CELEBRATING WISCONSIN ENTREPRENEUR(TM): LESSONS LEARNED FROM WISCONSIN ENTREPRENEURS AND BUSINESSES, AND FUTURE PROSPECTS FOR A HEALTHTECH SECTOR THAT IS DRIVING HEALTHCARE REFORM.

Author:Sem, Daniel S.
 
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  1. INTRODUCTION II. WISCONSIN'S ENTREPRENEURIAL ECOSYSTEM A. Beyond Beer and Cheese: Major Industries and Exports B. Celebrating Wisconsin Entrepreneurs C. Measuring Entrepreneurialism in Wisconsin: National Ranking D. Challenges Facing the Wisconsin Entrepreneurial Ecosystem 1. Midwestern Culture 2. Decreasing Immigrant Population 3. Low Unemployment 4. More of a Manufacturing and Less of a Technology- Innovation Culture 5. Lack of Access to Capital. E. Opportunities: Resources and Initiatives to Grow the Ecosystem F. Wisconsin Law--Legislation to Encourage Investment in Wisconsin Startups G. Future Growth Opportunities-Spotlight on Healthcare HealthTech III. CHALLENGES AND OPPORTUNITIES FOR THE HEALTHTECH INDUSTRY IN WISCONSIN A. Wisconsin's Rich History of Healthcare and HealthTech Innovation B. HealthTech Startups and the Entrepreneurial Ecosystem Southeast Wisconsin C. The Major Challenge Facing the Healthcare Industry United States is Cost and Access D. Healthcare Access Challenges for the Poor-Universal via Emergency Rooms? E. Healthcare Access Challenges for the Poor-A HealthTech Solution F. Healthcare Solutions: Transparent Pricing, Medical Bundling G. Enabling HealthTech Technology: Consumerizing Healthcare H. Barriers to Healthcare Reform and Consumerization IV. HEALTHTECH-ENABLED HEALTHCARE REFORM: A ROADMAP FOR THE UNITED STATES A. Learning from Best Practices in the Rest of the World B. Proposal for a HealthTech-enabled Hybrid and Tiered Healthcare System in the United States C. The Remedium eXchange (Rx) Think Tank-Helping Consumerize Healthcare CONCLUSION I. INTRODUCTION

    Wisconsin has a rich history of entrepreneurial activity, which is often not appreciated beyond its well-recognized strength in the beer and cheese industries. However, Wisconsin's entrepreneurial nature has been called into question. Recently, Wisconsin was ranked fiftieth in the united States for startup activity by the Kauffman Foundation. (1) In contrast, Wisconsin ranks at the top of the country for startups that are local and established business with more longevity. (2) The first half of this article will review some of the challenges and opportunities that have faced Wisconsin entrepreneurs, and will provide an overview of over 150 Wisconsin companies (Table 1), with lessons learned from the entrepreneurial journeys taken by their founders. Multiple industry sectors will be reviewed, including food and beverage, manufacturing, biotechnology and healthcare. Resources (legal, regulatory, mentoring, seed funds) that are being created to improve Wisconsin's entrepreneurial ecosystem will also be presented.

    The second half of the article will provide a deeper and forward-looking analysis of one industry sector, HealthTech (Table 2), which has significant growth potential, and potential to positively impact healthcare reform. However, the HealthTech industry also faces political, legal, regulatory, and business challenges that could block its growth--a growth that has potential to positively impact the healthcare industry. The history of the healthcare and HealthTech industry in Wisconsin will be reviewed, followed by a summary of the current status and a look forward for the industry. The status of healthcare in the United States, with its high cost and poor access, will be discussed in the context of the current political debate. It will be argued that this political debate is focused more on who is covered than on how to constrain cost and increase quality, and it does not provide a useful discussion of the relative value (and current implementation) of single payer versus competitive markets as a way to control cost and increase quality. A case will be presented that Wisconsin's HealthTech entrepreneurs could provide lower cost and higher quality healthcare, via technology-enabled consumerization of care. Still, challenges exist that relate to privacy issues and barriers to market entry, which may extend beyond intellectual property-based monopoly-power (intended to foster innovation) into the realm of anti-competitive business practices that hinder market-driven improvements in healthcare delivery (e.g., consumer-driven value-based shopping; usage of medical centers of excellence; consumercentric integrated care). The promise of HealthTech-based consumerization tools that empower and educate consumers at the front-line of healthcare to provide higher quality care at lower cost is presented, along with the legal and regulatory challenges that may need to be addressed for HealthTech entrepreneurs to succeed in this goal.

  2. WISCONSIN'S ENTREPRENEURIAL ECOSYSTEM

    An entrepreneurial ecosystem can be defined as a core element of an economic development strategy that focuses on fostering entrepreneurship. (3) This could include the people, the supporting institutions and resources, as well as the culture and values of a region. This article begins by providing a historical overview of Wisconsin's entrepreneurial ecosystem and of the Wisconsin entrepreneur. (4)

    1. Beyond Beer and Cheese: Major Industries and Exports

      As is well-known, Wisconsin's entrepreneurial successes include producing cheese and brewing beer. While these industries are an important aspect of its economy, Wisconsin's largest industries are finance, insurance, real estate, and rental and leasing according to the Bureau of Economic Analysis ("BEA"). (5) Wisconsin has a rich entrepreneurial history and is home to many well-recognized domestic and international companies that were started by Wisconsin entrepreneurs (Table 1); and, increasingly it is the source of new and emerging companies in growth in areas like healthcare (e.g., medical devices and diagnostics), biotechnology, and HealthTech (e.g., digital health). (6)

      Immigrants from Europe and the Eastern United States settled in Wisconsin during the nineteenth century, with dramatic growth in the period of time leading up to becoming a state in 1848. Wisconsin's population increased thirty-fold, from 11,000 to over 305,000, during the period from 1836-1850. (7) With this rapid population growth, there was an increased demand for merchandise. Immigrants brought crucial knowledge and experience "of successful Old World consumer co-operative techniques ... supporting cooperative stores," and establishing the concept of a market. (8) As markets started to flourish, many ambitious immigrant entrepreneurs founded their own companies in Wisconsin. As time progressed, Wisconsin established itself with strength as a dominant dairy supplier. According to the United States Department of Agriculture, Wisconsin was ranked second in the Unites States, with 1.3 million milk cows and $5 billion in sales in 2012. (9) Adding to this strength in the dairy industry, Wisconsin is also strong more generally in the food and beverage industry, with dairy-based companies like Sargento Cheese, Palermo's (pizza), and Culver's (frozen custard) being prominent brands (Table 1).

      Along with the dairy industry, Wisconsin is a significant beer supplier. In one month, Wisconsin produces 868,424 barrels of beer, and sells 622,071 cases and 71,638 kegs of beer for export out of state. (10) Examples of Wisconsin beer companies (11) include Miller (now MillerCoors), Leinenkugel, Minhas Craft Brewing, Stevens Point Brewery and more recently, Lakefront Brewery, Sprecher's and New Glarus Brewing. Older brands that have since left Wisconsin include Joseph Schlitz Brewing Company (founded in 1848 and once the largest producer of beer) and Pabst Brewing Company (founded in 1844).

      Besides the dairy and beer industries, businesses from different industries thrived in the past two centuries, including construction, energy, finance, healthcare, insurance, law, and manufacturing. Some companies founded in Wisconsin have grown to have an international presence, such as Harley-Davidson, Northwestern Mutual, Alliant Energy, Acuity Insurance, and Brady Corporation (Table 1).

      Manufacturing is the largest employment sector in Wisconsin, (12) and the biggest manufacturing sub-sectors include electric equipment manufacturing (e.g., Rockwell Automation Inc. and Generac Power Systems) followed by paper and paper converting (e.g., Kimberly Clark) and then other sectors such as food and beverage (dairy, agriculture), chemicals (plastics, consumer products) and machinery (machines, metalworking, hardware, foundries, stamping).

      Wisconsin also exports a considerable number of products. Wisconsin's exports increased to $19.8 billion in 2010, with the top five export destinations being Canada, Mexico, China, Germany, and Japan. (13) Manufacturing and machinery represent one of Wisconsin's larger export industries, comprising 27% of total Wisconsin's total exports in 2010, followed by computers and electronics, and transportation equipment. (14) Historically, Wisconsin companies also contributed significantly during World War II. For example, Oshkosh Corporation designed and built eighty vessels for the U.S. effort.

    2. Celebrating Wisconsin Entrepreneurs

      Wisconsin has a rich history of entrepreneurial successes, but the stories of the formation of those companies--and of the people who founded them--are not available in one location. To address this problem, information on over 150 Wisconsin companies, including their founders' stories and the core values of the companies, is being compiled in a partnership between Concordia University Wisconsin and the Milwaukee County Historical Society, (15) in what is being called the Wisconsin Entrepreneur Exhibit[TM]. The compilation interface is shown in Fig- 1, with a synopsis of key information provided in Table 1. Wisconsin companies tend to cluster into the sectors shown in Fig. 1; but it is noteworthy that the largest sector in terms of numbers of companies is food and beverage, with recognizable brands like Sargento, Palermo's, Sendik's, Johnsonville Foods, Usinger's, MillerCoors, Pabst, Cousins Subs, Sentry Foods...

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