The Wisconsin legislature has been busy on entrepreneurship. Earlier this year, three new programs were begun to encourage the formation and development of technology companies. One of my students, Tony McGrath, just brought to my attention this article, in which two Wisconsin attorneys discuss next steps.

They suggest four things:

1. New venture capital legislation.... Wisconsin needs $500 million in venture capital to enable us to maximize our entrepreneurial work force and intellectual property potentials. With only $50 million in funds, the current "CAPCO" early-stage investment program is underfunded and inefficient. The recently proposed overhaul and expansion of the CAPCO program did not reach the Assembly floor. The state should create a new pool of $500 million in venture capital, through tax credits to private, corporate and institutional investors. The funds should be invested in Wisconsin companies by professional fund managers who are focused on investment returns to the investors and the state.

2. Private capital facilitation. To help increase the deal flow of potentially dynamic, profitable companies in Wisconsin, we need to have a proactive development company bridging the gap between our abundance of ideas and companies ready for investment dollars. This company would act as a catalyst to coordinate, integrate and facilitate our now fragmented, isolated resources as a central clearinghouse, providing resources/contacts and mentoring the scientists and entrepreneurs to prepare them for funding. This entity would need to have buy-in and oversight by those business, university, civic and government leaders.

3. Eliminating investment hurdles. To eliminate Wisconsin investment hurdles and to attract the new investors we need to build the new economy, at a minimum two things should be done. First, repeal the shareholder wage claim liability provision in the Wisconsin Statutes. Second, eliminate, defer or significantly lower capital gains taxes on returns from investments in Wisconsin new economy companies.

4. The new economy infrastructure. Our goal should be to build the infrastructure that will increase Wisconsin's economic productivity in this century. Regional integration must be a focus. We need to increase the speed by which talented individuals can move between Chicago, Milwaukee, Madison, Eau Claire and Minneapolis. There is a great deal of investment capital in Chicago and Minneapolis, that could be flowing to the cities in the "IQ Corridor" between those two cities. Along the IQ Corridor we need to invest in and build a faster and safer highway system (a Wisconsin autobahn), rail system (a high-speed train) and air traffic system (better and more reliable connections, particularly between Madison and Chicago).

This is startling ambitious, and I like the moniker IQ Corridor. But if you live in Madison, don't rush out and buy that BMW for use on the Wisconsin autobahn.

By they way, I just spent several hours on the German autobahn yesterday, and last week I rode the Chunnel Train from London to Brussels. For all of its great infrastructure, however, Europe is not all that entrepreneurial. It's also not clear to me that tax policy is the answer to the development of a technology cluster. Certainly, more is required, though it is possible that Madison has the "more" already in place and is waiting for that last missing piece -- capital. Nevertheless, count me among the skeptics.

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