Project Milwaukee
3:25 pm
Fri December 11, 2009

Water Efforts Criticized as Misguided

All week, we’ve been reporting on local efforts to position Milwaukee as the world’s hub for water technology and research. We visited companies already here, and reported on incentives to grow the industry, such as tax breaks. But there’s been limited criticism. Today, we delve into a report that calls the initiative financially risky and unlikely to succeed. WUWM’s Erin Toner has today’s installment of Project Milwaukee: The Currency of Water.

The Milwaukee 7 Water Council, the group promoting the creation of a water hub here, says the region already has a great start. Not only is Milwaukee located on one of the world’s largest freshwater lakes, but according to the council, the region already has more than 120 companies and 20,000 workers involved in the water sector.

“That’s all been incredibly overstated,” Levine says.

Marc Levine is director of the Center for Economic Development at the University of Wisconsin-Milwaukee. He and colleagues have been researching the water industry. Their data shows there are closer to 7,000 people employed in the local water sector – not 20,000, unless you count all the employees at companies where only a small percentage are involved in water-related work. Levine also claims Milwaukee has fewer water patents and hydrologists than other cities interested in the freshwater industry.

“Milwaukee is one of about, I would say, 15 or 20 cities around the country that has something of a concentration in water. There is a very big difference between saying we have a viable water sector, and that we’re going to be the ‘Silicon Valley’ of water and that we should bet on it in terms of allocating scarce resources to that sector,” Levine says.

The resources Levine’s referring to include tax breaks the city could offer water-related companies that move here. The city could also create a special area for them south of the Menomonee Valley. Levine also notes that the two companies leading the water initiative – Badger Meter and A.O. Smith – have been choosing locations other than Milwaukee, such as Mexico, to invest in jobs and manufacturing facilities.

“And I think it’s quite ironic actually, that in recent months, the rhetoric seems to have shifted in town about the water technology initiative. Initially it was, ‘We’re already the Silicon Valley. We’re already a hub.’ Now the argument is, ‘Well, if we don’t invest millions of dollars and give what I would call corporate welfare to a number of water businesses, we will not be able to become a water hub.’ I think that’s kind of revealing of the lack of substance behind the entire water initiative here,” Levine says.

According to Levine, research shows that areas that set out to become the hub of an industry usually fail. He insists a more immediate way to grow the local economy is to address the fundamentals, such as by improving education and building a regional transit system.

Claus Dunkelberg is the water industry specialist for the Milwaukee 7 Water Council. He agrees it could take a while for a water industry to produce jobs. But Dunkelberg remains convinced that Milwaukee could outshine other regions, such as Israel and Singapore, that are also gunning for global water hub status.

“I think for the most part we find everybody being very positive and saying, yeah this has got some real opportunity. You know, some of the people say, ‘Well what about filling positions today, what about getting jobs today?’ You know, that’s tough to answer. But I think once everybody recognizes what we’re trying to do in developing a sustainable water economy here, they’re all on board with that,” Dunkelberg says.

And even if Milwaukee does not become the world’s hub, Dunkelberg says the water sector here could grow anyway. “We’ll still get jobs coming in. I think it’s a matter of what level jobs, how many, and how quickly. I think becoming the water hub has really provided, or can provide, a stimulus for higher level positions in terms of education, in terms of industry,” Dunkelberg says.

The Milwaukee area has been searching for a silver bullet to replace the tens of thousands of good-paying manufacturing jobs that have left or evaporated in recent decades. Some of those jobs were related to water. Now it remains to be seen whether an enthusiastic coalition can generate at least part of the solution.