Economic Development

Forming partnerships with business and industry to improve the economic health of the state

contents:
  • Research Park supports high-tech entrepreneurs
  • WARF fosters economic development and research
  • Way beyond cheddar
  • Engineers save Madison ratepayers millions
  • Center counsels small business entrepreneurs
  • Other Economic Development examples.



  • Research Park supports high-tech entrepreneurs

    Campus connection has helped birth of 58 businesses in park's first 11 years.

    With the scientific resources of UW-Madison at their doorstep, dozens of new science and technology companies have found a productive home at the University Research Park in Madison.

    The 11-year-old research park was created with the goal of using UW-Madison's research capability as a magnet in attracting and developing high-technology firms in the city. The effort has paid off in its first decade: the park now has 58 businesses and nearly 1,500 employees, and is generating almost $1 million in property taxes annually for the city.

    The park's tenants find the park's best attraction is having access to the people and resources of the university. For a fledgling technology firm, those connections have become invaluable.

    "The park is trying to provide an atmosphere where companies can succeed. They're not just a landlord," says Maggie Smith, vice president of Genetics Computer Group.

    The company produces software that helps genetics researchers decipher the complex chemical sequences of DNA. The company's products are central to the work of the Human Genome Project, which is attempting to unravel the basic building blocks of human life.

    Genetics Computer Group is a spinoff company from the UW- Madison Biotechnology Center. While the company is no longer part of UW-Madison, its connections with campus are crucial to its success, Smith says.

    On a weekly basis, the company moves the development versions of its new software to a campus computing center, where researchers can use new enhancements and, in turn, report back any problems they encounter. And Genetics Computer Group is a constant user of the park-provided Internet connection, providing a crucial link to customers. "There are many advantages to being in close proximity to one of the top research universities in the country," she says.

    Other companies have found similar benefits from the campus connection. Tetrionics, a pharmaceutical development firm, is using the groundbreaking UW-Madison research on Vitamin D to develop products for the treatment of osteoporosis and cancer. PanVera, which manufactures biological reagents for medicine, has nine consultants at the university advising them on the quality of their products and trends in the field.

    The park also houses the MG&E Innovation Center, which gives upstart companies shared access to clerical staff, conference rooms and equipment, and other basic business support. The services help companies concentrate on product development and research.

    "The single greatest success of the park," says Park Director Wayne McGown, "is providing a place for new entrepreneurs. We brought that about by encouraging a private sector relationship with the campus."

    Already occupying more than 700,000 square feet of space, the park's buildings could double that in coming years as it expands into property west of Whitney Way. The park is ranked in the top one-third of the 140 research parks in the U.S. and Canada in terms of total real estate developed.



  • WARF fosters economic development and research

    Royalties from 72 licenses and 51 patents totaled nearly $16 million in 1993, insuring a new generation of discoveries.

    With a UW-Madison agronomy degree in hand, John Brunnquell returned to his family's farm in Port Washington ready to lead a major egg production operation. He didn't realize at the time that the tide was changing dramatically for his business.

    "In the late 1980s, the egg industry was repeatedly getting beat up over the issue of cholesterol," says Brunnquell, the vice president of Century Acres Eggs. "We found that consumers were extremely sensitized to the health concerns."

    Rather than fret over a shrinking market, Brunnquell began research to lower the cholesterol content of eggs, first at Century Acres and also as a graduate student in UW-Madison poultry science. The end result was an egg that had 25 percent less fat and cholesterol on average.

    That's where Brunnquell's partnership began with the Wisconsin Alumni Research Foundation (WARF), a non-profit organization devoted to making UW-Madison research discoveries available to the public. The technology behind the eggs was assigned to WARF, which filed for a patent.

    In turn, WARF licensed the technology to Century Acre Eggs, of which John Brunquell is one of five owners. They immediately applied it to the Century Acres business. Since starting the "eggstasye" line of low-fat and low-cholesterol eggs in 1994, Century Acres has sold more than 250,000 dozen eggs, developed exclusive markets in eight states, and started an international company that just formalized a contract with Japan.

    "This wouldn't have happened without WARF," he says. "WARF can quickly move technology from the lab to the business world. Few communities can do that effectively."

    As both discoverer and entrepreneur, Brunnquell offers a fairly seamless example of how WARF can foster economic development in the state and beyond. With its ability to both patent and license discoveries stemming from UW-Madison research, WARF can make technologies available to industry that would otherwise remain undeveloped.

    WARF director Richard Leazer says industry has been relying more than ever on universities as a research and development as a cost-effective way for businesses to stay competitive. In the pharmaceutical industry alone, 44 percent of new products have come from university research, he says.

    "At most universities, if faculty members have a discovery with commercial potential, they usually don't have the money or the expertise to pursue a patent," Leazer says. "We have the money to invest in patents, and we also have an infrastructure of people who can make the contacts with industry."

    Leazer says 40 percent of the income-produced licenses WARF manages have gone to Wisconsin companies, which has been a significant boon to the state economy. The presence of WARF has also helped accelerate the growth of biotechnology companies in Dane County.

    UW-Madison has a long and unique history of making these technology transfer connections work. WARF has been around since 1925, when pioneering UW dairy scientist Harry Steenbock made an important discovery in vitamin D irradiation processes, which could activate Vitamin D in milk and food products. In order to control the standards of this process, Steenbock sought a patent and put the wheels in motion for the creation of WARF.

    Steenbock's Vitamin D irradiation process remains one of the greatest testament's to WARF's importance, and led to a complete conquest over once-common diseases such as rickets. Other discoveries protected by WARF patents include UW biologist Karl Paul Link's development in the 1950s of Warfarin, a breakthrough rodenticide that greatly controlled rat populations on farms. The same discovery led to lifesaving drugs that could adjust blood clotting in humans.

    For the past three decades, UW biochemist Hector DeLuca's findings related to the medicinal potential of Vitamin D continue to have far-reaching benefits in fighting osteoporosis, chronic kidney disease, psoriasis, cancer and other diseases. DeLuca currently has 63 active U.S. patents and 299 foreign patents. Pharmaceutical companies have developed a number of successful disease-fighting drugs from DeLuca's discoveries, and his patents are currently the top producer of royalties for WARF.

    WARF royalties totaled nearly $16 million in 1993 (the latest available yearly data), with income generated from 72 licenses, and it obtained 51 patents. That money is channeled back into the research enterprise at UW-Madison, ensuring a high standard of excellence in research and thus a new generation of discoveries.



  • Way beyond cheddar

    An amazing array of UW research benefits Wisconsin's milk producers and processors.

    It seems only natural to form an alliance among UW-Madison dairy researchers, dairy farmers and cheese producers. But the extent to which research conducted at UW-Madison's Wisconsin Center for Dairy Research affects the state spans the Milky Way - from producing useful proteins by genetically improving the cow's udder to finding new uses for the whey that remains after cheesemaking.

    Drawing on expertise from across the campus and around the world, the center carries out a multidisciplinary program to develop new uses for milk and milk components. Links with manufacturers are crucial and are a central focus for the center, according to director Rusty Bishop. In addition to the more than 150 publications and presentations in the past two years, the center sponsors up to 35 research projects a year:

  • Specialty cheeses profitable for small companies: While Wisconsin will continue to produce Cheddar and other popular cheeses, import-type specialty cheeses have caught the fancy of U.S. consumers over the past 15 years. As the market changes, Wisconsin cheese makers with the help of UW-Madison dairy researchers are right there in the forefront, says Jim Path, a specialty cheese technologist at the center.

    Researchers have developed and tested a variety of specialty cheeses, including Wisconsin-Style HavartiŠ cheeses, and they are working with Chalet Cheese in Monroe to develop a new Port Salut-style cheese.

    "You've got to look ahead or you'll be left in the cold," says Myron Olson, manager of Chalet Cheese, a cooperative wholly owned by the 35 farmers who supply its milk. Olson understands the potential of new cheeses. Thirteen years ago, Chalet Cheese didn't make any Baby Swiss; today, it accounts for about 75 percent of its production.

  • Doing away with whey - cleanly and profitably: Wisconsin cheese factories churn out nearly 2 billion pounds of products a year. Those curds leave behind about 18 billion pounds of whey, and center researchers are developing new ways to use it. Food scientist Jim Steele is engineering bacteria from whey that produce only L-lactic acid, which can be converted into polylactide polymers. Polymers can be used to make photodegradable and biodegradable films, such as coatings for paper plates and milk cartons.

    This research has been applied industrially at the ECOCHEM whey processing plant near Adell. The $20-million facility converts the lactose in whey into lactic acid. The plant is connected by pipeline to the Adell Whey Co., which collects whey from cheese factories throughout east-central Wisconsin.

  • Cutting calories in cheddar cheese: In today's health- conscious culture, many consumers want reduced-fat Cheddar cheese but they also want full Cheddar flavor. No problem - right? Wrong - drastically reducing the fat can result in bad-tasting stuff with the texture of library paste.

    Reducing the fat in cheese by 25 percent is fairly simple, but cutting fat by 50 percent poses a challenge, says center senior scientist Mark Johnson. Johnson and his colleagues produced tasty reduced-fat cheese by selecting starter cultures and skipping the usual cold-water wash during manufacture.

  • No more hazy cheese: Calcium lactate, a harmless white haze, sometimes forms on Cheddar-type cheeses. The haze won't harm people or cheese flavor, but hazy cheese doesn't sell. Cheese that shoppers reject gets sold for salvage, with an annual loss to the Wisconsin dairy industry that may total nearly $6 million.

    Under the direction of Norm Olson, the former director of the center, researchers developed low-cost ways to eliminate haze. In addition, they developed an early warning system that tells packagers if the cheese is likely to develop the haze. Cheese that triggers a warning can be shipped directly to processors that make cheese spreads and other products.



  • Engineers save Madison ratepayers millions

    Students and faculty develop a better way for the Madison Metropolitan Sewerage District to solve an expensive problem.

    A 1997 deadline to cut discharges of phosphorus into surface waters posed an expensive problem for the Madison Metropolitan Sewerage District - and the 270,000 people it serves. The new requirement threatened to cost a tanker-full - $54 million over 20 years.

    Following a tradition that dates to the early 1970s, the district asked UW-Madison engineers to help solve the problem. The solution they developed will save millions of dollars for ratepayers, while still protecting the environment.

    The Wisconsin Department of Natural Resources (DNR) imposed the deadline to prevent phosphorous from feeding algae in streams and rivers. The sewerage district proposed an alternative to the DNR's chemical method of phosphorous removal: using biological techniques in the treatment plant. Two graduate students from UW-Madison's Department of Civil and Environmental Engineering built a pilot plant that introduced a bacteria to consume the phosphorous.

    Wayne Karlovich of Muskego, Wis., and Todd Rubens of Yakima, Wash., students of Professor William Boyle, ran the pilot plant for almost a year. The data they produced was impressive enough to earn them master's degrees. It also convinced the DNR that biological removal would work, so the department issued a variance allowing the technique.

    "The UW study was critical in getting that variance - we would not have gotten it without the pilot project data," says Jim Nemke, the Madison Metropolitan Sewerage District's chief engineer.

    The removal the students engineered will be less expensive - about $19 million over 20 years for modifying aeration tanks so bacteria will eat the phosphorous. So the sewerage district's $60,000 investment in graduate students will save $35 million in present-value dollars. In addition, the district won't need to add 7,000 pounds of alum to its waste stream daily. The benefits extend beyond Madison, since other wastewater dischargers in Wisconsin can now use biological phosphrous removal.

    "Originally, the DNR was uncomfortable with biological treatment," Nemke says. "They've taken a 180-degree change - now they're encouraging every plant in the state to look at biological removal of phosphorus first."

    Nemke says the district has spent $660,000 on UW-Madison research since 1973 for a simple reason: it's effective. "We get high-grade examination of problems, with high-grade supervision by UW-Madison professors."

    For the college, the relationship has been equally gratifying, says Professor P. Mac Berthouex of the Civil and Environmental Engineering department. In the course of funding 40 master's and six doctoral degrees, the district has given students irreplaceable experience in the real world. "Almost all of the research was used to make decisions," Berthouex says.

  • Center counsels small business entrepreneurs

    Working with individual businesses, the Small Business Development Center improves the community's economic health.

    Small businesses may represent the economic hope for the nation's future, according to economic analysts. National statistics show that the small business sector leads the economy in terms of job growth and innovation.

    At UW-Madison's Small Business Development Center, business counselors are fostering this growth by providing expertise, advice and financial guidance.

    And for some, the center is making hopes of owning one's own business a reality, as was the case for Nan Thepboriruk who says Small Business Development Center classes helped make her "dream come true" when she opened Sukho Thai Restaurant and Food Center on the UW-Madison campus.

    The business development center, located in the School of Business' Grainger Hall, serves a five-county area in and around Madison. This award-winning agency is part of a national Small Business Development Center network.

    The agency works with small and medium-sized businesses including manufacturers, high technology professionals, and service and retail operations. They begin with the basics, even offering classes that help people decide whether they should go into business at all. If it's a go, the center staff gets them off to a good start with the business plan, marketing concepts and financial projections. UW-Madison counseling services work with existing businesses to improve marketing, operations, human resources and financial management.

    Last year, the center worked with more than 170 businesses on a one-to-one basis, taught over 2,000 individuals in 70 classes and helped more than 1,900 people through its phone information Access Line and database service.

    In some cases, the staff works with professionals on sophisticated turnarounds. Take the case of Jim Billian, who took over the Simon Corporation in 1993 after retiring from Hughes Aircraft. The center offered help by bringing marketing and management training to the corporation's 60 employees.

    Or, it can help solve problems by linking clients to the university's resources, as was the situation when a Wisconsin play equipment manufacturer needed engineering counseling on the most efficient way to enlarge its plant, or a company needed a Wisconsin machine re-engineered to blanch and cook almonds.

    "We are always looking for ways to improve our service to our clients," says Joan Gillman, who has directed the Small Business Development Center for the past seven years. "One of important measures of a community's health is its business climate. We feel that by contributing to success of individual businesses, we are helping create and sustain a more stable and healthy economic climate."



    Other Economic Development examples

  • The university is active in 18 industrial consortia organized by UW-Madison faculty to draw together companies with common interests in supporting university research.

  • Forest geneticists in the College of Agricultural and Life Sciences have developed genetically improved pine and spruce trees that are expected to grow 10 to 30 percent faster, and have better stem form and greater disease resistance than trees previously available.

  • Research at the College of Engineering helped open new business avenues for Fisher-Barton, Inc., a lawn mower blade manufacturing firm in Watertown, Wis., and spawned a new company for its owners. Through collaboration with UW engineers, Fisher-Barton moved into the area of plasma spraying, or applying a thin coating of material to the surface of a tool or machine part to make it more resistant to abrasions and heat. As demand for this new process grew rapidly, Thermal Spray Technologies was created, applying its process to machines used in a variety of industries, including papermaking, medical, automotive and small engine.

  • Farmers who apply a fungicide to protect young soybean plants from root rot will soon be able to protect the crop with a biological control agent discovered by College of Agricultural and Life Sciences plant pathologists. The company marketing the new product expects it to cost considerably less than current methods. Based on expected costs, that could amount to a savings of $2 million per year for soybean growers if half of them use it.

  • Specialists at the College of Engineering and UW Extension have created the Solid and Hazardous Waste Education Center to advise state businesses on the economic benefits of pollution prevention and other aspects of environmental regulations. For example, the Newco Fabrication Division of Swing-N-Slide Corp., a Janesville engineering and fabricating firm, is saving an estimated $141,000 annually by using powder coatings instead of spray paints - a move that also reduces pollution. The center worked with 566 Wisconsin companies in 1994 to reduce pollution while saving firms money.

  • Whether it's a Door County orchard owner selecting new apple trees or a farmer picking corn, soybean, oat or alfalfa varieties, Wisconsin growers depend on the plant variety evaluations that College of Agricultural and Life Sciences scientists carry out each year. For example, a recent study showed that almost 60 percent of Wisconsin farmers depend primarily on these evaluations when selecting alfalfa varieties. By harvesting varieties that rank in the top 10 percent rather than varieties that produced an average yield, farmers earned an additional $55 million in 1994.

  • The Wisconsin Center for Urban Land Economics Research at the School of Business has been involved in several real estate development issues as a part of its community service focus. The center, funded in part through real estate licensing fees and research grants, focuses on professional education and outreach to the public. Consulting projects have included working with a southside Madison neighborhood group to redevelop the area, developing strategic plans for the Hilldale Shopping Center and the University Research Park, advising Native American tribes on land use issues and helping the UW Arboretum find a long-sought buyer for a piece of commercially zoned land.

  • In response to a concern expressed by a Wisconsin meat packer about keeping red meat red, animal scientists at the College of Agricultural and Life Sciences discovered that meat from steers fed extra vitamin E stayed fresh-looking up to five days longer in supermarket coolers. The meat will still turn from red to brown before harmful bacteria develop. If adopted nationwide, the practice could save the beef industry nearly $1 billion annually.

  • Long-term research on ways to clean up Green Bay, Lake Michigan, by the UW Sea Grant Institute over the last 20 years, led to the Fox River-Green Bay system being selected by the United States Environmental Protection Agency for a landmark national study. The study identified sources, movement and the ultimate fate of a toxic contaminant (PCBs). UW-Madison scientists conducted research on essential parts of this five-year study, completed in 1993. The study's findings saved the state hundreds of millions of dollars in unnecessary clean-up costs that actually would have been counterproductive to reducing PCB-contamination.

  • Two researchers at the College of Agricultural and Life Sciences have found a way to reduce the amount of feed needed to grow animals. The researchers estimate that Wisconsin's poultry industry could save $1 million each year in production costs, and foresee much larger savings for the cattle and swine industries.

  • The Bureau of Business Research at the School of Business issues long-range economic forecast studies for Wisconsin, including the recent publication of "Wisconsin's Economy in the Year 2000." These studies help industry and government officials plan for the economic future of the state.

  • A comprehensive program to manage potatoes is a national model for growing crops with minimal chemicals. Developed by a College of Agricultural and Life Sciences team, the program saves Midwestern potato growers nearly $1 million each year in pesticide and irrigation costs while improving environmental quality.

  • The Enterprise Center of the School of Business encourages entrepreneurial activity in Wisconsin, including management training to the Ho-Chunk Nation.

  • A potato cultivar named Snowden, developed by a geneticist and breeder at the College of Agricultural and Life Sciences, has brought the potato chip industry back to Wisconsin. Since Snowden was released in 1990, the nation's two largest potato chip manufacturers have been shifting potato contracts to Wisconsin's Central Sands. One Wisconsin grower reports his sales went from $180,000 to $9.5 million in four years, all due to Snowden.

    Back to the Main Menu.