchmarks. Sources of data included the U.S. Bureau of Economic Analysis
(BEA), the Census Bureau's County and Zip Code Business Patterns, and the Wisconsin
Department of Administration. Whenever possible, data for the specific municipalities of
Marathon, Portage and Wood Counties were gathered, as well as comparative date for the
entirety of the three counties, the State of Wisconsin, and the U.S. We gathered data on a variety
of topics, including per capita income, property taxes, population, business establishments,
employment, and educational attainment.

In analyzing the collected data, compiling interview results, and brainstorming with the steering
committee, a basis for formulating strategies began to emerge. Drawing on the information
gathered, as well as our own expertise, we identified those economic opportunities that we
deemed most ripe for economic development, and formulated strategies accordingly. After
reviewing these opportunities with the steering committee, we began formulating a plan of
strategies and concrete action steps designed to implement these strategies.

The work plan for the study called for completion of the study by early October of 2006. Work
was divided into the following three phases:




                                                                                                 14
Phase I

NorthStar met with the steering committee to establish a work schedule for the gathering of economic
data, an interview scheduling, survey distribution and collection, and other study milestones. Discussion
of preliminary communication strategies was also part of Phase I.

Phase II

NorthStar collected baseline data to benchmark the region’s economic measures. These metrics
included historical trends for demographic and economic data such as population, workforce, per capita
income levels, employment by industry, number of business establishments, and other relevant trend
data. Also included was data on education levels, patents, cluster analysis, industry trade connectivity
and gap data. Data on Wisconsin and the U.S. was included in some cases for comparative purposes.

NorthStar interviewed a significant number of regional stakeholders and interested parties on economic
development issues in the region. These interviews included group and individual interviews.
NorthStar collected, banked, and analyzed the interview data.

NorthStar collected data from a number of standard U.S. and Wisconsin statistical sources. NorthStar
also collected data and worked with UW-Extension, the North Central Wisconsin Workforce
Development Board and the North Central Wisconsin Regional Planning Commission.

Phase III

NorthStar conducted an independent, unbiased analysis of the region’s strengths, weaknesses,
opportunities and threats based upon surveys, interviews, and the data and information gathered in
Phase II. NorthStar made an independent assessment of the challenges and opportunities facing the
region.

NorthStar developed a strategic economic development plan that identified responses to those challenges
and opportunities and recommended actions that will foster the future economic prosperity of the region.

NorthStar has prepared its findings in a report and delivered ten hardcopies of the report as well as an
electronic version. NorthStar also prepared a presentation of the findings for Centergy’s Fall Forum on
October 17, 2006.

Public Input

In laying out the goals for the Central Wisconsin Economic Opportunity Study, public input was
of vital importance. The insight of business and community leaders throughout the communities
comprising the region was particularly valuable. These insights bring an informed perspective to
the table with respect to the challenges facing the regional economy. In early meetings on this
project, we discussed the importance of interviewing key individuals across a wide spectrum of
sectors and occupations. These people included educators, realtors, real estate developers,
farmers, manufacturers, government officials, bankers and financial executives, entrepreneurs,
union officials, business managers, and power and transmission company managers.



                                                                                               15
The steering committee was able to identify dozens of potential interview subjects in these
sectors, and the regional Chambers of Commerce were instrumental in making the arrangements
necessary to conduct the interviews.

Over 150 people were interviewed in groups and individual interviews. Most of the interviews were
done in May, June and July of 2006. Much of the information gathered is summarized as part of the
SWOT analysis in Chapter IV of this report. The interview form used in the study and a summary of the
interview responses can be found in Volume II of this report.

Study Consultants and Key Personnel

Dr. David J. Ward, president and founder of NorthStar Economics is the principal investigator on
the project and the primary author of this report. Dr. Ward conducted many of the project
interviews, conducted economic research and, in cooperation with the steering committee,
developed the recommendations, strategies and action steps contained in the report.

Mr. Dennis K. Winters, Vice President and Director of Research at NorthStar Economics also
contributed to the study.

Alan J. Hart, NorthStar's Director of Operations, provided key backup support on the project,
including development of graphics, conducting demographic research, and editing and writing
sections of the report.

Theresa L. Field, a Research Associate at NorthStar Economics, was instrumental in gathering
economic and demographic data, generating graphs and tables, and writing sections of the report.

The steering committee on the project provided invaluable guidance and input on the project.
The committee consisted of the Centergy board along with additional non-board members. A
small executive steering group that included Bill Tehan, Barb Fleisner, Kate Kaz, Jeff Landin,
Connie Loden, and Roger Luce provided day-to-day contact for the study.




                                                                                                 16
                        CHAPTER II: DEMOGRAPHIC PROFILE
Population

Regional, State, and National Population Projections

The counties examined for this study are Marathon, Portage and Wood, all located in Central
Wisconsin. This is the area that will be referred to as the “Central Wisconsin region” or “the
region” in this report.

In order to compare population projections with the U.S., the county figures were expanded to
include the year 2030.1 Regional population growth is well below the U.S. average and slightly
below the state rate through the year 2030, at only 15.4%. U.S. projections estimate a 30%
increase in population for the 2000-2030 time period.

Regional and Wisconsin population figures were examined until the year 2030 and were grouped
differently than the county population data below in order to match the U.S. projections provided
by the U.S. Census Bureau.

The cohort of 0-4 year olds in Wisconsin is low relative to the U.S. population. The comparable
percentage of 0-4 year olds in the Central Wisconsin region is lower than both the U.S. and
Wisconsin percentage. The 0-4 cohort is projected to drop faster in Wisconsin and the Central
Wisconsin region as compared to the national average through the year 2030.

Wisconsin and the region were above average in 2000 with regard to their 65+ population. This
age cohort was 13.1% of the population for both Wisconsin and the region. Generally, the
percentage of the population in most age cohorts for Wisconsin and the Central Wisconsin region
are very similar in 2000 and the growth rate is nearly the same through 2030, except with regard
to the eldest population group. The Central Wisconsin region has an above average growth rate
(9.6%) for the 65+ age group compared with Wisconsin (7.7%) and the nation (7.3%) over the
2000-2030 time period. The Central Wisconsin region is also projected to have a smaller 20-44
year old group than the state and national average in 2030.

Figure II-1 below shows the population percentage by age cohort for the U.S., the State of
Wisconsin, and the Central Wisconsin region.




1
 U.S. projections are provided for the years 2010, 2020 and 2030 only, not in five year increments as the state and
county data are presented.


                                                                                                                  17
Figure II-1 - Age Cohorts as a Percentage of the Population from 2000 to 2030


            40.0%
            35.0%
            30.0%
            25.0%
            20.0%
            15.0%
            10.0%
             5.0%
             0.0%
                       2000          2030             2000            2030       2000        2030

                            United States                  Wisconsin                  Regional

                                            0-4     5-19      20-44    45-64    65+

                               Source: Wisconsin Department of Administration

Historic Population Growth

Central Wisconsin’s overall population growth rate for the period 1985-2005 was 11.5%. That
rate of growth was lower than the growth rate for the State of Wisconsin (16.8%) and the
national population growth rate (24.6%). Population growth rates for the period 1985-2005 are
shown in Figure II-2 below.

Figure II-2 - County and Regional Population Growth Rates – 1985-2005


                            Population Growth Rate - Every 5 Years
            10.0%
             8.0%
             6.0%
             4.0%
             2.0%
             0.0%
             -2.0%      1985                1990              1995             2000         2005

             -4.0%

                 Regional        Brow n           Outagamie       Marathon        Portage        Wood

                              Source: Wisconsin Department of Administration




                                                                                                        18
Wisconsin’s population growth was 3.7% over the time period 2000-2005. Marathon County
grew at nearly the same rate. Growth in Portage County was above the state average at 4.5%.
Wood County’s growth was 1.1% from 2000-2005 which was lower than the state growth rate.
Marathon County is the largest of the three Central Wisconsin counties, with an estimated
population of 130,242 residents in 2005. Estimated populations for Portage and Wood Counties
were 70,175 and 76,420 respectively in the year 2005.

Over the period 1985-2005, the population growth rate for Marathon County was the highest of
the three counties in this region at 17.4%. Portage County was slightly lower with a 13.0%
growth rate, while Wood County saw almost no population change at all, with a 1.6% growth
rate for the period 1985-2005. These population growth rates produce a regional average growth
rate of 11.5%.

Comparatively, Brown County and Outagamie County - located to the east of the Central
Wisconsin counties - had a growth rate of 37.2% and 27.3% respectively over the same twenty-
year time period. Figure II-3 below contains data for the State of Wisconsin, the three counties
in the Central Wisconsin region, and two comparable counties.

Figure II-3 - Population Data and Projections for the Period 2000-2025

                       Census        Estimate Projection Projection    Projection   Projection
   County
                        2000           2005      2010      2015          2020         2025
   Wisconsin          5,363,715      5,563,896 5,751,470 5,931,386     6,110,878    6,274,867
   Marathon Co.         125,834        130,242   134,504   138,836       143,308      147,112
   Portage Co.           67,182         70,175    72,259    73,911        76,170       78,952
   Wood Co.              75,555         76,420    77,455    78,393        79,072       79,026
   Brown Co.            226,658        237,515   248,529   259,192       269,812      281,348
   Outagamie Co.        161,091        170,939   180,260   189,556       198,948      207,577
   Source: Wisconsin Department of Administration

Population projections for the time period 2000-2025 indicate that Marathon and Portage
Counties are expected to grow at rates comparable to the state average. The population for
Wisconsin is expected to grow by 17%. Marathon and Portage Counties are projected to grow at
a consistent rate throughout the period 2000-2025. In Wood County, with an expected growth
rate of 4%, the population is expected to peak in 2020 and slowly decline thereafter.

Detailed population data are shown below in Figure II-4.




                                                                                                 19
Figure II-4 - Population Projections for Central Wisconsin by Age - 2000-2025

                                 Central Wisconsin Region
   Age Group          2000          2005          2010      2015      2020        2025

 0-4                   16,696       16,445         17,104    17,813    18,366      18,372
 5-9                   18,931       17,654         17,179    17,808    18,481      18,990
 10-14                 20,682       19,782         18,253    17,763    18,446      19,110
 15-19                 21,759       22,119         21,177    19,389    18,910      19,733
 20-24                 18,247       21,233         21,682    20,658    18,907      18,420
 25-29                 15,712       16,332         19,121    19,488    18,636      17,072
 30-34                 17,983       15,815         16,423    19,198    19,563      18,690
 35-39                 21,697       18,454         16,244    16,863    19,692      20,016
 40-44                 21,812       21,981         18,704    16,476    17,137      19,939
 45-49                 20,174       21,893         22,055    18,779    16,582      17,223
 50-54                 16,657       19,866         21,533    21,700    18,525      16,331
 55-59                 12,623       16,236         19,347    20,983    21,203      18,085
 60-64                 10,327       12,097         15,566    18,573    20,214      20,414
 65-69                  8,869        9,676         11,351    14,644    17,552      19,109
 70-74                  8,519        8,050          8,825    10,393    13,480      16,174
 75-79                  7,443        7,442          7,071     7,792     9,239      12,011
 80-84                  5,503        5,893          5,931     5,680     6,317       7,525
 85-89                  3,274        3,620          3,949     4,037     3,929       4,412
 90-94                  1,294        1,724          1,971     2,210     2,316       2,301
 95-99                    320          458            644       765       892         962
 100 & Over                49           67             88       128       163         201
 Totals               268,571      276,837        284,218   291,140   298,550     305,090
 Source: Wisconsin Department of Administration

Population growth within the Central Wisconsin region will vary considerably. The map below
shows that population levels in the eastern part of the region will increase far more than those in
the western part of the region.




                                                                                                 20
Figure II-5 – Change in Population in Central Wisconsin - 1980-2020




Source: Cartographic Solutions, Inc.


                                                                      21
County, state and national population projections were grouped into age cohorts and examined
according to their percentage of the entire population from the years 2000-2025. Marathon
County’s largest age cohort in the year 2000 was those aged 0-14, who make up over 20% of the
population. By the year 2025, the age group 65+ is projected to become larger than any other
age cohort. The 0-14 group is projected to be close behind in 2025, falling slightly below the
eldest residents, but it is anticipated that the 65+ group will jump 6%, from 13% of the
population in 2000 to 19% in the year 2025.

Portage County age cohorts may be most interesting. In the year 2000, the age group of 15-24
year olds was the largest of the age cohorts, comprising 20% of Portage County’s population.
The youngest age group, consisting of 0-14 year olds, also comprised nearly 20% of the
population in the year 2000. These two groups are projected to consistently remain the largest
age cohorts until the year 2020. This is not to say that the older segment of the population will
not grow as significantly in Portage County as in the other counties. In fact, the age cohort of
65+ is projected to become the largest group by numbers in 2025. The population over 65 years
of age is projected to more than double over this time period - similar to the other counties in the
region - but the younger group, aged 15-24, is projected to remain a large portion of this
county’s population, unlike the other counties.

Figure II-6 - Population by Age Cohort as a Percentage of the Total - 2000-2025

    30.0%
    25.0%
    20.0%
    15.0%
    10.0%
     5.0%
     0.0%
            2000    2025   2000   2025    2000     2025      2000       2025         2000    2025   2000   2025
              Regional        Brown         Outagamie             Marathon             Portage         Wood

                                  0-14   15-24   25-34    35-44    45-54     55-64     65+

                             Source: Wisconsin Department of Administration

These projections indicate that the age group 65+ will be the largest group in several Central
Wisconsin counties by the year 2025. This is especially true in Wood County. Wood County in
the year 2000 was already a county with a high average age, with the age group 65+ making up
15 % of the population, behind only the 0-14 year olds and 35-44 year olds. By 2025, the elderly
group is projected to consist of 24% of the population, well above all other age cohorts.

Outagamie County, by contrast, is also projected to have an increase in its 65+ population over
the 2000-2025 time period, but it is not anticipated that the 65+ group will be the largest age
group in 2025. In fact, Outagamie County residents aged 35-44 are projected to be only slightly
below the 65+ age group, making up an estimated 15% of the population for the year 2025. The
0-14 year old group is projected to be the largest, making up 20% of the population. The same is
true for Brown County, whose largest age cohort in 2025 is projected to be the 0-14 year old



                                                                                                                  22
group. The 65+ group is projected to comprise approximately 15% of the population, which is
5% less than the largest group.

As the projections indicate, Wood County’s population is barely growing. Wood County's
residents are continuing to age, resulting in the disproportionately large projection of residents
over 65, unlike any of the other counties in the region. Marathon and Portage are projected to
experience growth, though not at the high rate of Brown County or Outagamie County. These
counties share the same aging population, but have more evenly distributed age cohorts, as
Portage County has a large population under age 24. The Central Wisconsin region age cohort
projections balance out because of Marathon County’s larger population, which compensates for
Wood County’s smaller aging population. The regional projections reveal the same general
aging pattern.

City population

The following is population data for cities located in Marathon, Portage, or Wood Counties.
Wausau is located in Marathon County. Stevens Point is located in Portage County, and
Wisconsin Rapids is located in Wood County. Marshfield is located in Wood and Marathon
Counties.

Figure II-7 - Population for Central Wisconsin Municipalities - 1980-2025

City                   1980       1990      2000    2005     2010     2015     2020       2025
Marshfield            18,053     18,861    18,383   18,436   18,527   18,596   18,604    18,444
Stevens Point         22,970     23,002    24,551   25,208   25,538   25,728   26,136    26,726
Wausau                32,426     37,060    38,426   39,191   39,813   40,461   41,154    41,831
Wisconsin Rapids      17,995     18,245    18,435   18,361   18,280   18,173   18,013    17,688
Source: Wisconsin Department of Administration

The cities in Wood County reflect the overall county growth patterns. In the period 1980-2025
Marshfield is projected to grow by only 2%, while Wisconsin Rapids is actually projected to
drop in population by 2%. Population projections for 2025 show Wausau with a population over
41,000, which would comprise nearly 30% of the Marathon County population. Growth from
1980-2025 is projected to be about 30%. In the same year, Stevens Point’s population is
projected to comprise 33% of Portage County’s population. Average population growth in this
45 year period is projected at 16% for Stevens Point.

Change in Workforce - Regional Outlook

Workforce projections are based upon population projections of those aged 25-59 for the Central
Wisconsin region.

The workforce is projected to increase for a period through 2015 before it begins to shrink,
resulting in a cumulative loss of 851 workers. The Central Wisconsin population of retirees will
double during the time period 2000-2030, while the projected workforce will be nearly the same
size in 2030 as it is was in 2000. Figure II-8 shows the projected population breakdown in terms


                                                                                                  23
of working age people, school age people, and retirement age people. Figure II-9 illustrates the
loss in workforce as cumulative total and the change in workers at five year intervals.

Figure II-8 - Workforce, Retiree and School Age Cohort Projection for the
              Central Wisconsin Region – 2000-2030


             160,000
             140,000         Workforce (25-59)
             120,000
                                                    School Age (0-24)
             100,000
              80,000
              60,000                                                         Retirees (60+)
              40,000
              20,000
                     0
                           2000        2005       2010         2015      2020         2025    2030

                                 Source: Wisconsin Department of Administration

Figure II-9 - Change in Central Wisconsin Workforce (ages 25-59)
            8,000
                                       6,769
                                                            6,829
            6,000


                                                                         4,680
                         3,919
            4,000
                                       2,850

            2,000


                                                       60                              698
                0
                         2005           2010          2015            2020          2025      2030
                                                                                                     -851

            -2,000                                                                            -1,549
                                                                    -2,149

                                Change in Workforce every 5 years
            -4,000
                                                                                   -3,982
                                Cumulative Change

            -6,000

                                 Source: Wisconsin Department of Administration


                                                                                                            24
Brown and Outagamie Counties have larger workforce totals, due to their larger population. As
the projected workforce begin to decline dramatically, the change in workforce totals for Brown
and Outagamie Counties shrink closer to the Central Wisconsin region. The workforce in
Central Wisconsin counties is projected to show a net loss beginning in 2020. As Central
Wisconsin counties continue to age, the number of workers in the labor force will decline
dramatically, largely due to the aging population in Wood County.

Figure II-10 - Change in Workforce by Central Wisconsin County - 2000-2025


                      Change in Workforce Every 5 Years - 2000 to 2025
             8,000
                                                   2005    2010    2015   2020   2025
             6,000

             4,000

             2,000

                 0
                        Region     Brown    Outagamie Marathon        Portage    Wood
             -2,000

             -4,000

             -6,000


                             Source: Wisconsin Department of Administration

Educational Attainment of the Population Age 25 and Older

The Central Wisconsin region is below the U.S. and Wisconsin averages with regard to
educational attainment. Residents with college degrees (including both bachelors and graduate
degrees) account for 19.1% of the population of the Central Wisconsin region. More than 22%
of the populations of both the U.S. and Wisconsin have earned college degrees.

Individual county comparisons reveal Wood County to have the lowest percentage of college
graduates with only 16.9%, while Portage County boasts 23.4% of residents who have obtained a
college degree. Portage County’s higher educational attainment is likely influenced by the
presence of the University of Wisconsin-Stevens Point campus. Brown and Outagamie Counties
are each only 1% below Portage County with regard to college degree attainment, while 18.3%
of Marathon County residents have college degrees.

Generally speaking, the lower the percentage of the regional population that has earned only a
high school diploma, the higher the percentage of the population there is in the same region with
a college degree. Including associate degrees, Portage County’s college attainment population
was slightly above 30%, while it had the lowest percentage (37.2%) among Central Wisconsin
counties of people whose highest level of education was a high school degree. The Central
Wisconsin region is above average with respect to associate degree attainment, as compared with


                                                                                              25
both Wisconsin and the U.S., but ranks below both the state and the nation with respect to
bachelor and graduate degree attainment. Marathon County has the highest percentage with an
associate degree (9.2%), but lower bachelor and graduate degree attainment rates than most of
the other areas examined. Brown County is the best educated among the counties studied, with
only 34.9% having attained only a high school diploma, and over 30% with college degrees,
including associate degrees.

Figure II-11 - Educational Attainment in Central Wisconsin - Age 25+ in 2000

                                       Educational Attainment for Central WI
      100.0%                                                                                             5.1%
                     8.9%          7.2%        5.9%       5.9%        5.8%        5.7%       7.2%
                                                                                                                Graduate
       90.0%                                  13.2%                              12.6%                  11.8%   Degree
                    15.5%          15.3%                  16.6%       16.7%                  16.1%
       80.0%                                                                                             8.1%
                                               8.4%                               9.2%                          Bachelor
                     6.3%          7.5%                    8.9%       8.8%                   7.0%
       70.0%                                                                                                    Degree
                                              18.6%                                                     18.8%
                                                                                 18.3%
       60.0%        21.0%          20.6%                  20.0%       19.1%                  18.9%              Associate
                                                                                                                Degree
       50.0%

       40.0%                                                                                                    Some College
                    28.6%                     38.7%                              38.0%                  41.0%
       30.0%                       34.6%                  34.9%       37.8%                  37.2%
                                                                                                                High School
       20.0%                                                                                                    Grad
                    12.1%                      8.2%                               8.0%
       10.0%                       9.6%                   7.6%        7.1%                   7.5%        9.2%   Some High
                     7.5%          5.4%        7.1%       6.1%        4.7%        8.2%       6.0%        6.1%   School
        0.0%

                    te s           sin         gio
                                                  n        n ty      unt
                                                                         y         nty      unt
                                                                                                y        nty    Less than 9th
                 Sta           con          Re         Cou         Co          Cou        Co         Cou
          ited             Wis         l WI         wn         mie          on       tage         od            Grade
       Un                         ntra          Bro      tag
                                                             a        ra th      Por         Wo
                               Ce                     Ou            Ma

       Source: U.S. Census Bureau

Commuting

Workers in Wood County leaving the county for work primarily commute to Portage and
Marathon Counties. In 2000, about 86% of the workforce remained in Wood County, while 7%
traveled to Portage County and 4% traveled to Marathon County. Workers commuting to
Portage County are employed primarily in the manufacturing and services industries. Workers
commuting to Marathon County are employed principally in the wholesale/retail trade and
manufacturing industries.

In Portage County, the workforce grew by 5,000 during the time period 1990-2000, yet only
3,000 of Portage County workers are employed in Portage County. The largest group of Portage
County commuters travels to Wood County, working mainly in the manufacturing, services, and
wholesale/retail trade industries. A portion of Portage County’s workforce commutes to
Marathon and Waupaca Counties as well.

In 2000, Marathon County employed about 87% of its workforce in the county, down
approximately 1% from 1990. Most of the remaining workers commute to Wood County for
employment. Marathon County residents who commute to Wood County work largely in the


                                                                                                                                26
service and manufacturing industries. Other Marathon County commuters travel to Portage,
Lincoln, and Clark Counties.

Occupational Growth 2002-2012

The occupational sector exhibiting the largest growth percentile for employment for the State of
Wisconsin is information technology. Health care follows, ranking second in projected
employment growth. Based on actual employment growth numbers, health care, professional
and related fields, and construction are adding 30,000 employees each (including replacement
employment).

In the North Central Wisconsin Workforce Development Area, the large growth sectors are also
health care and information technology. The North Central Wisconsin Workforce Development
Area includes Adam, Forest, Langlade, Lincoln, Marathon, Oneida, Portage, Vilas and Wood
Counties. Sales, construction, and transportation will also be adding to their employment during
the 2002-2012 time period. Figure II-12 is a summary of the expected growth in employment for
those occupations. The "# of Openings 2002-2012" column on the far right represents new jobs
as well as the estimated turnover openings. Figure II-13 details expected employment changes
by industry for the North Central Wisconsin Area.


Figure II-12 - Projected Occupational Growth for North Central Wisconsin– 2002-2012
                                          Estimated
                                         Employment                       Percent   # Openings
Occupation                                                  Change
                                                                          Change    2002 - 2012
                                        2002      2012
Health Care                            5,750      7,570       1,822        32%        2,950
Information Technology                 1,910      2,500         581        30%          830
Sales                                  3,010      3,680         671        22%        1,440
Construction & Extraction              3,390      4,140         750        22%        1,470
Transportation & Material Moving       6,120      7,450       1,325        22%        2,390
Professional & Related                 3,190      3,870         679        21%        1,390
Service                                  860      1,010         155        18%          380
Management, Business & Financial       5,210      6,110         895        17%        1,820
Production                               800        920         126        16%          350
Source: Wisconsin Department of Workforce Development, Labor Market Information




                                                                                                  27
Figure II-13 - Employment Projections by Industry for North Central Wisconsin –
               2002-2012

                                                                          2002-2012 2002-2012
    Industry                                                             Employment  Percent
                                                                           Change    Change
    Total Non-Farm Employment                                               26,590    13.4%
     Construction/Mining/Natural Resources                                   1,800    20.7%
     Manufacturing                                                              70     0.2%
        Food Manufacturing                                                     -10    -0.2%
        Paper Manufacturing                                                 -1,490   -16.4%
        Machinery Manufacturing                                                170     5.0%
     Trade                                                                   5,090    14.3%
       General Merchandise Stores                                              450     8.0%
     Transportation and Utilities                                            2,200    20.6%
     Financial Activities                                                    1,220    10.5%
     Education and Health Services                                           9,770    25.2%
        Ambulatory Health Care Services                                      4,110    36.9%
        Hospital (including State and Local Gov.)                            2,010    21.9%
     Leisure and Hospitality                                                 2,350    13.4%
     Information /Prof Services/Other Services                               3,640    16.1%
     Government (Excluding U.S. Postal, State and Local Educ. and Hosp.)       450     3.5%
    Source: Wisconsin Department of Workforce Development, Office of Economic Advisors, October 2004


Employment projections for the North Central Wisconsin Workforce Development Area for the
2002-2012 time period anticipate sizeable growth in nearly all industries, with the exception of
manufacturing. Specifically, paper manufacturing is expected to decline by 16.4%. The
education and health care industries will add nearly 10,000 employees over the time period
2002-2012. Other industries to note are construction, transportation, information and
professional services, all of which are projected to add large numbers to their workforce.

Unemployment

Figure II-14 - Central Wisconsin Regional Unemployment Rates – 2002-2005

                                                           2002     2003      2004     2005
                       United States                       5.8%     6.0%      5.5%     5.1%
                       Wisconsin                           5.3%     5.6%      5.0%     4.7%
                       Brown County                        5.0%     5.2%      4.7%     4.5%
                       Outagamie County                    5.3%     5.6%      4.8%     4.5%
                       Central Wisconsin Region            5.1%     5.3%      5.0%     4.8%
                       Source: U.S. Department of Agriculture, Economic Research Service

Unemployment rates compared with the annual average wage for the Central Wisconsin Region
show Wood County to have the largest average annual wage compared to Wisconsin and the
other counties. Interestingly, Wood County also has the highest unemployment rates when
compared with the same areas. This is again illustrated when comparing average annual wage to
the median household income for the year 2003. Wood County has the lowest median household


                                                                                                       28
income for the year 2003, while Outagamie County is well above the other counties with respect
to median household income. Wood County has the highest wage but not enough jobs available
for their workforce, resulting in low household income.

Figure II-14 - Unemployment Rates, Average Annual Wage and Median Household Income
               for Wisconsin and Counties - 2003

                              Average Annual                                Median Household
              2003                Wage               Unemployment               Income
                                       % of WI                                        % of WI
          Wisconsin       $   33,421    100.0%             5.6%            $ 46,538    100.0%
          Brown           $   34,416    103.0%             5.2%            $ 49,795    107.0%
          Outagamie       $   33,027     98.8%             5.6%            $ 52,654    113.1%
          Marathon        $   31,295     93.6%             4.9%            $ 48,643    104.5%
          Portage         $   29,694     88.8%             5.1%            $ 45,722     98.2%
          Wood            $   35,387    105.9%             5.9%            $ 44,540     95.7%
   Source: U.S. Dept. of Labor, Bureau of Labor Statistics; U.S. Dept. of Agriculture Economic Research Service

Wood County finds itself above the Wisconsin and national average unemployment rate for the
time period 2000-2005, with the exception of the years 2002 and 2003 when Wood County was
slightly below the national unemployment rate. Marathon and Portage Counties fared better,
both with unemployment rates below Wisconsin and the national rates for the years 2001-2005.
In 2000, Portage County was slightly above the Wisconsin unemployment rate.

Figure II-15 - Wisconsin Unemployment Change by County - May 2005 - May 2006




 Source: U.S. Department of Labor, Bureau of Labor Statistics



                                                                                                             29
Unemployment rates peaked in 2003 and have dropped in the subsequent years. In 2005,
Wisconsin’s unemployment rate was 4.9%. Wood County was above this figure with an
unemployment rate of 5.7%. Marathon and Portage Counties were both below the state average.
Portage County was slightly below with 4.6% and Marathon County much lower with a 4.2%
unemployment rate for 2005.

Outagamie County has been near or equal to the Wisconsin unemployment rate since 2001. For
the following years Outagamie County looked like Marathon or Portage County, with wavering
unemployment rates. For example, in 2002 and 2003 Outagamie County unemployment was
equal to the state average, above Marathon and Portage Counties, and below Wood County.
Brown County had the lowest unemployment rate of all the counties examined, except in 2005,
when Brown County’s unemployment rate was 4.5%, equal to Outagamie County.




                                                                                         30
              CHAPTER III: BUSINESS AND ECONOMIC PROFILES

Industry and Income – Regional Outlook

Regional income can also be compared by particular industry. For example, the retail industry
tends to have low pay, but has a high percentage of workers. In the Central Wisconsin region,
retail trade accounts for 13% of all employment but only 7% of total income. Other industries
such as health care and manufacturing have a better ratio of income to employment. In the
Central Wisconsin region, manufacturing accounts for 17% of all employment and 23% of total
income.

Figure III-1 - Employment and Income as a Percentage of the Total by Industry - 2004

                              Regional Economy by Industry - 2004
               25%
                            Income      Employment
               20%

               15%

               10%

                 5%

                 0%
                        AN RM T E
                                 SS IES




                                         RY
                                  UC G
                                           N
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                                          A
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                                        IO



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                                      AR
                     AD AL ICE




                               AC AL




                                         R
                               FO TI O
                                      TA
                             EA I ON




                                     ST
                              FE LI T




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                                    AT




                             ST UR
                            SP AT
                                     M




                            UF ES
                            W TR
                           IN H C
                                    V
                                 RN




                                   I




                          R RT
                                  R



                         PR UT




                                  T
                        AN OL
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                   N




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                 NA
              FI




                      Source: U.S. Department of Commerce, Bureau of Economic Analysis

Shift-Share Analysis for Central Wisconsin from 1995-2005

An online shift-share analysis tool2 from the University of Georgia was used to analyze
employment changes by industry for the Central Wisconsin counties. Marathon, Wood and
Portage counties were examined as one area.

The first component, or the national growth component, meaning the U.S. employment growth
rate over the same time, 1995-2005, contributed 17,609 jobs to the Central Wisconsin region.
This growth was mostly in education and health services, manufacturing and trade, and the

2
    http://www.georgiastats.uga.edu/sshare1.html


                                                                                               31
transportation and utilities sectors. These sectors also have the highest employment numbers in
the Central Wisconsin counties.

The second component, or the industrial mix component, resulted in a net loss of jobs by 5,349,
mostly due to large losses in the manufacturing sector. The industrial mix component
contributed employment to the construction sector by 25% and the education and health services
and professional and business sectors by over 10%.

The final component is referred to as the competitive share. The competitive share had a net
gain of 2,667 jobs, although almost half the industries examined (11 total) had a negative growth
rate due to the competitive share. Positive contributions can be seen in the education and health
services, information and public administration sectors at large growth rates, all over 15%.
Manufacturing and trade, transportation, and utilities grew but at a lower growth rate. However,
the competitive share component did not contribute to the construction industry but resulted in a
net loss of 58%, or 4,060 jobs.

Figure III-2 - Shift-Share Analysis for Central Wisconsin Region – 1995-2005

                                              National              Industrial             Competitive
                                               Growth                  Mix                    Share
Sector                                      %        #            %         #             %          #
Education and Health Services              13.8     2,893         10.9     2,285          17.7     3,718
Manufacturing                              13.8     4,446        -31.5   -10,174           9.9     3,202
Trade, Transportation, & Utilities         13.8     4,123        - 4.4   - 1,284           6.0     1,798
Public Administration                      13.8       528        - 4.8   - 182            21.6       830
Information                                13.8       244        - 7.1   - 127            21.0       372
Natural Resources & Mining                 13.8       239        -13.1   - 228            13.3       231
Other Services                             13.8       571          1.6         68        - 5.6    - 231
Professional & Business Services           13.8       918         17.3     1,154         -13.7    - 912
Financial Activities                       13.8     1,285          5.5       510         -10.5    - 980
Leisure & Hospitality                      13.8     1,393          8.6       869         -12.9    -1,301
Construction                               13.8       969         25.0     1,760         -57.7    -4,060
Total                                              17,609                - 5,349                   2,667
Source: Table 2 from Shift-Share Analysis for Marathon, Portage and Wood County provided by
http://www.georgiastats.uga.edu/sshare1.html

Industry Earnings Change from 2001 to 2004

"Earnings" refers to total farm and nonfarm income and can be separated by industry. Total
earnings for the Central Wisconsin region were $6.0 billon for 2001. Total earnings for this
region in 2004 were $6.9 billion. Figure III-3 below illustrates these earnings as a percentage of
the total for the industries listed.




                                                                                                      32
Figure III-3 - Earnings by Industry for the Central Wisconsin Region as a Percentage of
                  Total Earnings - 2001 and 2004

                                 FARM
                    MINING & FORESTRY
                        CONSTRUCTION
                       MANUFACTURING
                    WHOLESALE TRADE
                         RETAIL TRADE
     TRANSPORTATION & WAREHOUSE
                         INFORMATION
            FINANCE, INS. & REAL ESTATE
       PROFESSIONAL & MANAGEMENT
   ADMN. & WASTE SERVICE & UTILITIES
  HEALTHCARE AND SOC. ASSISTANCE
                             SERVICES
                          GOVERNMENT


                                     0.00    0.05      0.10          0.15     0.20   0.25   0.30

                                                              2001     2004

                        Source: U.S. Department of Commerce, Bureau of Economic Analysis

Note: Data for the Central Wisconsin counties on total earnings is subject to release standards.
Therefore some industry earnings are not reported by the BEA. By county, unreported data is as
follows: Marathon County is complete. There is no Portage County data for Forestry, Mining,
Utilities and Wholesale Trade for 2001 and 2004. There are no Wood County figures for
Forestry, Mining, Professional and Tech Services, and Management in 2001. In 2004, the
missing industries were Administrative and Waste Services and Management.

The prime industry economic drivers for Central Wisconsin are the following:

        •      Manufacturing
        •      Health Care
        •      Government
        •      Finance, Insurance and Real Estate
        •      Retail Trade

The Central Wisconsin region saw a drop in manufacturing income by 1.4%. This regional total
is due in part to the individual county’s earnings. Marathon County did not actually lose
manufacturing income, but gained by a small 0.2%, while Portage County dropped by 1.6% and
Wood County dropped by 3.6%. Conversely, the health care industry’s earnings were up 2%
regionally in 2004. Marathon County rose by 1.5% and Portage County by nearly 1%. Wood
County though gained 3.6% in health care industry earnings.




                                                                                                   33
Figure III-4 shows the percentage of the total earnings a specific industry had in 2004 for the
three Central Wisconsin counties. Portage County’s earnings are distributed more evenly as
compared with Wood and Marathon Counties, each of which has one industry which visibly
leads in earnings.

Figure III-4 - Percentage of Total Earnings by Industry in Central Wisconsin Counties –
               2004

            100

             80

             60

             40

             20

              0
                           Marathon                         Portage                         Wood

             Government     Healthcare     Finance & Real Estate      Manufacturing     Transportation   Retail

                    Source: U.S. Department of Commerce, Bureau of Economic Analysis

Business Patterns

From a regional standpoint, the number of business establishments in these three counties barely
grew. Overall growth combined for Marathon, Portage and Wood Counties is 0.2% for the time
period 1998-2004. Growth for individual counties can be seen in the graph below.

Figure III-5 - Growth Rate for Business Establishments – 1998-2004
                                   Business Establishm ent Grow th from 1998-2004
                                                     (percent)


                                           US

                                            WI

                                      Brow n


                                  Outagamie

                                   Marathon

                                     Portage


                                          Wood

                          -0.04   -0.02          0   0.02      0.04      0.06    0.08       0.1


                            Source: U.S. Census Bureau, County Business Patterns



                                                                                                                  34
Marathon, Wood and Portage Counties are below Wisconsin and the U.S. with respect to growth
in business establishments. Marathon County actually experienced an overall decline in business
development from 1998 to 2004. The counties of Outagamie and Brown had business growth
close to 10% from 1998 to 2004. The Central Wisconsin counties therefore are quite behind in
business establishment expansion, in comparison to the U.S., Wisconsin and other counties.

County Business Patterns from 1998-2004 show little gain if any at all in Marathon, Portage and
Wood Counties. Marathon County exhibited a loss of business establishments, while Portage
County was up by 3 establishments and Wood County had an overall gain of 19 establishments
from 1998-2004. Outagamie County gained 440 business establishments in this same time
period. Growth rates for this time period can be seen in Figure III-6.

Figure III-6 - Business Establishments by County – 1998 and 2004

                                                            1998        2004
                      Brown County                          6,050       6,610
                      Outagamie County                      4,499       4,939
                      Marathon County                       3,371       3,363
                      Portage County                        1,630       1,633
                      Wood County                           1,900       1,919
                      Source: U.S. Census Bureau, County Business Patterns


Marathon County business establishments peaked in 2000 with 3,473 total establishments and
declined every year, ending at 3,363 total establishments in 2004. Loss in establishments can be
seen in these industry categories: construction, manufacturing, retail trade, accommodation and
food service, and other services. These industries lost about 20 establishments each from 2000
to 2004. Health care and finance/insurance gained establishments. Employment in the
manufacturing and finance/insurance industries fluctuated up and down throughout these years,
but both industries have a large number of county employees. Health care employment numbers
grew steadily from 2000 to 2004.

                           Marathon County Industry Losses and Gains
                 Increase in Establishments          Decrease in Establishments
             Health Care                        Construction
             Finance, insurance and real estate Manufacturing
                                                Retail
                                                Accommodation and food service
                                                Other services

Portage County business establishments remained stagnant during the 1998-2004 time period.
Establishment totals were the lowest in 2002, but began to rise in the following years. Overall
losses in establishments can be seen in the following industries: construction, manufacturing,
retail trade, and accommodation and food service in small numbers. This is made up for by
industries which gained establishments such as health care, financial/insurance, and professional
services. Employment for these industries usually follows the establishment patterns.


                                                                                               35
Employment declined in manufacturing by 800 employees, but rose by about the same number
of employees in the health care industry.

                             Portage County Industry Losses and Gains
                  Increase in Establishments           Decrease in Establishments
             Health Care                          Construction
             Finance, insurance and real estate   Manufacturing
             Professional services                Retail
                                                  Accommodation and food service

Wood County business establishments over the time period 1998-2004 topped out in 2002 with
1,955 establishments but ultimately ended with 1,919 in 2004, an overall gain of 19 firms.
Establishment losses can be seen in the retail and services industries, each dropping by about 20
firms. The construction industry did not change much, with an overall difference of 2 firms.
Other industries that expanded are manufacturing, financial activities, health care, and
accommodation and food service. Despite the addition of 13 manufacturing firms, this industry
lost over 1,500 employees overall. Employment in the health care industry grew at a steady pace
adding 1,800 employees over the 1998-2004 time period.

                             Wood County Industry Losses and Gains
                   Increase in Establishments        Decrease in Establishments
              Manufacturing                       Retail
              Health Care                         Other services
              Finance, insurance and real estate
              Accommodation and food service

Brown County had growth in most industry establishment numbers over the 1998-2004 time
period. The professional industry added nearly 100 firms, while the construction, financial, and
health care industries added around 75 firms each in that time period. Manufacturing added
about 40 establishments and 1,200 employees. Manufacturing also has the most employees with
over 25,000. The retail and health care sectors employ 16,000 employees each. Information and
technology increased by only 6 firms and lost about 300 employees during the 1998-2004 time
period.

Outagamie County showed growth in almost all industries, most notably in the construction
industry which added 116 firms in the 1998-2004 time period. Retail trade, professional services
and accommodation and food services also had notable growth. The manufacturing industry
holds the most employees in this County, with over 18,000 employees from the workforce. The
retail industry employed over 14,000 people and the health care industry had nearly 10,000
employees in 2004.

Nonfarm Proprietors’ Income

Among the five counties, Brown County maintained the highest level of nonfarm proprietors’
income from 1999 to 2004. It is also the only county whose nonfarm proprietors’ income was
above $400 million during the five-year period. Wood County and Portage County had the
lowest and second lowest nonfarm proprietors’ income and they remained relatively stable. In


                                                                                               36
contrast, the other two counties fluctuated up and down throughout the 5 years. The three
counties (Brown, Marathon, and Outagamie) proprietors’ income dropped down from 2001 to
2003 after the recession cycle. After 2003, nonfarm proprietors’ income climbed slowly for all
five of the counties discussed.

The year-to-year percentage change reveals that nonfarm proprietors’ income changed
significantly in both the five counties and the state of Wisconsin as a whole. However, the U.S.
did not see dramatic change in nonfarm proprietors’ income during those five years. From 2000
to 2001, nonfarm proprietors income in Wisconsin, Brown County and Wood County declined
significantly, compared with the U.S. which only dropped by 2%. From 2001 to 2003, the
percentage changes for all the counties, Wisconsin and U.S. were much more clustered than in
the other years. They were very small; nearly zero or even negative change. When approaching
the year 2004, the change in nonfarm proprietors’ income for the five counties, Wisconsin and
U.S. all converged to a similar point, around 9%.

According to percent change over the five-year period, the U.S. obtained a slightly bigger
positive change than Wisconsin. Among the five counties, nonfarm proprietors’ income in
Outagamie County rose the most, nearly as much as that in Wisconsin. Wood County had the
worst result. Its nonfarm proprietors’ income dropped by more than 20% over the five year
period.

Proprietors’ Income

Proprietors' income is the current-production income of sole proprietorships, partnerships, and
tax-exempt cooperatives. It includes monetary interest (except dividends) received by non-
financial business, and rental income received by persons not primarily engaged in the real estate
business.

When the three Counties of Marathon, Portage and Wood are considered as a whole Central
Wisconsin region, the region remained stable in proprietors’ income from 1985 to 2000 and then
experienced a sizable growth, primarily due to the contribution from Marathon County. The
table below gives the proprietors’ income in the Central Wisconsin region, Wisconsin and the
U.S.


Figure III-7 - Proprietors’ Income – 1985-2004

                                  1985           1990            1995       2000         2004
United States                   $263.6 B       $382.0 B        $493.7 B   $730.5 B     $895.3 B
Wisconsin                         $4.8 B         $5.9 B          $6.4 B     $9.1 B      $11.5 B
Central Wisconsin Region        $256.1 M       $295.2 M        $279.6 M   $414.3 M     $448.1 M
B = Billion, M = Million
Source: U.S. Department of Commerce, Bureau of Economic Analysis

As shown above, the U.S.' values are far larger than those for Wisconsin and the Central
Wisconsin region, so there would be little point in using these absolute values to compare the


                                                                                                 37
trends in proprietors’ income for the three areas. The alternative is to transfer the original data
into normalized percentages. Data for all the years except 1985 are divided by the value for
1985 to get the normalized percentages. That is to say, the 1985 figures are set as the standard
equal to 100% for each area. All of the data for the subsequent years are expressed as
percentages divided by the original 1985 figure. In this way, Figure III-8 below displays
percentages, which can clearly reflect how much growth occurred in the corresponding area.

Figure III-8 – Proprietors’ Income Growth for the U.S., Wisconsin & Central Wisconsin –
               1985-2004
.

                          Proprietors' Income as a Percent of the 1985 Total
             350%
                         US      Wisconsin      Region
             300%

             250%

             200%

             150%

             100%

              50%
                        1985         1990           1995          2000          2004

                    Source: U.S. Department of Commerce, Bureau of Economic Analysis

During the past 20 years, although Wisconsin and the Central Wisconsin region have shown
some gains in proprietors’ income, they have been growing at significantly lower rates as
compared to the national figures. In addition, the Central Wisconsin regional growth rate in
proprietors’ income has consistently trailed Wisconsin as a whole. The Central Wisconsin
region showed a decline of 6% in proprietors’ income from 1990 to 1995. With the exception of
this slight decline, national, state and regional proprietors’ income has risen steadily over the
period from 1985 to 2004.

Figure III-9 below reveals that Brown County exhibited the highest proprietors’ income of the
five Wisconsin counties examined. Portage County and Wood County are both at the lowest
level of proprietors’ income. Marathon County and Outagamie County proprietors’ income are
situated between Brown County and the lowest two.




                                                                                                      38
Figure III-9 - Change in County Proprietors’ Income – 1985-2004

                                  Proprietors' Income by County - 1985-2004
                      $600
           Millions               1985      1990       1995        2000    2004
                      $500


                      $400


                      $300


                      $200


                      $100


                        $0
                                 Brown       Outagamie        Marathon    Portage        Wood


                             Source: U.S. Department of Commerce, Bureau of Economic Analysis

As for the growth rate of proprietors’ income, Portage and Wood Counties showed little gain
throughout the 20-year period. Wood County was the only one that had an overall decline in
proprietors’ income from 1985 to 2004. Brown County grew in proprietors’ income at a
substantially rapid rate, during the 2001 recession when it dropped a little after its peak in the
year 2000. From 1985-1990, when the proprietors’ income of other counties stabilized, Brown
County started to rise significantly, maintaining further advantage in proprietors’ income over
the other counties. Brown County exhibited particularly robust growth, nearly doubling its
proprietors’ income from 1995 to 2000. During the same period, Marathon County also doubled
its figure. Outagamie County steadily rose over the past twenty years.

Largest Employers

The Wisconsin Department of Workforce Development provides information about the top
employers according to the number of people employed. The top three employers, with 1000+
employees for the Central Wisconsin region, Brown and Outagamie Counties are listed below:

       •   Marathon County
             • Aspirus Wausau Hospital, Inc.
             • Kolbe & Kolbe Millwork Company, Inc.
             • Liberty Mutual Insurance Company

       •   Portage County
              • Sentry Insurance: A Mutual Company
              • University of Wisconsin – Stevens Point
              • Stevens Point Public Education System



                                                                                                39
        •   Wood County
              • Marshfield Clinic
              • St. Joseph’s Hospital of Marshfield
              • Stora Enso North American Corporation

        •   Brown County
               • Green Bay Public School District
               • Georgia-Pacific Corporation (formerly Fort James)
               • Humana Insurance Company

        •   Outagamie County
               • Thedacare Group
               • Appleton Area School District
               • Thrivent Financial For Lutherans

Farm Income

Farm income is the sum of wage and salary disbursements, employer contributions for employee
pension and insurance funds, and proprietors’ income in the agriculture industry (crop
production and animal production only—NAICS subsectors 111 and 112). Farm income
comprises the net income of sole proprietors, partners, and hired laborers arising directly from
the current production of agricultural commodities, both livestock and crops, and specifically
excludes the income of non-family farm corporations.

Figure III-10 - Farm Income – 1985-2004

                              1985         1990           1995       2000       2004
United States                $32.0B       $46.8B         $39.7B     $44.5B     $64.0B
Wisconsin                     $1.0B         $1.3B       $764.4M    $877.1M       $1.6B
Central Wisconsin Region     $76.2M      $114.9M         $65.6M     $71.0M    $121.5M
B = Billions, M = Million
Source: U.S. Department of Commerce, Bureau of Economic Analysis

Wisconsin and the Central Wisconsin region exhibit similar patterns with respect to farm
income. Wisconsin and the Central Wisconsin region's farm incomes experienced two peak
times, in 1990 and 2004. In between, Wisconsin and the region’s farm income dropped
dramatically and were sustained below the 1985 figure, while the U.S. had only a small loss in
percentage of farm income. Overall, the U.S. exhibited considerably larger growth in farm
income than Wisconsin and the Central Wisconsin region in the last 20 years.




                                                                                                 40
Figure III-11 - Growth Rate of Farm Income for the U.S., Wisconsin and
                Central Wisconsin – 1985-2004

                                          Farm Income Growth Rate - 1985-2004


                                 Central WI
                                  Region




                                 Wisconsin




                              United States



                                          0.0%     20.0%    40.0%    60.0%   80.0% 100.0% 120.0%


                             Source: U.S. Department of Commerce, Bureau of Economic Analysis

Among the five counties, Marathon County generally had the highest farm income, which
peaked in 1990 with nearly $68 million, and declined dramatically in the following five years.
During the same period, all five of the counties dropped more or less in farm income to around
their respective 1985 levels. Except for Wood County, farm income was up a bit in the period
from 1995-2000. Then Marathon, Wood and Brown Counties in particular showed gains in
2004.

Figure III-12 - Farm Income Comparison by County – 1985-2004


                                        Farm Income by County - 1985-2004
                       $80
            Millions




                                   1985       1990         1995      2000       2004
                       $70

                       $60

                       $50

                       $40

                       $30

                       $20

                       $10

                        $0
                                  Brown          Outagamie        Marathon      Portage       Wood

                             Source: U.S. Department of Commerce, Bureau of Economic Analysis




                                                                                                     41
In summary, farm income in each of the five counties has fluctuated up and down in the past 20
years. The general development pattern was that farm income was high in 1990, but declined
during the following decade. It began rising rapidly again in 2004.

Economic Benchmarks

Per Capita Income - Historical Growth

Per capita income is the total income for a geographic area (e.g., the country, a state or county)
divided by the population of the geographic area. For example, the per capita income for Wood
County in 2004 is calculated by totaling the income of Wood County residents, including
earnings, investment income, and transfer payments, and dividing this total income pool by the
county’s population.

Figure III-13 - Per Capita Income Growth Percentage – 1985-2004


                          US

                           WI

                       Region

                       Brown

                    Outagamie

                     Marathon

                      Portage

                        Wood


                                0.0       0.5         1.0          1.5          2.0


                   Source: U.S. Department of Commerce, Bureau of Economic Analysis



As reported by the BEA, per capita income for this region has grown from about $15,000 in
1984 into the $30,000+ range (with the exception of Portage County) in 2004. The Central
Wisconsin region’s growth rate is actually above the national and state average for the 1985-
2004 time period, all of which were over 100%, as they doubled their per capita averages. The
Central Wisconsin region’s per capita income growth was 140.9% over the 1985-2004 time
period. The national growth rate was 123.9% and Wisconsin’s per capita income growth rate was
132.4%. Even though the region has experienced better growth, the per capita value is still
below the U.S. and Wisconsin averages, as seen in Figure III-14 below.




                                                                                                 42
Figure III-14 - Per Capita Income for U.S., Wisconsin and Central Wisconsin Region –
               1985-2004

             $35,000

             $30,000

             $25,000

             $20,000

             $15,000

             $10,000
                     85


                             87


                                     89


                                             91


                                                     93


                                                             95


                                                                     97


                                                                             99


                                                                                     01


                                                                                             03
                  19


                          19


                                  19


                                          19


                                                  19


                                                          19


                                                                  19


                                                                          19


                                                                                  20


                                                                                          20
                            United States            Wisconsin              Central WI Region

                    Source: U.S. Department of Commerce, Bureau of Economic Analysis

Recent Trends – Per Capita Income

The Central Wisconsin counties are below the national and state per capita income average.
Wisconsin’s per capita income in 2004 was $32,166. Portage County has the lowest average and
is followed by Marathon County. Wood County is nearly equal to the state average and closely
matches Outagamie County. Brown County had the largest per capita income of the counties
examined. County per capita incomes for 2004 are shown as a percentage of the state average
below.

Figure III-15 - Per Capita Income – 2004

                                     Per Capita Income ($)                        % of U.S. Average
Wisconsin                                  $32,166                                       97%
Brown County                               $33,204                                      103%
Outagamie County                           $32,377                                      101%
Marathon County                            $31,206                                       97%
Portage County                             $28,874                                       90%
Wood County                                $32,031                                      100%
   Source: U.S. Department of Commerce, Bureau of Economic Analysis


Portage County had the lowest per capita income of the three Central Wisconsin counties in any
year for the time period 1999-2004. Marathon County per capita income growth was between
Portage and Wood, steadily growing over this time period. In 1999, Wood County per capita
income trailed the state average by a significant amount. This was also true in Wood County for
the next three years. Wood County tightened the gap between their per capita income and
Wisconsin’s in 2003 and 2004.



                                                                                                      43
Figure III-16 - Per Capita Income – 1999-2004

                            1999          2000          2001          2002             2003      2004
United States             $27,939       $29,845       $30,574       $30,810          $31,484   $33,050
Wisconsin                 $27,135       $28,570       $29,400       $30,025          $30,664   $32,166
Brown County              $28,285       $29,811       $30,447       $31,361          $31,711   $33,204
Outagamie County          $27,243       $29,077       $29,619       $30,060          $30,596   $32,377
Marathon County           $25,711       $27,244       $28,183       $28,974          $29,701   $31,206
Portage County            $23,408       $24,837       $26,150       $26,740          $27,862   $28,874
Wood County               $26,401       $27,622       $28,212       $29,482          $30,584   $32,031
       Source: U.S. Department of Commerce, Bureau of Economic Analysis

Growth rates for the U.S., Wisconsin, Brown County and Outagamie County for 1999-2004 are
all around 18%, while the Central Wisconsin region’s average is 22%. These counties have
outperformed the competition in income growth rate, but their per capita income still lags behind
the state and U.S. averages.

Average Annual Wage 2005

Wood County’s average annual wage grew the most during the 2001-2005 time period, 14.4%,
compared to Wisconsin’s 12.5% growth rate over the same period. Marathon County
experienced a 13.1% growth in average wage, while Portage County’s growth over this time
period was only 8.5%. By comparison, Brown and Outagamie Counties' average wage growth
was about 1% lower than the state average. The Central Wisconsin counties of Wood and
Marathon fared well, while Portage County saw the lowest growth rate. Average annual wages
for 2005 are shown in Figure III-17.

Figure III-17 - Average Annual Wage – 2005

                                        Annual Wage ($)                   % of WI Average
Wisconsin                                  $35,503
Brown County                               $36,320                               102.3%
Outagamie County                           $35,400                                99.7%
Marathon County                            $33,260                               93.7%
Portage County                             $31,479                                88.7%
Wood County                                $37,779                               106.4%
Source: Wisconsin Department of Workforce Development, Office of Economic Advisors

Wage and Salary Disbursements

Wage and salary disbursements include the monetary remuneration of employees, including
corporate officers’ salaries and bonuses, commissions, pay-in-kind, incentive payments, and tips.
Figure III-18 indicates how wages changed from 1985 to 2004 in the six Wisconsin counties.

The three counties in the Central Wisconsin region exhibited significantly lower wages in
comparison to the other counties, with relatively slower growth rates. Portage County wages had


                                                                                                     44
the lowest wages and also grew at the slowest rate. By 2004, Portage County wages were slightly
above $1.0 billion.

Figure III-18 - Wage and Salary Disbursement Summary – 1985-2004

                                     1985   1990   1995   2000   2004
           United States             $2.0T $2.7T $3.4T $4.8T $5.4T
           Wisconsin                $35.6B $49.2B $35.3B $87.9B $99.1B
           Central Wisconsin Region $1.8B $2.6B $3.4B $4.5B $5.2B
          T = Trillion, B = Billion
                     Source: U.S. Department of Commerce, Bureau of Economic Analysis

Figure III-19 - Wage and Salary Disbursement Changes Since 1985


                 Wage and Salary Disbursement as a Percent of the 1985 figure

         300%
                        US      Wisconsin      Region*

         250%


         200%


         150%


         100%


          50%
                     1985           1990           1995           2000           2004
                    Source: U.S. Department of Commerce, Bureau of Economic Analysis

The Central Wisconsin region has steadily grown in wage and salary disbursement to more than
2.5 times that of 1985 disbursement levels in the past 20 years. The region's growth rate was
very close to the Wisconsin and U.S. rates. Generally, Wisconsin's wage and salary
disbursement rose slightly faster than U.S., while the Central Wisconsin region grew a few
percentage points faster than Wisconsin.




                                                                                            45
Figure III-20 - Wage and Salary Disbursement by County – 1985-2004


                              Wage and Salary Disbursement by County - 1985-2004
          Millions   $6,000
                                  1985     1990      1995      2000      2004
                     $5,000


                     $4,000


                     $3,000


                     $2,000


                     $1,000


                        $0
                                  Brown       Outagamie     Marathon       Portage        Wood

                              Source: U.S. Department of Commerce, Bureau of Economic Analysis

Wages and salaries in all five counties have grown consistently over the past 20 years. Brown
County had the highest wages and also experienced the fastest overall growth rate. By the year
2004, wages in Brown County were more than triple what they were in 1985.

Transfer Income

Current personal transfer receipts consist of income payments to persons for which no current
services are performed, and net insurance settlements. Transfer income is the sum of
government social benefits and net current transfer receipts from business.

Figure III-21 shows the national, state and regional data for transform income over the period
from 1985-2004.




                                                                                                 46
Figure III-21 - Change in Transfer Income Since 1985


                         Transfer Income as a Percent of the 1985 figure
            350%
                            US       Wisconsin       Region*
            300%

            250%

            200%

            150%

            100%

              50%
                        1985           1990           1995           2000           2004
                     Source: U.S. Department of Commerce, Bureau of Economic Analysis


As seen in the figure, there was a strong relationship between the transfer income for the Central
Wisconsin region and that for Wisconsin. The growth rate of Central Wisconsin region transfer
income was just a few percentage points above Wisconsin, while it consistently trailed the
national gain.

Figure III-22 - Transfer Income Comparison – 1985-2004

                                    1985            1990             1995             2000    2004
United States                     $425.3B         $595.6B          $877.4B            $1.1T    $1.4T
Wisconsin                           $9.3B           $11.7B           $15.6B          $19.2B   $24.3B
Central Wisconsin Region         $417.8M          $525.2M          $717.4M         $894.1M     $1.1B
T = Trillion, B = Billion, M = Million
                        Source: U.S. Department of Commerce, Bureau of Economic Analysis

Transfer income consistently increased in all of the five counties. Personal transfer income
growth in Brown County consistently ranked above the other four counties from 1985 to 2004.
Outagamie and Marathon Counties, following Brown County in sequence, had transfer income at
nearly the same level. Portage County grew at the slowest rate, with the lowest amount of
transfer income over the 20-year period.

As shown in the figure below, the patterns of transfer income look very similar to that of the
wages in the five counties. A minor difference between these two growth patterns was that the
transfer income grew relatively faster than wages did from 2000 to 2004.




                                                                                                     47
Figure III-23 - County Transfer Income – 1985-2004


                                     Transfer Income by County - 1985-2004
                   $900
        Millions

                                                       1985    1990     1995       2000   2004
                   $800

                   $700
                   $600

                   $500

                   $400

                   $300

                   $200

                   $100

                    $0
                             Brown        Outagamie      Marathon        Portage          Wood

                          Source: U.S. Department of Commerce, Bureau of Economic Analysis




                                                                                                 48
                          CHAPTER IV: SWOT ANALYSIS
A basic step in developing a strategic economic plan is to assess the strengths, weaknesses,
opportunities and threats to the region’s economy. This process is commonly referred to as a
SWOT analysis.

The SWOT analysis is a process used to assess the challenges and strategies for economic
development. A SWOT analysis can be used as a framework to gather public input and to
engage the public in thinking about the current economic condition and the economic
opportunities for the future. The Central Wisconsin analysis asks four basic questions:

   •   What are the economic strengths of the Central Wisconsin economy?
   •   What are the economic weaknesses of the Central Wisconsin economy?
   •   What are the economic opportunities for the Central Wisconsin economy?
   •   What are the threats and barriers to economic development and success in the Central
       Wisconsin economy?

In completing this assessment, data was gathered from a number of sources. A large amount of
data was obtained through public input as the consultants completed over 70 interviews as part of
the study. Residents were interviewed in Marathon, Portage and Wood counties. Group and
individual interviews were conducted in several Central Wisconsin communities, including
Stevens Point, Wisconsin Rapids, Marshfield, and Wausau.

Other sources of information for the SWOT analysis included demographic and statistical data
obtained from government sources such as the Census Bureau, the Bureau of Labor Statistics,
and the Bureau of Economic Analysis.

Based upon these data sources, the following represent a summary of the major points with
regard to strengths, weaknesses, opportunities, and threats related to the Central Wisconsin
economy.

Strengths

The labor force, favorable quality of life, and recreational opportunities represent significant
reported strengths in the Central Wisconsin economy. Other strengths cited most often by
residents include the educational and health care systems. Strengths reported by area residents
include:

   •   Workforce (strong work ethic, large labor pool, mobility of workforce, educated
       workforce, good vocational training, low cost labor, abundant job opportunities)
   •   Environment (natural resources, the Wisconsin River and other bodies of water, rural
       areas with recreational opportunities and city amenities, agriculture, available land)
   •   Central location




                                                                                                   49
   •   Education (access, good schools at all levels - PK-12, technical, and colleges /
       universities, postsecondary education, quality of system)
   •   Health care (access to quality health care, medical complex)
   •   Transportation / Logistics (time / distance advantage, highway access, trucking)
   •   Housing (affordable homes, safe neighborhoods)
   •   Economy (diversified tax base, low cost of living, balanced economy)
   •   Recreation (fishing, boating, fine arts )
   •   Community (good place to raise a family, mixture of generations, commitment to
       community, family values, homogenous population, family connections, safety, small
       town feel, low crime rate, quality of life)
   •   Entrepreneurism (forward thinkers, new WIN chapter)
   •   Government and politics (political awareness, stable and collaborative government,
       strong community leaders, dedicated to the region)

Analysis

Residents who were interviewed offered a comprehensive list of strengths in the region. Based
upon our own research, we would highlight several areas of strength in Central Wisconsin. The
region benefits from the presence of an economic development infrastructure of professional
organizations dedicated to fostering economic development in the region, including Centergy,
Inc., the Heart of Wisconsin Business & Economic Alliance, the Marshfield Area Chamber of
Commerce and Industry, the Portage County Business Council, the Central Wisconsin Economic
Research Bureau, the North Central Wisconsin Regional Planning Commission, the North
Central Wisconsin Workforce Development Board, and the Wausau Region Chamber of
Commerce. These organizations help to stimulate local economic development projects and
bring focus to critical issues such as land use and transportation plans, business attraction and
retention, and workforce education. Many Wisconsin counties lack the organizational
infrastructure that Central Wisconsin possesses to build effective economic development
initiatives.

The region boasts strong quality of life. In each town that we visited, residents invariably
offered favorable assessments of the community, the attractive lifestyle, the climate, the safety
and beauty of the environment, and the recreational opportunities available. These issues are of
critical importance in attracting and retaining the educated, highly paid workers necessary to
continue to grow the regional economy. While indeed a strength, it should be noted that this
does not necessarily differentiate Central Wisconsin from other competitors. In many other
studies that we have done over the years, we find that in most locations, people feel that quality
of life is an advantage in their community. This was true in the Northeastern Wisconsin (NEW)
study, our work in Door County, Wyoming, New Hampshire, Ohio and Kansas. High quality of
life is a strength, but in our view, it does not create a substantial competitive advantage. Quality
of life is a frequent asset that we observe in other projects we have done and in economic
strategy reports that we have read.




                                                                                                  50
A second strength that we observed is the natural resource assets in the region. The Central
Wisconsin region is blessed with abundant amounts of fresh water, productive soils, and wood
fiber. These natural assets are clearly displayed in the land cover map in Figure IV-1 below.
Figure IV-1: Land Cover Map




Source: Cartographic Solutions, Inc.



                                                                                                51
A third strength that we observed is several economic clusters that have long been part of the
regional economy and that are key to maintaining and growing the regional economy. The
Harvard Cluster Mapping Project was used to identify key clusters in the region. The highest
ranked cluster in the region was Forest Products and the region ranks second nationally
according to the Harvard data. Other clusters identified in the study included processed foods,
agricultural products, furniture, and distribution services.

These existing business clusters provide the region with a diversified job base and more
importantly, they are centers of knowledge and labor skills that feed into other clusters and
businesses in the region.

A fourth strength that we observed is the geography of the region and its central location in the
state. It is a natural center for meetings, training, and the distribution of goods. It is also a good
location relative to many major markets in the Midwest. The locator map in Figure IV-2 below
presents a good perspective on the geographical advantage of Central Wisconsin.




                                                                                                         52
Figure IV-2: Locator Map




Source: Cartographic Solutions, Inc.


                                       53
Weaknesses

Although workforce issues were frequently cited as regional strengths, it is apparent that some
residents perceive weaknesses as well. Concerns cited include a decline in the strong work ethic,
"brain drain", and a shortage of young, skilled, educated workers. Other primary weaknesses
identified by Central Wisconsin residents include concerns about housing and health care costs,
despite the fact that many residents cited these same issues as strengths. Numerous issues were
mentioned by are residents, including:

   •   Workforce issues (aging workers, short supply of skilled workers, declining work ethic,
       lack of respect for manual labor, lack of young talented workers, low wages, reduction in
       volunteerism)
   •   Housing (cost, taxes)
   •   Government (restrictive zoning, cost of services not shared adequately)
   •   Business climate (lack of retention in some areas, not enough high-paying jobs, lack of
       retail establishments, plant closings / worker dislocation)
   •   Telecommunications (aging infrastructure, lack of IT options and workers)
   •   Vision (lack of entrepreneurs and risk takers, declining volunteerism, perceived as a
       "dead" area by younger people, image problems, lack of corporate and individual
       benefactors)
   •   Health care (rising costs)
   •   Education (linkages between businesses and schools, declining enrollment, "brain drain")
   •   Entrepreneurial talent pool (lack of a deep pool of entrepreneurs)
   •   Capital (lack of risk capital, lack of corporate and individual benefactors)
   •   Transportation / Logistics (lack or air connections, arterial access, geographic location -
       distance from major metropolitan areas)

Analysis

In our view, certain weaknesses in the region are significant enough to warrant special attention.
As the data in Chapter II shows, the aging of the workforce and the overall educational
attainment of the workforce are critical issues for the economic future of the region. As
businesses continue to transition through the adoption of new technology and processes, the
amount of knowledge that a worker will need and the way in which work will be accomplished
continue to change dramatically. In this environment, an environment that is likely to continue
for some time, the educational skills and the training of the workforce become key elements in
any strategic economic plan.

Infrastructure, particularly related to highways and bridges also deserves special mention. There
are highway gaps such as the Highway 10 four lane expansion to Marshfield and the bypass link
of Highway 10 to Interstate 39 that will compete against a growing list of state highway projects.
There are also existing projects such as the Highway 51 project around Wausau that could be
delayed as cost overruns on other major state highway projects in southeastern Wisconsin absorb
more of the funding.


                                                                                                54
Another major concern involves the availability of risk capital. If the region is going to compete
for new professional firms and high-tech businesses that attract high wage jobs, it is crucial to
increase the amount of and access to early stage investment capital (i.e. coordinated angel
investing3). While angel investing is on the rise in Wisconsin, activity in Central Wisconsin is
not as robust as it could be. Marshfield Investment Partners and the more recently established
Central Wisconsin Business Angels are the only organized angel investing groups in the region,
but they have made a number of local investments to date. Risk capital is crucial in establishing
or attracting New Economy businesses. The lack of broader access to startup and investment
funds in Central Wisconsin stands out as a substantial weakness.

In addition, the information technology infrastructure will require substantial improvements in
order to attract and retain competitive business enterprises. Broadband Internet access and
updated IT technology are of paramount importance with respect to retaining not only high-
technology businesses, but the younger "creative class" of workers who will demand access to
such services outside of their workplaces as well.

Opportunities

There are a number of opportunities for economic growth in Central Wisconsin. Residents who
were interviewed saw promise in the health care field, particularly due to the expansion potential
of the Marshfield Clinic. Residents also noted the potential for continued workforce education,
business growth from within, and market opportunities appurtenant to the aging population.

Opportunities cited by Central Wisconsin residents included the following:
       •   Growth of existing small and medium-sized businesses
       •   Bio-fuels / biomaterials
       •   New business start ups
       •   Health care (Marshfield Clinic spin-offs including research, business services, and
           connections to angel investors)
       •   Food services and restaurants
       •   Housing expansion - more moderate level homes
       •   Communication about local and regional economies
       •   Workforce education and training
       •   Community cooperation (desire to address weaknesses, communication among residents
           and officials in the region)
       •   Aging population (expanded market opportunities, services for the aging, potential for
           transition to entrepreneurial activity)
       •   Business development (new conference center, more higher-tech jobs, support for startup
           businesses, more agriculture-based businesses, retail)
       •   Paper and forest products
       •   Green energies
       •   Tourism
3
    Angel investing is early stage investing for new business startups and expanding businesses.


                                                                                                   55
Analysis

We would largely agree with what residents of the region have identified as some of the best
opportunities for economic development. In particular, the presence of a major health care
provider represents a significant opportunity for economic development. The Marshfield Clinic
is one of the leading health care providers in the state, with potential reaching far beyond the
health care field. The angel investing group attracts entrepreneurs and investors with the
potential to develop new technologies. Viewed in concert with the thriving agricultural base, it
is apparent that Central Wisconsin is well situated to leverage its assets in the expanding field of
biotechnology.

A second and very large opportunity that we observe is in the area of logistics. The Harvard
cluster study has mapped this cluster as above the national average. We think that the
convergence of Class I rail, Interstate highways and a central location place Central Wisconsin in
a position to grow this cluster in ways that we describe in the next chapter.

The aging population is noteworthy as well. Some residents noted this as a weakness (based on a
perception that fewer younger, educated workers are locating in the region), but the realization
that an aging population provides market opportunities is an astute one. An aging population has
more money to spend at local businesses, has more need for health care services which drive the
regional economy, and is well poised to make investments in entrepreneurial initiatives.
Economic development professionals in the region would be well-advised to focus marketing
efforts on these residents who are in the best position to stimulate economic growth.

Threats

There are several significant threats that stand in the way of Central Wisconsin realizing its
economic growth potential. Most frequently cited by residents who were surveyed were the fear
of wealth, a quality workforce, and substantial businesses transferring out of the region. Several
other issues were noted as well, including:

   •   Aging workforce / worker shortage
   •   Brain drain
   •   Competition from other regions and global competition
   •   Funding threats to on-going and planned infrastructure projects, particularly highway and
       bridge projects
   •   Tax burden on new businesses
   •   Service and costs issues related to Class I rail service in the region
   •   Lack of availability of start-up and expansion equity capital
   •   Lack of economic development incentives
   •   Zoning issues
   •   Loss of corporate headquarters and regional offices
   •   Decline of the paper industry
   •   Media / information gap


                                                                                                  56
   •   High fuel prices
   •   Threats to agriculture (regulation, available workforce, aging workforce)

Analysis

Several threats noted by residents are not unique to Central Wisconsin. Global and local
competition for investment dollars is a concern in any region. However, by focusing on regional
efforts, Central Wisconsin can turn local competitors into allies, and leverage its strength to
minimize the threat of competition from other regions. Additionally, issues like the decline in
the paper industry are indicative of a global transition from the Old Economy to the New
Economy. Central Wisconsin needs to embrace new technologies and new industries and
opportunities in order to remain competitive in the New Economy.

In our view, the lack of risk capital noted by a few residents represents one of the largest threats
to economic development in the region. As noted above, venture capital is critical in New
Economy business attraction and retention. Central Wisconsin must attract investment dollars,
and encourage its own residents who are in a financial position to become active angel investors
to do so.

The rural environment, the existing business base, and the distance from the state's largest
metropolitan areas limit or prevent certain types of economic development. However, in this
increasingly global economy, investment in infrastructure improvements and state-of-the-art
telecommunications and other technology should be explored to minimize this threat.

Gaps and Barriers to Economic Development

There are a number of clear gaps and barriers to future economic development in the Central
Wisconsin region. The remainder of this chapter is devoted to a brief discussion of the major
gaps and barriers that we have identified.

Workforce

Future economic stability and growth in the county will depend on the availability of a skilled
workforce. While many area residents cite the local workforce as a strength, concerns about
potential worker shortages, brain drain, and the aging of that workforce were also viewed as
weaknesses and/or threats. The demographics discussed in Chapter II point to significant shifts in
the workforce age cohort. Currently, 40-44 is the largest age cohort in the region. However,
twenty years from now, 60-64 year-olds are projected to be the largest cohort. This is not
surprising, as the same people comprise both cohorts. Assuming the largest group remains in the
area, they will still be the largest group twenty years from now. The key is to balance the
population by continuing to attract younger, skilled workers to the region.

Geography and Market Limitations

Central Wisconsin’s geography is both a strength and a weakness. The county’s natural beauty
and distance from urban areas makes it an appealing place for rest, relaxation and outdoor



                                                                                                  57
recreational activities. Economic development in the tourism and hospitality industry relies on
these strengths. On the other hand, distance from major metropolitan markets, the limitation in
air linkages, and the limitation in geographic market scope are significant barriers to economic
development.

Infrastructure

Transportation and communications infrastructure are major concerns for future economic
development. Central Wisconsin must continue to embrace state of the art communication
technology, even in remote, rural areas, if it is going to attract and retain high-tech businesses,
and a younger workforce who will expect access to these amenities. Broadband Internet access
is a vital tool in many businesses that rely on the transmission of data and graphic files. Fiber
optic broadband networks are to the 21st Century what telephony and broadcast technologies
were to the 20th Century.

Increasingly, businesses rely on information inputs as much as they do raw material inputs. For
21st century businesses, fiber networks allow the transmission of data at 50 to 100 times the
speed of DSL or cable. Projects that use this technology should be studied in Central Wisconsin.

Seed Stage / Investment Capital

The Regional Stewardship Award-winning Northeastern Wisconsin (NEW) Economic
Opportunity Study highlighted the need to establish sources of seed capital for new business
expansion and startups. This is no less true for Central Wisconsin than it is in the Northeast.
Although there is some angel investing activity, seed capital for early stage equity investing is
not as plentiful as it could be.

The lack of seed capital is a gap in the assets needed to encourage new business startups and
business formation in the region.

So, what can we learn from the SWOT analysis and the data compiled for this study?

The SWOT analysis and the data compiled for this study form a good framework for thinking
about how the Central Wisconsin economy can grow to benefit its residents. The SWOT
analysis for Central Wisconsin has laid out strengths that come from the skills and intelligence of
its people, the existing economic base, the quality educational and health care systems, and the
geography of the region.

Many of the items cited as strengths are also identified as weaknesses or perceived as potential
threats. Geography, for example, is a strength because of the environment, recreational
opportunities, and natural beauty of the region. At the same time, the fact that the region is fairly
remote with respect to the state's major metropolitan areas means that markets are also limited by
geography and that distance to market and transportation of raw material and finished goods puts
the region at a competitive disadvantage. On the other hand, although distance from any
particular metro area is a concern, the region's central location in the state is a plus, inasmuch as
it places Central Wisconsin in a position to draw from several different markets.


                                                                                                    58
                        CHAPTER V:
        ECONOMIC OPPORTUNITIES AND RECOMMENDATIONS
Central Wisconsin is positioned to take advantage of a number of economic opportunities that
could build on the existing business base and transform the region. Each of the recommendations
explained below can be started and many can be accomplished in the next 3-5 years.

This chapter explains the economic opportunities that we see in Central Wisconsin. The next
chapter deals with strategies that can take these opportunities to the operational level. The final
chapter suggests implementation steps for a number of these recommendations and opportunities
to get something done in the near term.


Key Economic Opportunities and Recommendations:

1. Biofuels and Alternative Energy Production: Support and invest in research,
   technology transfer and businesses that will make Central Wisconsin a player in the
   alternative fuels/biofuels energy market.

The focus and energy of the federal government is finally reaching scale in the area of bioenergy.
A recent U.S. Department of Energy (DOE) press release announced a $250 million dollar
initiative in bioenergy to meet the goals of the Energy Policy Act of 2005 (EPAct). EPAct will
accelerate the demand for biofuels as follows:

       Four billion gallons of ethanol were produced this year, mainly from corn. EPAct
       requires that by 2012, at least 7.5 billion gallons per year of renewable fuel be blended
       into the nation’s fuel supply. To meet these goals, future biofuels production will require
       the use of more diverse feed stocks including cellulosic materials such as agricultural
       residues, grasses, and other inedible plants.

In addition to the market demand that will arise from the provisions of the EPAct, the State of
Wisconsin has passed legislation that requires that 10% of the state’s electrical power supply
must come from renewable energy sources’ by the year 2015. Currently, about 2% of the state’s
power supply comes from renewable energy.

As we compose this report, Governor Doyle has announced a $450 million Public, Private
Investment Strategy to Develop Renewable Energy. The aim of this program is to significantly
increase the role of renewable energy and decrease the state’s dependence on fossil fuels. This
program is proposed at a time when Central Wisconsin might include this in the implementation
of the strategic Economic Opportunity Plan.

Central Wisconsin is well positioned to take advantage of a growing demand for renewable
energy and fuels. Central Wisconsin has an abundant supply of renewable, natural materials such
as wood and agricultural products and residues that could be turned into biofuels. The most
interesting prospect for the region is the possibility of BioRefining as a value-added part of the
paper manufacturing process. In addition, the possibility of installing biodigesters at major dairy


                                                                                                 59
and large animal production lots holds possibility for the production of methane to be used to
generate electric power.

Central Wisconsin needs to position itself as a player in the alternative energy / biofuels sector
by declaring this area a major economic development priority, setting realistic goals, and
supporting and encouraging alternative energy grants, projects, and mainstream investments in
the alternative energy / biofuels sector.

2. Paper: Support and invest in value added products and processes that enhance and
   grow the existing world-class paper making assets and labor pool in the region.

The paper industry has gone through a long period of worldwide consolidation, overcapacity,
low profit margins, and product stagnation. We believe that the paper industry may be on the
edge of a new era in which the process of making paper will be reengineered to enable
BioRefining. In later parts of this report, we lay out the vision of BioRefining and the economics
that may revolutionize paper making and allow it to become a growth industry with far better
profit margins and job growth.

A second wave of technology involving nanotechnology also holds great promise for
revitalization and growth in the paper industry. Paper making is an old production process that
uses small pieces of natural material (e.g. wood fiber) to create paper, cardboard and other
products. Advances in nanotechnology hold the promise of producing value-added paper
products that would greatly extend the application and market for paper materials.

Wisconsin is the number one paper producing state in the country. Since losing the Paper
Chemistry Institute in the late 1980s, Wisconsin has not had a research and technology transfer
operation comparable to the Institute that feeds research and innovation into this important
industry.

3. Health Care: Build economic activity in medical research, medical education and
   training, regional health care delivery, medical supplies and medical
   software/bioinformatics.

The region is blessed with an abundance of high quality health care facilities and assets. The
regional health care cluster draws patients from a throughout the region, state, nation, and the
world.

The presence of a medical research base and a wide range of health care specialties provide
platforms for high end economic development to attract existing businesses and to incubate new
businesses. The intellectual property produced in research activities at the Marshfield Clinic and
at other medical research centers in the state provide a basis for high tech, start up companies




                                                                                                     60
4. Logistics: Build on the existing base and attract new businesses that further develop the
   strong logistics position of Central Wisconsin.

The central geographic location of the region, the presence of trucking companies, and the
convergence of Class I rail and Intestate and major state highways makes Central Wisconsin a
logical spot for distribution and logistics operations.

Logistics opportunities lie in at least three areas:

        •   The distribution of goods
        •   Logistics management and technology
        •   Intermodal operations

A major opportunity in the distribution of goods and intermodal logistics comes from the
connections and operations of the Canadian National Railway (CN). A recent article in the Wall
Street Journal (Front page, August 8, 2006) points out that the development of the little known
port of Prince Rupert, British Columbia will turn the port and the CN rail line between the Prince
Rupert and Chicago into what some see as the third largest link to Asia and Asia markets behind
only Los Angeles and Long Beach.

A second opportunity that may be available is in the area of logistics management and the
software and technologies connected with advance logistics management systems.

Finally, and already evident in the area, Central Wisconsin is simply a good geographic location
for distributing goods to major Midwest markets. The Harvard cluster study indicates that the
region is already well above the national average in terms of distribution of goods. The
opportunities to further expand this sector, especially with the convergence of highway and rail
in the region, is outlined in greater detail in the strategy and implementation chapters.

5. Agriculture and Food Processing: Build upon an already strong base in food processing
   and production of regionally grown crops such as potatoes, cranberries, and ginseng.

Central Wisconsin has a very strong base of agriculture and food processing. The long history of
successful dairy farming and vegetable crop production in the region has led to the formation of
a very important farming sector and a significant food processing industry.

Given the increasing link between agricultural production and alternative fuels (ethanol),
composite materials (ag based polymers, plastic/fiber composites), the agriculture sector will be
of increasing economic value and may be an important source of business development.

A number of food processing companies have emerged and grown in the region in the last
several decades. Niche food processors in area such as snack foods and specialty cheeses have
successfully expanded production and employment in the region.




                                                                                                61
While food processing is generally not a high growth business, there are a number of segments
of the agriculture, food processing, and food packaging industry that are growing faster than the
industry as a whole and these areas may be ideal for expansion and growth in the region.

6. Research: Support existing and seek new research companies, centers and projects
   that will enhance and increase research activity and make it a major economic driver
   in Central Wisconsin.

Central Wisconsin has a significant amount of research activity in various parts of the region.
Research activity in paper science, food processing, food safety, water quality, and medicine are
well established in the region. There is however no network that connects, supports, and
promotes these research enterprises.

The opportunity exists to further increase research activity and employment in the region. Soon
to be added to the research sector in the region is a U.S. Department of Agriculture research
center in Marshfield that will include a number of Ph.D. scientists focused on water quality and
food safety. This along with the medical research program at the Marshfield Clinic and paper
science research being done at UW-Stevens Point form an emerging critical mass of research
activity. This activity is in turn a source of new knowledge, products and ideas that can lead to
tech transfer to regional companies and the formation of new start up firms.

In the next two chapters we outline several strategies and steps that may enhance and expand the
research sector in Central Wisconsin.

7. New business development: Encourage and support the growth in the number of new
   regional business establishments.

The Central Wisconsin region lags behind most of the state in the rate of growth in new business
formation. County business patterns from 1998-2004 show little gain if any at all in Marathon,
Portage and Wood Counties. Marathon County ended with a loss of business establishments,
while Portage County was up by 3 establishments and Wood County had an overall gain of 19
establishments from 1998-2004. Outagamie County gained 440 business establishments in this
same time period. Small businesses are a major source of growth in jobs and form the base for
medium and large size businesses of tomorrow.

The region has several sources of management talent and new business ideas. The “offs”:
layoffs and spin-offs, offer two real opportunities to grow the number of business establishments.
Recent layoffs in the paper and other industries have provided a pool of former managers and
technical people who have or could form or run new businesses. For example, in Central
Wisconsin, a number of laid off process engineers have formed their own consulting firm that is
now serving a national clientele.

Spin-offs from existing businesses are also a possible source of new businesses.




                                                                                                62
Finally, the establishment of a “green” incubator which would house business that dealt with
renewable energy, energy saving products and forestry and environmental consulting was
suggested by one group in the community interviewing process. This idea may fit well with the
concept of making Central Wisconsin a place where green products and alternative energy are
important economic sectors.

8. Wood Products and Composites:

The natural resource base in Central Wisconsin and the existing business base that build their
products and services on the processing of wood and wood fiber are key sectors in the Central
Wisconsin economy. Like much of Wisconsin, the ability to make things (manufacturing) is
deeply rooted in this region. That knowledge and skill is a very valuable asset to the region and
can be used to further develop economic growth and wealth.

While BioRefining holds great promise for paper, nanotechnology and other advances in
material science hold great promise for cellulose and its byproducts. The use of cellulose fibers
to create nanocomposites has been recently documented by researchers at Virginia Tech and the
further application of cellulose and its elements to novel composites of materials is moving
forward at a good pace.

Given the combination of natural resources, experience with wood and paper manufacturing, the
new technologies related to cellulose that are emerging, there are substantial possibilities for
economic growth. Central Wisconsin is in a position to share in that growth and we suggest
ways to do that in the next two chapters.

9. Workforce Education and Training:

The central location of the region and the presence of workforce training programs at Mid-State
and Northcentral Technical Colleges present a major opportunity in expanding programs and
establishing businesses that deliver workforce education and training.

A particular opportunity in workforce development and training relates to the work force needs
of the paper industry and allied businesses. As the process of paper making gets more complex,
the skill and knowledge set needed by current and future workers also expands. The Wisconsin
Paper Council has weighed in on this topic and indicated the need for more advance training in
manufacturing. To that end, Mid-State Technical College has started a program in paper
manufacturing technology that offers training to prospective papermakers. As BioRefining and
nanotechnologies are incorporated into the papermaking process, the demand for training in
Central Wisconsin and in other papermaking regions of the state and nation will grow. In that
regard, there is an entrepreneurial opportunity to position Central Wisconsin to meet this need
and create good paying jobs in doing so.

Finally, the central location of the region is an advantage in providing workforce education and
training to the rest of the state. This central location should be exploited in establishing and
promoting the region as a center for workforce training.




                                                                                                63
10. Finance, Insurance, Real Estate (FIRE):

Central Wisconsin continues to be the home of a number of leading financial services
companies. The history of the insurance industry in this region goes back many decades. While
there have been periods of consolidation, this sector remains very important in the region.

The nationwide demand for financial services continues to grow as people manage an ever more
complex set of financial investments, credit cards and other financial instruments.

The opportunity to grow the existing FIRE sector and to encourage spin-offs and new business
starts matches a growing market for financial services. It also builds on a management and talent
base that is in the area.

11. Retirement Markets:

The Central Wisconsin Region has proportionally a larger cohort of older people and fewer
younger people when compared to the overall U.S. population. While age cohorts for the region
are currently comparable to those of the State of Wisconsin, population projections to the year
2030 indicate that percentage of people in the 65+ age cohort will grow faster than that of the
state or nation.

Kiplinger’s Washington Edition estimates that young empty nesters (age 55-64) in the U.S. will
grow by ten million in the period from 2005 to 2015. They further estimate that seniors (age 65
and over) will grow by ten million during the same time period.

As we showed in Chapter II, the overall population growth in Central Wisconsin is projected to
be quite modest in the next 20 years. However, the over 65 age cohort of the population should
increase dramatically. Figure V-1 below shows the dramatic projected increase in the 65+
population cohort. We believe that there is considerable market opportunity in the growth of the
65+ population and that planning for this change can build the quality of life and economic
vitality of the region.




                                                                                              64
Figure V-1 - Workforce, Retiree and School Age Cohort Projection for the
             Central Wisconsin Region – 2000-2030


            160,000
            140,000       Workforce (25-59)
            120,000
                                            School Age (0-24)
            100,000
              80,000
              60,000                                            Retirees (60+)
              40,000
              20,000
                   0
                        2000     2005      2010      2015       2020     2025    2030

                            Source: Wisconsin Department of Administration

The over 50 population in the county can be thought of as three separate markets. This
population can be segmented into three categories:

   1. Go-go’s: have a combination of health and income that allow an active life style and
      associated spending on homes, travel, health care and local services
   2. Slow-go’s: are limited by either health or income and are less active but mobile and
      require other types of goods and services
   3. No-go’s: are limited by health and/or income and are not very active, requiring more
      specialized and expensive services.

The following summarizes possible market opportunities in serving an aging population:

   1. There will be market opportunity in health care and assisted living services.
   2. There will be market opportunities related to a forming “Wellness” cluster.
   3. There is market potential in travel services, hobby related activities, and leisure activities
   4. There a potential market for professional services including financial and investment
      services, legal and tax services and other professional services.
   5. There will be a growing demand for transportation and home maintenance services to
      serve aging homeowners and residents.

Other Economic Opportunities:

The eleven economic opportunities we discuss in this chapter should not limit the thinking or
planning for economic development in the region. There are several other areas where economic
development is or could take place. For example, the region is experiencing a considerable
expansion in retail development particularly along the I-39 corridor. Some of this retail
expansion is attracting national chains that have not had a presence in Central Wisconsin.



                                                                                                  65
We also note some development in meeting and convention facilities again primarily around the
I-39 corridor. This takes advantage of the lack of large meeting spaces in the region and the
central geographic location.

Finally, there are visitor and tourism opportunities that are planned or underway that may
provide additional economic opportunities in the area.

It may be that specific opportunities in any of these or other areas will be so economically
compelling as to add them to the implementation plan and to make one or more of them a high
priority in implementation.

Priorities:

We believe that Centergy should concentrate on a handful of economic opportunities over the
next 1-3 years. Below we give our recommendation as to priorities:

   •   High priority – implement in the next 1-3 years

              1.   Bio Fuels and Alternative Energy Production
              2.   Paper
              3.   Health Care
              4.   Logistics
              5.   Agriculture and Food Processing

   •   Second level priority – implement in the second phase

              1. Research
              2. New Business Development
              3. Wood and Wood Composites

   •   Third level priority – implement in a third phase

              1. Workforce Education and Training
              2. Finance, Insurance, and Real Estate (FIRE)
              3. Retirement Markets




                                                                                               66
             CHAPTER VI: ECONOMIC STRATEGIES, TACTICS,
                          AND ACTION STEPS
The economic opportunities in Chapter V will simply be good ideas unless Centergy and the
economic development community in Central Wisconsin take action to implement some or all of
these ideas. To do that, the region needs to focus on key strategies that can be used to leverage
existing assets and attract new investment and energy into creating economic growth and good
paying jobs. A strategy is a long term plan of action to achieve a specific goal. Tactics are the
actual means used to carry out strategies and achieve goals. Action steps are the specific tasks
that help achieve goals.

We suggest the following strategies, tactics, and action steps that will focus time and talent in the
most productive way to implementing the recommendations in Chapter V:

Strategy 1: Make retention and growth of existing business, agriculture and natural
resource clusters the first order of business in economic development.

The first rule of economic development is to build on the businesses and clusters of businesses
already in the area. As we point out in Chapter V, the paper industry, the health care sector, and
agriculture and food processing are well established in the region and offer opportunity for
economic growth and good paying jobs.

Retention of these businesses should be a very high priority. Many of the regional Chambers
have active programs that try to assess the needs of existing businesses. This approach combines
with a strategy of regional pursuit of economic funding sources should be continued and
expanded.

Tactic 1A - Coordinate business retention activities in the region

Rationale: Many chambers and economic development corporations (EDCs) in the region
have business retention as a very high priority. Together, they can better collect
information from existing businesses and determine what needs can be met by local action
and what needs can be better met by regional action.

Action Steps:

           1. Ask the local Chambers and EDCs to meet and compile ongoing business
              retention programs and information.

           2. Design a regional business retention plan and project that can serve the region and
              the Chambers and EDCs. Such a plan would share retention information and
              strategies and employ a collective effort in business retention.




                                                                                                  67
Tactic 1B - Use cluster groups to support existing business clusters and to organize
information about gaps and needs.

Rationale: Business and industry clusters exist in Central Wisconsin and at least two
groups, the Heart of Wisconsin Business & Economic Alliance and the North Central
Wisconsin Workforce Development Board have ongoing cluster projects.

           3. Identify the existing cluster groups and seek to merge common cluster groups in
              the region. Build on the cluster group activity already underway at the Heart of
              Wisconsin Business & Economic Alliance and the North Central Wisconsin
              Workforce Development Board. Existing common or regional groups identified
              in the study include agriculture, paper and forestry, health care and transportation.

           4. Ask the Heart of Wisconsin Chamber and the North Central Wisconsin
              Workforce Development Board to lead an effort to identify and organize other
              possible regional cluster groups.

           5. Form a plan and regional agenda for each cluster group. Use that information to
              identify gaps and needs and to communicate and support those needs to federal
              and state agencies.

Strategy 2: Increase workforce productivity as a key means to retain and attract growing
businesses and seek to align the perspectives and relationships of the education community
(PK-12-College), workforce development organizations (largely the regional Workforce
Development Board and the Technical Colleges), and economic development interests (the
economic development professionals, Chambers, the regional planning commission, and
economic development corporations) to the workforce needs of the major employers and
emerging and growing businesses in the region.

As simple and obvious as this strategy may seem, we have yet to encounter a region in
Wisconsin or other states where there is a good alignment of these groups that is focused on the
economic development needs of a region. Communication among these groups is either non-
existent or sporadic.

To implement this strategy, a conscious effort must be made to establish a robust communication
pattern and to explore relationships based upon the self-interest of the groups involved. While
this latter point may strike some as crass, long-term involvement and sustainability of
commitment of these groups has to be based on mutual interest.

Tactic 2A – Seek to align the efforts of education, workforce development, and economic
development to the workforce needs of Central Wisconsin.

Rationale: The linkages among these three key groups either don’t exists or are not as
strong as they need to be to effectively support future workforce training and development
in the region.




                                                                                                68
Action Steps:

          6. Form a regional taskforce that includes education, economic development, and
             workforce development leaders. Ask this group to form an initial plan to align
             communication and information about the regional economy and regional
             workforce needs. Include in the plan specific information on skill and training
             needs by business cluster.

          7. Ask the regional workforce development taskforce to gather information on the
             learning skills and workforce/PK-12 alignment projects underway at CESA 1 and
             as part of the New North implementation plan.

Tactic 2B – Support innovative workforce development projects that increase the level of
skill and training in the workforce in Central Wisconsin.

Rationale: Innovative workforce projects help to meet gaps in workforce training and skill
needs and also establish the reputation that Central Wisconsin seeks to meet the needs of
its businesses.

Action Steps:

          8. Support Workforce Development Board grants that seek funding for innovative
             workforce training programs.

          9. Support innovative workforce training programs aimed at meeting the workforce
             needs of health care organization and manufacturers. A good example of an
             innovative program in the region is the new Paper and Technology associate
             degree program at Mid-State Technical College.


Tactic 2C – Support entrepreneurial workforce training businesses and programs in
Central Wisconsin.

Rationale: Making Central Wisconsin a leader in workforce training is good business in
many ways. By supporting the efforts of the Technical Colleges and entrepreneurs who
want to build businesses around workforce training, the region may become a hub for such
activity and new businesses may be formed and visitors drawn to the area.

Action Steps:

          10. Seek the leadership of the technical colleges, the workforce development board,
              and interested entrepreneurs to assess workforce training activity programs that
              might be expanded to increase the number of workers who come to Central
              Wisconsin for training.




                                                                                                 69
           11. Using the assessment described above, evaluate how new businesses might be
               formed to market training in Central Wisconsin and beyond. Consider how
               technical college workforce training programs might help create spin off
               workforce training businesses.

Tactic 2D – Support projects that retain or increase the supply of professional and
managerial workers in the region.

Rationale: Professional and managerial talent are critical to running high growth
companies. They are also often the source of new businesses in a region.

Action Steps:

           12. Establish an executive/professional career database that can be used to identify
               career opportunities for partners and spouses of individuals who have been
               recruited to work in Central Wisconsin.

           13. Use the executive/professional career database to bring home former residents of
               the region and to attract new talent to the area.

Strategy 3: Continue present efforts and expand those efforts to maintain and grow the
physical infrastructure in the region. In that regard, the following infrastructure areas
appear to be critical to the economic competitiveness of the Central Wisconsin region:

           •    Central Wisconsin Airport
           •    Road and Bridge Infrastructure and Improvement
           •    Power Generation and Transmission Infrastructure
           •    Class I Rail Lines
           •    Communication Infrastructure

The central geographic location of the region is a competitive advantage if the means of
transportation into, and out of the region are fast and efficient. Furthermore, this central
geographic location is leveraged by the convergence of several forms of surface and air
transportation, energy generation and transmission, and communication modalities.

At the heart of this competitive advantage is the infrastructure related to road, rail, air transport,
energy and communications. The region has done a good job of investing in these basic
infrastructures, and there are several on-going projects that will further improve that
infrastructure. Those projects include expansions in the area of roads and power infrastructure
and they will fully come on line in the next three years. This will add to the infrastructure assets
in the region that can support further economic growth and expansion.

While the region has good infrastructure for the most part, and the main task will be to maintain
that infrastructure, it is clear that limitations in air service and the capacity of the Central
Wisconsin Airport are becoming increasingly important to businesses in the region. Currently,
Marathon and Portage Counties contribute financial support to the regional airport. The entire


                                                                                                     70
region benefits from the service and economic contribution of the airport. A cooperative effort
with fiscal contributions by all three counties would help to move this agenda item along.

Tactic 3A – Organize to identify, track, and support key infrastructure projects in Central
Wisconsin.

Rationale: Central Wisconsin relies heavily on good roads, bridges, air linkages, rail,
power, and communications infrastructure to enable productive businesses and to support
a high quality of life. Central Wisconsin has a large land mass but relatively modest
population. It therefore needs to be highly focused on articulating the regional
infrastructure needs.

Action Steps:

           14. A regional infrastructure committee should be formed to identify, track, and
               support regional infrastructure projects, plans and needs.

           15. A regional plan should be developed to communicate those needs to
               transportation companies, state and federal regulators, and state and federal
               legislators.

           16. With respect to roads and bridges, a plan needs to be developed to support and
               communicate to the Wisconsin DOT at the state level on ongoing and planned
               bridge and road projects.

           17. With respect to Class I rail service, an ongoing regional dialogue with Canadian
               National Railroads should be established and concerns about service and the
               economic opportunities such as intermodal operations should be on the discussion
               agenda.

           18. With respect to air service, financial support from all three counties and
               expansion of the Central Wisconsin Regional Airport and service to that airport
               should be a high priority. This discussion should lead to a unified regional plan to
               support and expand air service to the region.

           19. With respect to power generation and transmission, there should be a clear
               identification of the power and transmission projects and the advantages that
               those projects give the region.

           20. With respect to telecommunications, a regional telecommunications plan should
               be prepared that identifies the strengths and gaps in telecommunications. Such a
               study should build on the recently completed telecommunication plans for
               Marshfield and Wisconsin Rapids.




                                                                                                  71
Tactic 3B – Leverage the current rail, road, power, telecommunications and power
infrastructure to create economic growth opportunities in Central Wisconsin.

Rationale: The central location of this region and the convergence of road, rail, power, air,
and telecommunications infrastructure provide a rich opportunity for economic
development.

Action Steps:

           21. Use the transportation cluster group identified in action step 3 to begin a
               discussion on the specific economic opportunities afforded by the infrastructure
               investments in Central Wisconsin.

           22. Explore the possible development of an intermodal operation that takes advantage
               of the new Asia to Midwest Canadian National link that runs right through the
               heart of the region.

           23. Consider linking logistics and intermodal opportunities in the region with Foreign
               Trade Zones (FTZ) in Milwaukee, Madison, or Green Bay. FTZs offer some
               financial advantages that may be of particular benefit to regions that host
               manufacturing and logistics operations.

Strategy 4: Position Central Wisconsin as the hub of research and innovative thinking in
alternative energy, logistics, and paper/forest products and manufacturing processes.
Connect the existing research activities in the region to encourage the sharing of
knowledge, joint projects, and support for additional research enterprises.

Wisconsin is the number one paper making state in the U.S. Wisconsin has a natural resource
base in forest products and a position as a national leader in that sector as well. Central
Wisconsin is home to a substantial part of the papermaking and forest products business in the
state.

Despite its high rankings in these areas, no region of Wisconsin has really claimed the high
ground of research and development in these sectors. The state possesses a national center on
forest product research but this seems loosely connected to the industries in the state. The
national center for paper research, what was known as the Paper Chemistry Institute, has moved
to Georgia.

Some efforts have been made to establish a greater research presence in the number one paper
making state (notably a center in Green Bay), but a critical mass of research has not emerged
anywhere in the state. In this regard, we believe that the Paper Science and Engineering Program
at UW-Stevens Point, the research and applied technology work of its faculty and staff, and its
pilot machines and labs provide a solid base for establishing a center of excellence in paper
research and innovation in Central Wisconsin. We believe that Central Wisconsin could become
a center for paper technology and innovation. To that end we suggest possible implementation
steps in the next chapter.



                                                                                                  72
Tactic 4A – Inventory the research activity now underway in the region and create a
network that allows current researchers to share knowledge and common interests.

Rationale: In the course of this study, we found a surprising amount of research activity
and research infrastructure. We also found very good regional connections to state and
national research resources.

Action Steps:

           24. Inventory the research programs, research assets and infrastructure, and research
               connections. Communicate this information to help inform the region about these
               assets.

           25. Form a Central Wisconsin Research Alliance to network researchers in the region,
               to increase technology transfer to regional businesses, and to promote research as
               an economic enterprise in the region.

Tactic 4B – Make Central Wisconsin a national center for research in paper
manufacturing, BioRefining connected to paper manufacturing, and innovative paper
products.

Rationale: Wisconsin, the number one paper producing state in the nation, does not have a
nationally ranked program in paper research and technology. The region possesses a
major research asset in the fully operational pilot paper machine at UW-Stevens Point.

Action Steps:

           26. Support and build on the Paper Science and Engineering program at UW Stevens
               Point. This program has an existing base of support but needs greater support to
               emerge as a major center of applied paper and paper technology research.

           27. Develop a program to educate students and the general public about BioRefining,
               nanotechnology, and their roles in the future of the paper and alternative
               energy/fuels industries.

Strategy 5: Work to raise the educational attainment of current workers and potential
workers in Central Wisconsin.

In a global economy, the workforce will be the key ingredient to remaining competitive.
Wisconsin and Central Wisconsin face substantial challenges in keeping the workforce globally
competitive. The overall level of educational attainment in Central Wisconsin is average at best
and will need to be improved considerably in the years ahead. Central Wisconsin has important
higher education assets, including the UW-Stevens Point, UW-Marathon County, UW-
Marshfield, Mid-State Technical College, and Northcentral Wisconsin Technical College. These
institutions will be key assets in moving the regional educational attainment agenda forward.




                                                                                              73
Educational attainment at the high school and post secondary level must be a major focus of
Centergy and economic development efforts in Central Wisconsin. In that regard, concrete
programs to educate teachers, parents, and students about the changing economy and the
changing nature of work must be a high priority in the region.

As we pointed out in Chapter I, a key relationship that has emerged in the New Economy is the
link between brain power as represented by education level and earning power. There is a direct
relationship between the level of education and income level. Figure I-2 shows what has
happened to the earning power of high school and college graduates over a twenty-five year
period. The data shown is in constant dollars (no need to factor in inflation) and the gap between
the annual earnings of a high school grad and a college grad has increased from $12,683 in 1978
to $23,291 in 2003. Over a lifetime of earnings, that gap amounts to about $1,000,000. In short,
markets in the New Economy reward education and skills. For Central Wisconsin and
Wisconsin in general to be competitive in the new, global economy, education level is a key.

Figure VI-1 – The link between education level and earnings

                                                                               Difference
                                       Income
Education                                                             (High School vs. Other Degree)
                              1978                  2003                  1978              2003
High School                  $22,856               $27,915                 n/a                    n/a
Bachelors                    $35,539               $51,206               $12,683                $23,291
Masters                      $46,885               $74,602               $24,029                $46,687
Source: U.S. Census Bureau

In order to improve future per capita income levels in Central Wisconsin, the level of educational
attainment must be increased. An essential part of this strategy will be creating partnerships with
private business, PK-12 schools, technical colleges, the North Central Wisconsin Workforce
Development Board, and university campuses. These partnerships should focus on educating
teachers and staff to the changes in the global and regional economy and educating students on
the 21st century learning skills they will need to prosper in the New Economy.4

Tactic 5A – Make raising educational attainment a high priority throughout Central
Wisconsin.

Rationale: The link between more education and higher earning power is well proven. To
increase income levels in Central Wisconsin, raising educational attainment must be a high
priority.

Action Steps:

            28. Make raising educational attainment the number one goal of Centergy and
                encourage other economic development entities to do the same.


4
  The North Central Wisconsin Workforce Development Board currently has a business and education partnership
involving five partners.


                                                                                                           74
          29. Put together an educational program for students and the general public that
              explains the new economy and the link between education and earning power.
          30. Create a New Economy program with education, internships, and fellowships for
              teachers and administrators in all levels of education.

          31. Study the plans of the education taskforce of New North and the 21st Century
              Learning Project of CESA #1 for ideas on linking education, careers and regional
              business clusters.


Tactic 5B – Assess the gaps in training and degree programs available to Central
Wisconsin residents and create a post secondary education plan for the region.

Rationale: Access to post secondary educational programs is a key link to improving
educational attainment in the region.

Action Steps:

          32. Form a post secondary education task force that includes PK-12 representatives.

          33. Create an inventory of the post secondary education programs in the region and
              the gaps in programming that need to be filled.

          34. Put together a post secondary education plan that can be used in advocating for
              support of existing educational programs and funding for additional training and
              degree programs. As part of that plan, include plans to serve the non-traditional
              students, particularly the existing workforce.

          35. Communicate the post secondary education plan to students, the general public,
              and legislators.

Strategy 6: Continue to develop and expand the sources of risk capital in the region and
network those sources to the rest of the state and the Midwest region. In the near term,
focus on the following:

          •     Establishing a regional angel investment network
          •     Exploring the formation of a regional community equity and debt capital
                fund.

Technology, entrepreneurship, and risk capital are key parts of the formula for creating high
growth in areas such as the Research Triangle, the Silicon Valley, and closer to home, in Dane
County, Wisconsin. Central Wisconsin has been fortunate to have two angel investing groups in
the region that have invested in early stage companies.




                                                                                               75
These early efforts need to be expanded and the region needs to explore the expansion of angel
investing capacity and the creation of a regional community risk capital fund to expand the risk
capital available in the region.
The presence of angel and community risk capital groups has the effect of changing the thinking
about risk taking and investment. In the late 1800s and early 1900s, Central Wisconsin like
much of Wisconsin was built by entrepreneurs who risked their financial fortunes on building the
paper, lumber, and manufacturing industries that made the state prosper. We were successful as
entrepreneurs and large companies were built and for a number of generations it made economic
sense to work for large companies.

With globalization of the economy, the need for entrepreneurial activity has reemerged. We need
new companies to replace those that have been acquired, failed, or been downsized. Thus the
entrepreneurial climate of the state needs to change to encourage new businesses. In the New
Economy, risk, rapid change, and failure are standard components of success. Angel and
community capital groups help to change the thinking about risk taking and are key to changing
the business and investment climate.

Tactic 6A – Encourage and support a regional approach to angel investing and to
community loan and equity funds.

Rationale: A clear gap in the Wisconsin economy is the lack of sufficient angel and venture
capital to fund new and expanding enterprises. Central Wisconsin has the advantage of
being the home base for 2 of the 13 active angel groups in the state. In order to leverage
that advantage and create larger pools of capital capable of funding larger projects or
sustaining funding on start-up companies, regional capital pools need to be created.

Action Steps:

           36. With respect to angel capital, continue to develop the concept of a Central
               Wisconsin regional angel fund currently being formed as Centergy Investment
               Partners, Inc.

           37. Inventory the region’s community based loan funds and create a directory of these
               capital sources for existing and new businesses.

           38. Explore the possibility of combining existing loan funds to create a larger regional
               capital pool.

Strategy 7: Increase the amount and pace of technology transfer to regional businesses by
forming a technology transfer process that can readily access and connect the sources of
new ideas and technology developed in the region, in the state, in the country, and in the
world to existing and emerging businesses in Central Wisconsin.

A high growth economy needs to be connected to sources of new technology and processes.
Regular forums that identify and educate people about new technology such as the MIT forums




                                                                                                76
and the Wisconsin Innovation Network (WIN) are examples of ways to encourage more
technology transfer in a region.

Central Wisconsin needs to establish a strategy that uncovers relevant technologies for existing
businesses, takes research produced in the region to market, and provides a channel of ideas and
products that can feed new business start ups.

Tactic 7A – Establish and implement a technology transfer plan to identify key
technologies used and needed by regional business and to increase technology transfer to
the area to support existing businesses and new business start-ups.

Rationale: Technology is a prime driver in the New Economy. Accessing technology and
supporting the transfer of technology to regional businesses keeps them competitive and
growing.

Action Steps:

           39. Create a technology transfer group or task force to assess the key technologies
               that are in use or are needed by regional businesses.

           40. Build connections and networks with sources of new technology in the region and
               in the state. Include organizations such as the Marshfield Clinic, the U.S Forest
               Products Laboratory, the U.S. Department of Agriculture, the Wisconsin Alumni
               Research Foundation and its subsidiary WiSys, and the UW Madison College of
               Agriculture and Life Sciences. Sponsor an annual conference that brings these
               sources of technology transfer in contact with regional businesses and
               entrepreneurs.

           41. Use organizations such as the regional Wisconsin Innovation Network Chapter to
               highlight new technologies and new companies and new products that use
               technology.

           42. Consider jump starting the technology transfer process by partnering with the
               Center for Advanced Technology Transfer (CATI) located in southeast Wisconsin
               and Clean Technologies Inc., an organization that funds alternative energy
               projects statewide.

           43. Create a business and public education program that educates and illustrates to the
               general public how technology transfer is done and the economic potential of
               effective technology transfer.


Strategy 8: Further develop the Central Wisconsin regional brand (Centergy) and regional
thinking and action by educating and promoting Centergy and Central Wisconsin to
internal audiences within the region and then to external audiences in other regions of the
state.



                                                                                                 77
Recent region economic planning efforts have illustrated the importance of regional branding
initiatives. From the “Milwaukee 7” to the “New North”, these branding initiatives have been
used to establish regional identity and to provide a banner for further regional economic
development programs.

Unlike most of the regional economic opportunity projects we have worked on, Central
Wisconsin had a brand in Centergy and a regional economic development group before our study
began. This brand helps to identify the organization and the region. In the course of our study,
many people said they were familiar with the name. However most people in Central Wisconsin
didn’t know much about Centergy as an organization, or Centergy as a brand.

The first order of business or strategy should be to educate the regional population on Centergy,
its mission, the brand, and now the Economic Opportunity Plan. Thereafter, or perhaps
concurrent with that effort, the Centergy brand and organization needs to get statewide exposure
so that it is recognized in the same breath as “New North’ and the “Milwaukee 7”.

Tactic 8A – Continue to develop the Centergy brand as a way to stake out a regional brand
and identity.

Rationale: While many people in the region that we contacted for this study had heard of
Centergy, they knew little about the organization and the brand concept. Most people that
we contacted outside of the region had little knowledge about the brand.

Action Steps:

           44. Create an internal Centergy publicity and education campaign aimed at informing
               the Central Wisconsin regional audience about the Centergy brand and regional
               concepts associated with Centergy Inc.

           45. Create an external Centergy publicity and education campaign aimed at informing
               external audiences such as other regional groups (New North, Grow North, and
               Milwaukee 7), state agencies, federal agencies and foundations about the
               Centergy brand and regional concepts associated with Centergy Inc.


           46. Leverage and expand the regional planning and action concept by selectively
               working on projects of mutual interest with the New North group in northeastern
               Wisconsin and other regional groups such as Grow North that present
               opportunities of mutual interest.

           47. Create projects, meetings and events that regularly demonstrate that Central
               Wisconsin is and acts as a region and communicate the success of those events to
               the public.




                                                                                               78
           48. Form a group to look at how the arts and tourist attractions can be supported and
               marketed on a regional basis to attract visitors and provide the high quality of life
               in the region.

Strategy 9: Further improve the Central Wisconsin business climate to encourage
economic growth and the establishment of new businesses in the region.

The State of Wisconsin lags behind 45 other states in the formation of new businesses. Central
Wisconsin lags behind the State of Wisconsin and several other regions of the state in the
formation of new businesses. New business formation is critical to building fast growing
business. New and small businesses are the major source of job growth nationally and are the
business base of the future.

Central Wisconsin must develop a new business formation strategy that more nearly matches the
average rate of business formation in then U. S. Such a strategy could build on the presence of
risk capital and the existing pool of entrepreneurs in the region.

Tactic 9A – Coordinate business support services for new and expanding businesses and
create an information source that informs businesses and entrepreneurs about access to
these services and to available financing.

Rationale: There are many services available to entrepreneurs, farmers, and existing
businesses available in the region or state. Unfortunately as a recent state audit revealed,
there is little coordination of those services and programs. Central Wisconsin should take
the lead in this area and create a regional service network and directory that educates and
provides access to business support services. It should further establish clear linkages to
sources of equity and debt capital for new and expanding businesses.

Action Steps:

           49. Form a task force of business service users and providers to inventory the
               business support programs in Central Wisconsin and at the state level.

           50. Create a common pathway to business support service that can be used by
               existing businesses and people seeking to start new businesses.

           51. Consider sponsoring a regional business plan contest to encourage entrepreneurs
               to form new businesses.

Tactic 9B – Take direct action to attract and finance new businesses and the expansion of
existing, high growth businesses. To that end, work to improve deal flow in the area that
leads to attracting entrepreneurs to Central Wisconsin.

Rationale: Central Wisconsin needs to jump start the growth of new businesses. The
region needs to establish new businesses to replace those that leave and to generate regional
growth.



                                                                                                 79
Action Steps:

           52. Sponsor a regional business plan contest with a substantial cash prize to
               encourage entrepreneurs to form new businesses.

           53. Explore the establishment of a “green” incubator that would house manufacturing
               and service businesses that are environmentally oriented.

           54. Contact and seek to attract businesses that finish in the top ten in the Governor’s
               business plan contest.

           55. Improve deal flow that could lead to new businesses in Central Wisconsin by
               using the Wisconsin Angel Network’s deal pipeline utility.

           56. Support, publicize, and expand the entrepreneurial education courses offered by
               several chambers and economic development corporations in the region.

           57. Explore the feasibility of expanding, creating or attracting logistics management
               companies to the region.

           58. Action step 11 from strategy 2- Evaluate how new businesses might be formed to
               market training in Central Wisconsin and beyond. Consider how technical college
               workforce training programs might help create spin off workforce training
               businesses.

Strategy 10: Establish an organized regional approach to seeking state, federal and private
economic development and grant funding for initiatives that come from this study and for
ongoing and other projects aimed at improving the regional economy.

While there have been some projects that have won the support of state or federal funding (in the
latter case a very successful record of congressional earmarks), we believe that a coordinated
regional approach to the U.S. Economic Development Administration (EDA) and state agencies
such as the Department of Commerce and the Department of Agriculture would improve the
visibility of the region and enhance success in getting more projects funded.

We recommend using this report as the foundation for a case statement that lays out the regional
vision for improving the regional economy and that can be the common message heard by state
and federal agencies and officials.

Tactic 10A – Use a regional approach to identify funding opportunities and regionally
support funding requests for local communities, counties and regional agencies.

Rationale: Central Wisconsin needs to take a regional approach to funding as it competes
with much larger regions for limited government and foundation funding.




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Action Steps:

          59. Identify funding sources and a funding plan to support the implementation of the
              Central Wisconsin Economic Opportunity Plan.

          60. Form a regional group that will take funding opportunities to the next level of
              writing proposals and lobbying government agencies.




                                                                                                81
82
                        CHAPTER VII:
        IMPLEMENTATION, ORGANIZATION, PLANS AND STEPS
In this chapter, we suggest implementation plans and action steps that involve the economic
opportunities and strategies discussed in Chapter V and VI. To successfully implement this plan,
we think that there must be thought given to an organizational structure that can organize, staff,
and finance the resources needed to accomplish the goals in the Economic Opportunity Study.

On the pages that follow, we have outlined our thinking about how to organize and implement
the recommendations in this report. We start out with the premise that implementation is already
underway in the form of initiatives and programs of existing groups in Central Wisconsin. We
may have overlooked some of these efforts and they will need to be incorporated into this
implementation proposal.

In the end, the people in Central Wisconsin should shape the implementation and the setting of
goals and priorities. As consultants, we can suggest recommendations and organizational
direction but the regional community must deal with the practical problem of designing a
practical implementation scheme.

A Few Comments on the Overall Organization

Study Implementation Infrastructure

It is our experience that an economic opportunity plan requires an organization devoted to
implementing recommendations and strategies. A partnership, committee or similar structure
that can implement the plan over a three to five year period will help to insure that positive
results flow from this planning effort. At this point, it appears to us that the most logical
organization to coordinate the implementation of this study is Centergy with an expanded
Centergy Board. Private sector leadership of this effort is very important. It is also important
that members of the implementation group be committed to staying with the plan over a period
of years to help transition through changes in the local leadership.

Action Steps:

           61. Expand the Centergy board to include representation for workforce development,
               education, regional planning and technical and scientific experts. Work to
               increase the number of private sector leaders on the Centergy Board.

           62. Form an Implementation Group or Taskforce within Centergy that will work to
               implement the Economic Opportunities Plan over the next 3-5 years. Business
               participation and leadership on this committee will be essential.

           63. Discuss staffing needs, budget, and opportunities with the North central Regional
               Planning Commission and UW Stevens Point. Each organization has indicated
               support for this project and the possibility of providing general and technical
               support.


                                                                                                   83
          64. Draw on the human capital (brain power base) in the region and look to the
              University of Wisconsin Stevens point and other area higher education institutions
              for paid and unpaid internships that can help staff the implementation and fund
              raising for implementation.

          65. Create an organizational structure that serves to support implementation and
              groups that may be formed to carry out implementation.

          66. Continue to support the formation of cluster groups and merge the existing
              separate cluster groups in paper and forest products and transportation that are
              already in place in Central Wisconsin.

Below we show an overview of a possible organization plan to begin to carry out the
implementation of the Central Wisconsin Economic Opportunity Study. The boxes below the
Centergy organization represent committees and taskforces that might be formed to implement
strategies and recommendations in the study. These organizational elements may have limited
lives or they may end up as ongoing parts of Centergy.

The organization diagram below is one way to think about implementation but we recognize that
other considerations may require a different organizational scheme. We note that the
Government Relations committee and the Marketing & Communications committee are existing
operating committees of Centergy. In this organizational structure, these two committees would
serve all of the committees and organizations formed to implement the plan.




                                                                                                 84
Group / Organization                          Infrastructure



Goals                  Continue efforts to build and maintain the road, bridge, rail
                       infrastructure in Central Wisconsin
                       Work to improve and build up infrastructure such as air service,
                       airport capacity, and energy transmission grids

Projects               Central Wisconsin Infrastructure Agenda

Steps                  Form infrastructure committee or task force
                       Create an infrastructure agenda for Central Wisconsin
                       Maintain regular contact with the Wisconsin DOT at the state level
                       in support of existing and planned highway and bridge projects
                       Engage Wisconsin DOT in exploring infrastructure needs and
                       educate DOT on the Central Wisconsin economic plan

Leadership             Chambers of Commerce
                       Private industry - rail, tracking, warehousing
                       Public officials
                       North Central Wisconsin Regional Planning Commission




                                                                                            85
Group / Organization                            Education



Goals                  Increase regional educational attainment
                       Educate students and the public on the changing New Economy
                       and the changing nature of work
                       Educate teachers and staff on the changing global and regional
                       economy, occupational changes and 21st century learning skills

Projects               Public education / communication initiative

Steps                  Form the group
                       Learn about and explore the 21st Century Learning Program
                       being implemented by CESA 1

Leadership             The University
                       PK-12
                       Technical colleges
                       Workforce Development Boards
                       Private industry




                                                                                        86
Group / Organization                  Research & Tech. Transfer



Goals                  Identify and network existing research activity in Central WI
                       Form a Central Wisconsin Research Consortium
                       Support expansion of existing research centers and programs
                       Attract new research activities to Central Wisconsin
                       Improve tech transfer to regional businesses

Projects               Central Wisconsin Research Consortium / Network
                       Central Wisconsin Technology Transfer Project

Steps                  Explore establishing a CW research network
                         - Meeting
                         - Agenda for years 1,2,3

                       Meet with CATI head Matt Wagner to explore using CATI to
                       jump start tech. transfer

Leadership             Hancock Ag Research Station
                       UW Stevens Point
                       Marshfield Clinic




                                                                                       87
Group / Organization                           Risk Capital



Goals                  Increase the risk capital capacity in Central Wisconsin

Projects               Regional Angel Network
                          -   Explore establishing a regional angel investing network
                       Community Capital Fund
                         - Explore establishing a regional community capital fund

Steps                  Ongoing - Regional Angel Network discussion

Leadership             Centergy;
                       Active angel groups in Marshfield and Stevens Point;

                       Department of Financial Institutions; Wisconsin Angel Network
                       (WAN)

                       North Central Regional Planning Commission




                                                                                        88
Group / Organization                        Entrepreneurship



Goals                  Increase the rate of formation of new businesses in Central WI

Projects               Business services inventory
                       Central Wisconsin business resource website / center
                       Central Wisconsin Business Plan Contest

Steps                  From Central Wisconsin Entrepreneurship Council
                       (or Task Force)
                       Seek Department of Commerce grant funding
                       Explore the resources and a relationship with the Kaufmann
                       Foundation

Leadership             UWSP SBDC
                       UW Extension
                       Chambers of Commerce
                       Private sector – banks; real estate developers; entrepreneurs;




                                                                                        89
Group / Organization                             Clusters



Goals                  Organize industry groups for major clusters in Central Wisconsin
                       Use the cluster organization to determine gaps and needs

Projects               Central Wisconsin Business and Agriculture Clusters

Steps                  Identify existing and emerging clusters in Central Wisconsin
                       Seek information, advice, and leadership from existing cluster
                       work at the Heart of Wisconsin Business & Economic Alliance
                       and the North Central Wisconsin Workforce Development Board
                       Form up cluster interest groups
                       Form a regional arts and tourism group

Leadership             North Central Wisconsin Workforce Development Board
                       Heart of Wisconsin Business & Economic Alliance
                       North Central Regional Planning Commission




                                                                                          90
Group / Organization                            Workforce



Goals                  To maintain and improve the productivity of the workforce in
                       Central Wisconsin
                       To position Central Wisconsin as a center of workforce
                       development services and businesses

Projects               Workforce Development Needs, Gaps and Resources
                       Workforce Development Entrepreneurship Project

Steps                  Form workforce development committee or task force
                       Inventory workforce development programs and businesses
                       Seek information, advice and leadership from the Workforce
                       Development Board, the technical colleges and private industry.

Leadership             North Central Wisconsin Workforce Development Board
                       Mid-State and North Central Technical Colleges
                       Private industry - HR directors at major employers




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