More mergers, fewer startups. Not a good combo in US or WIsconsin

Yesterday, John Oliver’s in-depth segment “Last Week Tonight” dealt with something that we hear about in many fashions these days- corporate mergers. Oliver’s segment pointed out that from airlines, to beermaking, to casket makers(!), a diminishing number of large firms are cornering our markets. And that results in higher fees when you fly, less choices for consumers, and more money flowing to Wall Street instead of Main Street (as usual with Oliver's show, language may be NSFW).

You may well be angry with the service you get from airlines, but thanks to consolidation, they don't really need to give a shit about what you think." - John Oliver

Wisconsin is not immune from this 2010s trend. For example, in the next 2 weeks we will see how many PDQ stores end up closing and/or removing employees out of “efficiency” as their stores turn in to Kwik Trips. In addition, several Gordy’s Food Stores in the state have either folded and/or been converted to Festival Foods in recent months, and you can probably think of other industries in your town that have a smaller variety of outlets than it did in the past.

In a similar vein, UW-Madison grad student Ken Smith attended the panels on the Wisconsin’s economy at the first annual Ideas Fest on the UW campus, and filed this report in Urban Milwaukee regarding what executives and politicians were saying were the keys to get the state’s stagnant economy moving ahead. A common trend that came up in the sessions Smith attended involved the state’s horrible record at having new businesses start up, along with the state’s inability to attract and keep talent.

A majority of speakers in both panels spoke favorably regarding education and improving statewide entrepreneurialism through policy and investment endeavors. All panelists generally agreed the future of Wisconsin’s economy requires workers to have at least a two-year degree from a technical college or a four-year bachelor’s degree. “Wisconsin needs an educated workforce and research infrastructure, whether making things or selling ideas. It’s not just about education, classrooms, and students. It’s also about research,” [UW Chancellor Rebecca] Blank emphasized. In the subsequent panel, Kathleen Gallagher of the local tech-oriented nonprofit Milwaukee Institute, echoed a similar sentiment. “UW-Madison is ranked 11th nationally in computer science, we need to keep it there or bolster it,” she said.…

“I can’t find enough people in Eau Claire,” said [JAMF Software Founder Zach] Halmstad. JAMF, a developer of Apple software products, began in Eau Claire and while maintaining its Eau Claire operation, has moved its headquarters to Minneapolis. It is multinational and has additional offices in Cupertino, California; Amsterdam, Hong Kong, Sydney, and Katowice, Poland.

To bolster Wisconsin’s strengths, Joy Tang, urged Wisconsin companies enhance tech-based research and development. “Every big industry can create its own innovation center, there needs to be more innovation labs around big entities,” she stressed. Tang is the co-founder and CEO of the fashion app Markable, which began in Madison but now has a larger presence in New York City.

Kevin Conroy, Chairman and CEO of Madison-based Exact Sciences a developer and manufacturer of colon cancer screening tests, was critical of Wisconsin’s political climate. Conroy accused the state’s leadership of ‘starving’ state entrepreneurs of access to investment dollars. “Developing an economy isn’t really that complicated, but it’s hard. If you want job growth, all job growth comes from entrepreneurship, from young companies,” rather than giving tax breaks to legacy companies.

Conroy argued the state was investing in the wrong things and was critical of the state’s deal with Taiwanese electronics manufacturer Foxconn. “The notion of spending $3 billion on Foxconn is maddening. It’s as if Barnum and Bailey took over the capitol. There really isn’t money for the entrepreneurs, and we really have to change that.”

Conroy nails the problem at the end of that passage. Our GOP-run state government has devalued education and entrepreneurship in favor of taxpayer-funded kickbacks to established corporations who have donated to them. It’s a strategy that might grab a headline or two to fool a few rubes and help the war chest for election season, but it does nothing to help the overall state economy (and likely limits it long-term due to the lack of start-ups).

You can see where a situation when having a few individuals have outsized influence on an economy and its politics are leading to really bad things for 99% of the rest of us, whether that’s in higher prices for products, a limited range of options for consumers, a degraded environment, and slower growth that doesn’t reach the vast majority of us. And unless we change leadership to include a group of people that care more about the big picture over big money and consolidating power, it won’t get better for almost all of us.