New North employers, educators are crafting the infrastructure for a world class high-tech workforce
Story by Jessica La Plante-Wikgren
The Wisconsin versus California rivalry is not just limited to cheesemaking and milk production. While agriculture and manufacturing have traditionally occupied the state’s economic limelight, a host of locally owned high-tech companies are helping the Dairy State earn a reputation as a trailblazing pioneer of the digital frontier.
With its track record of leadership in advanced manufacturing and nationally renowned network of two- and four-year colleges, the New North and Fox River Valley are demonstrating “shades of Silicon Valley-ness” as a hub of IT innovation.
To that end, local universities and IT companies are ramping up efforts to upgrade Wisconsin’s image as a digital utopia – a place where IT professionals can forge cutting-edge careers and high-tech entrepreneurs can find the raw talent and infrastructure needed to fuel their technology dreams.
New North’s high-tech history
Located on the southern edge of the Fox River Valley – a landscape dotted by picturesque farms and historic and distinctive factories – is the nation’s oldest vendor of veterinary practice management software. Founded in 1979, Oshkosh-based ImproMed, Inc. is the leading software development firm in its industry, employing more than 130 people at multiple locations throughout the U.S.
In an era where many U.S. firms are scaling back their budgets and operations, ImproMed (www.impromed.com) is enjoying a growth spurt, having recently purchased a Walnut Creek, Calif. company located in the heart of Silicon Valley. Despite the company’s acquisition of a Silicon Valley firm, ImproMed President Ron Detjen said he has no intentions of moving his base of operations to the IT capital of the world.
That’s because ImproMed has a more than ample supply of world-class IT talent in its current northeast Wisconsin location, thanks to the state’s strong higher education system and a spirit of innovation that can be traced back to the industrial revolution. Detjen said northeast Wisconsin has all the raw ingredients needed to become a world leader in the IT industry.
“The Wisconsin educational system at the universities and the tech school is so powerful that it can supply us with very high quality employees,” Detjen said, adding that Wisconsin technology workers are “well-anchored; they have exceptional job skills and education and an exceptionally strong work ethic.”
“A lot of people don’t realize it, but Wisconsin is actually a powerful player in the software market,” Detjen said.
In addition to a strong Midwestern work ethic, the Wisconsin labor force also boasts another quality that has contributed to ImproMed’s competitive edge – a spirit of innovation that dates back to the state’s leadership during the industrial revolution.
“Before I was born, the state of Wisconsin had an extreme industrial complex,” Detjen said. “Wisconsin created more innovation in the automotive industry than any state in the nation. When you look at all of the big companies that we have in Wisconsin, all of those companies have this huge (tradition of) industrial innovation. The engineering that came out of Wisconsin was phenomenal.”
“I think Wisconsin still has this great capability of innovation,” Detjen said. “I don’t know why, but I do know it’s here. I think the innovation is now going to shift from the industrial complex to IT and computer software.”
Several factors make software engineering an ideal vehicle for launching the state’s next economic revolution. In terms of start-up capital, the market is easier to break into than traditional industries.
In software development, “two or three people can come up with a wonderful idea, get it into a 60 to 70 percent (condition), get some additional capital help and take it to the market,” Detjen said. “If you were to build a new car, you’d have to have millions and millions of dollars just to build the infrastructure and equipment.”
By contrast, a “software company can be started anywhere,” Detjen said, adding that “a software company has almost no load on the infrastructure.”
In addition, software companies confer another economic advantage: They bring money into the state and put it into the hands of local workers, fueling regional economic growth. Unlike manufacturing, there’s little operational expense on raw materials or out-of-state components vendors, as examples.
“Almost all the money that we collect annually that comes in is spent on wages,” Detjen said. “We are actually a money importer to the city of Oshkosh.”
Detjen said the state should focus more attention on the growth of its intellectual property industries, noting that IP companies pose little economic burden and offer enormous potential in terms of economic growth and creating high-paying, professional jobs.
Educating the next generation of IT workers
Increasing awareness of software engineering among college students and providing more support for high-tech startups are two ways the University of Wisconsin-Oshkosh is hoping to spur the growth of the state’s IT industry.
At a time when many new graduates are having difficulty breaking into a tight job market, UW-Oshkosh’s Information Systems and Computer Science graduates are in high demand.
“We’re definitely seeing an increase in terms of the number of internships and employers that are looking to hire for IT positions,” said Jessie Pondell, professional development director of the College of Business at UW-Oshkosh. “We’re seeing a huge demand for these types of skills, and we’re increasing the supply and we will continue to do that.”
UW-Oshkosh recently formed a curriculum advisory board consisting of local IT professionals and business leaders. A close partnership with business and industry has been one of the school’s historic strengths. As a result, graduates leave the IS program with hands-on experience and real-world skills in business processes, software engineering and project management.
“Every single one of our IS students is going to have an internship before they graduate so they are able to integrate their curriculum and academic knowledge into a real-world situation before they go into the workforce,” Pondell said.
The strength of UW-Oshkosh’s IS internship program – combined with the College of Business’ reputation for producing well-rounded business graduates – has made it a popular recruiting venue for IT employers.
“We’re seeing that we can place almost all the students we’re graduating,” said Jakob Iversen, associate professor of Information Systems at UW-Oshkosh. Our graduates are “able to find good jobs. We’re actually getting companies contacting us looking for more students than we can supply.”
Demand for IT graduates is expected to grow in the coming decades as Baby Boomers – the pioneers who authored the IT industry’s growth, and whose multi-decade reservoir of experience will be difficult to replace – begin retiring in larger numbers. After the Dotcom bubble burst early last decade, enrollment levels in computer science programs declined sharply. Although UW-Oshkosh witnessed a modest increase in the number of Information Systems degrees awarded last year, there is still the need to make college students, especially women, more aware of opportunities in the IT profession.
“A lot of students are not aware that unemployment within the IT sector – especially in this (geographic) area – is really low and salaries are still strong,” Iversen said. “One of the challenges that we have is that not a lot of women are going into the IS program, and that may be contributing quite significantly to the downturn in enrollment.”
Attracting more people into the industry means educating young people about the breadth and variety of career opportunities that exist in IT, emphasizing the fact that the industry is home to people of all talents, not just programmers.
“There are a lot of jobs where you’re not just sitting in a cubicle working on technology, but you’re actually working with customers and clients and interacting with many people,” Iversen said.
To prepare students for the digital economy, UW-Oshkosh recently upgraded its business programs to include a greater emphasis on technology. Software development students are trained in such industry best practices as agile development, while students in other majors, such as journalism and marketing, gain experience working with social media and digital tools of their trade. In addition, all College of Business majors are required to take at least one information systems course.
The College of Business (www.uwosh.edu/cob/) is also promoting entrepreneurism as a career path for people who enjoy innovating and are interested in carving out their own career niche. As part of the university’s high-tech makeover, UW-Oshkosh launched an Interactive Web Technology Management program to prepare students for careers as IT entrepreneurs.
“We hope that it will be a good engine for students to have the courage to start a company,” Iversen said. “The degree will focus on not only core marketing but also social media marketing and PR within the technology world.”
Given the dizzying array of technologies currently used in the software development and IT world, hiring college graduates who are already familiar with the specific technologies used at one’s company is a major advantage for local employers. To that end, UW-Oshkosh’s IS internship program has served as an important resource for local companies who want to diversify their IT staff by developing young talent.
The high-tech ripple effect
DealerFire – an Oshkosh-based Web development company specializing in building Web applications for the automotive industry – is one example of a local company that’s tapped UW-Oshkosh’s IS program to find new talent. In recent years, the company transitioned several IS graduates from intern status to full-time employees.
The success of one technology firm in a community tends to cause a ripple effect, attracting other like-minded firms to the area due to the guaranteed pool of labor and the region’s reputation as being home to world-class talent. DealerFire’s founder, Eric Hoopman, has seen Oshkosh’s IT industry gain momentum in recent years, mirroring a statewide trend in technology job growth.
“As we’re getting a bigger footprint in our industry and establishing our brand, we’re getting more inquiries and interest from people around the country that are looking to come to Oshkosh to work for DealerFire,” Hoopman said.
Founded in 1999, DealerFire is now 45 employees strong. The company provides Web design and development, multimedia, social media and search engine marketing services to more than 800 automotive dealerships located throughout the U.S., Canada and Europe.
DealerFire is a textbook example of the importance of finding focus within the IT industry. A conversation with a Dallas Toyota dealership several years ago prompted DealerFire to “discover the automotive space,” recognizing a need to make automotive Web sites easier to market. As a result, “we started to build our own (online marketing) engine.”
In 2009, DealerFire won the Pinnacle Automotive Website Award for Search Marketing. The national attention also won Hoopman a myriad of new clients and marked a breakthrough in terms of sales growth. Winning the title a second time in 2010, DealerFire remains the only company with fewer than 100 employees to receive the prestigious award.
DealerFire is now building more than 50 major Web sites a month and is the recipient of a $75,000 tax credit awarded by the former Wisconsin Department of Commerce for creating high-tech jobs in the state. The Economic Development Tax Credit will be used to expand DealerFire’s already robust workforce.
Hoopman credits the talent, energy and work ethic of his staff as being the driving force behind his company’s success: “Our team is really going toe-to-toe with billion-dollar companies out of Chicago, New York and L.A.,” Hoopman said.
He sees northeast Wisconsin’s IT industry emerging as a major engine of economic growth and job creation in the state.
“There’s a ton of tech startups in the area,” Hoopman said, noting that a good idea is the great equalizer in the industry, where all a person needs to bring a product to market is “a laptop, a great idea and a really strong drive.” For the most part, the sluggish national economy hasn’t affected small IT startups as much as businesses in other sectors.
“You don’t need a ton of money and you don’t need a degree or a huge amount of banking connections to get started,” he said, adding that “there are a lot of self-starter Web development companies in the area of iPhone applications, application development and social media plug-ins.”
The same reasons that make northeast Wisconsin an attractive place to live and raise a family also make it a good place to start and grow a tech business. Hoopman cites the region’s strong educational system, low cost of living and high quality of life as factors that are putting the New North on the national technology map.
Recently, the growth of Wisconsin’s technology sector captured the attention of Wired magazine. A map published in the June 2011 issue of Wired magazine identified hotspots of U.S. tech job creation, where thousands of new technology jobs were added between 2003 and 2008. The Green Bay, Fox Cities and Oshkosh region – as well as the entire Eastern Wisconsin coastline – was identified as a hotspot. DealerFire’s blog, located at www.dealerfire.com/blog, contains a link to the map, which paints a promising picture for Wisconsin’s technology sectors, especially the biotechnology, automotive, plastics and manufacturing industries.
A haven for high-tech transplants
Northeast Wisconsin natives aren’t the only ones reaping the benefits of the state’s rapidly growing technology centers. The New North has already attracted its share of high-tech transplants.
Christopher Hytry Derrington – co-founder of the Two Rivers-based Rural America OnShore Outsourcing – is one example of an IT professional and career entrepreneur who found the business climate in northeast Wisconsin ideal for growing a high-tech startup.
Prior to moving to the Lake Michigan shoreline – a decision prompted by his wife’s native ties to Sheboygan Falls – Hytry Derrington had been involved with 13 high-tech start-up companies located in such sprawling urban centers as Salt Lake City.
Before founding his IT staffing company in 2008, he had been outsourcing software development work to Indian and urban vendors. Like many entrepreneurs in his industry, Hytry Derrington quickly discovered that finding affordable help was perhaps the biggest obstacle to his business’s growth. Disappointed by a lack of cost-savings realized from offshoring work to India – and disheartened by the high cost of hiring urban IT talent – Hytry Derrington began looking for a solution to his problem off the beaten path.
Inspired by his wife’s native ties to the Dairy State, he took his search for IT talent to Wisconsin, where he found not only an innovative solution to his staffing problems but also inspiration for launching a new business venture. The hourly rate for Wisconsin software developers was “a fraction of what I was paying to Chicago-type developers, and it opened my eyes to a whole subset of the U.S. population who is highly talented, well educated, hard working and chooses to live in rural areas,” Hytry Derrington said.
Eager to help other companies tap an under-utilized talent base in northeast Wisconsin and rural America, Hytry Derrington launched Rural America OnShore Outsourcing, a business process outsourcing firm that offers professional services in a myriad of industries, ranging from software development to graphic design and interactive marketing. By allowing IT professionals to telecommute from communities such as Menasha and Appleton, where the cost of living is lower, Hytry Derrington is able to save his clients between 25 and 40 percent on labor costs.
“We’re told by our customers that our rural rates are the same as or close to India’s,” Hytry Derrington said. “Companies have no reason now to go offshore just to save money. Businesses want to outsource, and now they can but still create American jobs.”
Hytry Derrington made Two Rivers the permanent home of his IT staffing firm in 2009. Today, his business is experiencing rapid growth. With development offices located in three states, Rural America (www.ruralamericaonshore.com) recruits talent in 47 states and maintains a database of more than 4,000 candidates, most of whom are seasoned professionals with college degrees and years of industry experience.
Hytry Derrington said it is the growth of rural broadband that has made his business model possible.
“Because $7 billion is being spent on broadband throughout the USA, there’s an estimated 11 million Americans who will be entering the virtual workforce,” Hytry Derrington said.
“Our whole business model is based on the fact that we bring work to the person without the person having to relocate,” he said.
Helping companies and rural professionals discover opportunities that lie outside the traditional geographic box is more than just a business idea to Hytry Derrington. He has made the concept behind Rural America OnShore Outsourcing his life’s mission. To that end, he recently collaborated with county and state economic development officials to launch TechShore.org – a nonprofit organization committed to educating IT professionals and entrepreneurs about high-tech opportunities in Wisconsin. The online economic development platform is expected to launch this fall.
In order to grow Wisconsin’s IT industry, “we have to talk about the talent pool that’s here, the cost of wages and the low cost of buildings that are here,” Hytry Derrington said. “We’re going to have Web cams up and down the whole coast lines so people can see how beautiful it is here.”
A second goal of TechShore.org is to help aspiring entrepreneurs in the state connect with the resources needed to launch their own home-grown, high-tech startups.
“Having moved here three years ago, the resources for technology startups outside of Milwaukee, Madison and Green Bay were limited,” Hytry Derrington said, a trend he hopes to change with the help of other IT professionals and economic development officials. A long-term goal of TechShore.org is to “provide entrepreneurs with resources of where to go to access technology attorneys, good bankers, good accountants (who understand intellectual property),” Hytry Derrington said, adding there are “banks all around the country that cater to early-stage companies; we need resources like that here in Wisconsin.”
Companies like Rural America, DealerFire and ImproMed are proof that IT workers and high-tech entrepreneurs no longer have to choose between cutting-edge careers and their hometown communities. Driven by the expansion of rural broadband, a long-standing tradition of high-tech innovation, and Wisconsin’s strong technical college and university systems, the New North is abounding with as much world-class talent and raw potential as Silicon Valley. To a large extent, developing that potential is simply a matter of changing public perception and raising national awareness.
“We have to educate people about the opportunities here in Wisconsin,” Hytry Derrington said. “That is how you’re going to create technology jobs here.”
Jessica La Plante-Wikgren is a freelance writer based out of Green Bay. She previously worked as a feature writer and staff reporter for The Door County Advocate and the Green Bay News-Chronicle. La Plante-Wikgren can be reached by email at firstname.lastname@example.org.