Once famous for beer, Milwaukee now bets on water
Ten years ago John Austin, currently director of the Michigan Economic Center at Prima Civitas Foundation, started asking this question: “What would be the economic impact of cleaning up the Great Lakes?” After two years, Austin and his colleagues at the Brookings Institution came up with an estimate: $50 billion to $80 billion. “If you restore water, if you clean it and if you reconnect to it, it’s a huge economic development engine,” Austin said.
If water had powered the industrial economy, why couldn’t it power a modern economy as well? In Michigan, leaders talk about a "blue economy," everything from reviving waterfronts to lakefront tourism to new technology that cleans, treats or saves water. In Wisconsin, they're also linking water and economic revitalization. Nowhere are they testing the idea of a water tech economy more urgently than Milwaukee.
Fueled by a trade group called the Water Council, the city is developing a large cluster of companies devoted to solving the world’s water woes, bolstered by research at the University of Wisconsin-Milwaukee’s School of Freshwater Sciences. The council is headquartered in a renovated warehouse called the Global Water Center, just off the Menomonee River, a waterway central to the city’s industrial history.
“Those large breweries, many of them have gone away,” Amhaus said. “But the suppliers continue to grow and develop, and these are the ones that are making pumps, valves, meters, pipes, fixtures, all of those gadgets.”Dean Amhaus, the council’s president and CEO, said they’re building on expertise in Milwaukee that’s been around for decades, the companies that traditionally serviced large industrial water users like breweries and tanneries.
Many are companies that know how to move or measure water, like Badger Meter, a company that’s been around since Teddy Roosevelt was president. Back then Badger Meter was selling frost-proof water meters to utilities. Today it’s selling them wireless meters that connect to your smartphone so you can monitor your water use, in real time.
The company bought a California start-up that created the cellphone app. Fred Begale, vice president, engineering says “hundreds of utilities that we typically would not have had as customers are coming to us now. California, Arizona, Nevada, those are the hotspots, as well as Texas.”
Drought and the drive for efficiency are also driving business for start-ups in Milwaukee like Wellntel. It’s making a device the size of a small food processor that lets farmers, vineyard managers and other landowners monitor their groundwater levels online. Again, the customer can access the information in real-time.
Co-founder Nick Hayes said they’re doing a lot of business in water-starved California.
“Seventy percent of what we’ve shipped has landed in California,” Hayes said. “But it should also be said that every single state has stressed zones. We’re not just a drought solver.”
Companies here are selling technology not just to the water-starved, but to the water-polluted as well. Stonehouse Water Technologies demonstrates a water purification unit, shaped like an igloo, on the banks of the Menomonee Canal. It’s aimed at the Third World.
Historian John Gurda reminds people that Milwaukee has a lot of experience with dirty water. In the late 19th and early 20th century, tanneries and other industries used the river like a garbage dump. “So you’d have all the waste from the tanneries and the sewage from upstream and the city proper kind of sitting here and on a hot day the stuff would just sit and cook,” he says.
Good riddance to that kind of pollution. But the city’s new water technology cluster can’t replace the manufacturing base those polluters created. Milwaukee has lost tens of thousands of factory jobs to de-industrialization over the decades. Milwaukee is one of the poorest cities in the country because of it.
Gurda said water technology has the advantage of “playing to Milwaukee’s historical resources,” but added, “I don’t think it will be Allis Chalmers,” referring to the former industrial machinery giant that once employed thousands of skilled and semi-skilled workers in Milwaukee.
“I doubt there will be 20,000 jobs based on water," Gurda said. "But I think it will be an important addition to the 21st century economy.”
Dean Amhaus doesn’t claim water tech can revive the city’s economy on its own, but he believes it can be the most visible Milwaukee industry globally and help lure other investment to the city.
Some here dream of a “Silicon Valley of Water.” David Garman, founding dean of the School of Freshwater Sciences, said that like Silicon Valley, the city has research and entrepreneurs. It also has investment, but it needs more, he saids.
Silicon Valley has the advantage of scores of high-flying investors. Leon Szeptycki, executive director of Stanford University’s Water in the West program, said water has yet to attract that level of money.
“If you look at investment, there’s a lot of VC’s interested in water innovation, but they haven’t solved that puzzle,” he said.
Water is different from IT and biotech.
“Water’s just cheap, which means that there’s low incentives for efficiency,"Szeptycki said. "And given the low price of water and the capital intensive nature of the sector, it’s hard to generate huge returns on investment.”
If water weren’t so cheap, with prices based on supply and demand, Great Lakes champion John Austin said that could spur a Great Lakes boom of sorts - a boom of Southwesterners moving to where the water is.