By: Andrew Coyle

Milwaukee is home to many creative design entrepreneurs. Together they make up a creative industry that is helping define the future of the city’s economy. The happenings in our creative sector are representing a broader occurrence that is being carried out across our economy.

In this post-recessionary climate, it is the individual who will capitalize on the rapidly changing and intricately woven economic landscape. This investigation of our local economy is being told through communication design entrepreneurs. They are being used as an example to highlight the larger picture of the direction of Milwaukee’s economy.

According to a recent report produced by the Cultural Alliance of Greater Milwaukee and the Greater Milwaukee Committee, creative industries employs over 60,000 individuals, and makes up 4.2% of all Milwaukee regional jobs. It accounts for 4,000 businesses and $2 billion in wages.

The creative industry is made up of design, performing arts, visual arts and crafts, media and film, and cultural/heritage. Design accounts for close to 50% of the wages, and communication design represents over a billion dollars in wages.

Unfortunately, our economy is still dependent on manufacturing. Year after year we see this industry lose more and more jobs as our share of the market trickles through our fingers. We need to face that the manufacturing Mecca of yesteryear is gone, and the jobs are never coming back.

Wisconsin’s future economy will not be focused around the factory. Instead, it will be focused on one’s individual talents. To quote a passage from an economic data research report by the Mt Auburn Associates Report, created in Dec. 2010, “Wisconsin’s economy and prosperity will depend less on how much it produces and more on what it produces, less on its cost of living and more on quality of living, less on its workers’ skills and more on its people’s talents, less on corporate identities and more on entrepreneurial energies.”

The Power Of The Individual

One communication designer who has been an entrepreneur all his life and is embracing the economic shift is Jake Stroh, of Lake Effect Multimedia. His company specializes in web design and brand identity. He started 10 years ago after giving up his family renovation business to pursue his dream as a creative.

Before web design he produced audio for national radio and television ads. He started Lake Effect Multimedia in 2001 after seeing the possibilities of the Internet. He was an early adopter of social media, which he weaves into his clients branding strategies. Not only does he own his own business, he is an instructor at C2 Graphics, an Adobe Training facility and The Milwaukee Institute of Art & Design, a four-year art school.

Jake Stroh runs a successful design business without employing a single person. Instead he negotiates the commission, and assembles a team of creative specialists to get the job done. His business is structured in a way that has started to characterize the future of Milwaukee’s economy.

“The future of business is in the power of the individual,” said Stroh. “I believe Milwaukee has a lot of entrepreneurial spirit. We live in a large creative hub, which has been in the shadow for too long. In Milwaukee the creative economy is really interconnected. I’ll see different advertising agencies sitting down with each other for coffee. In Chicago that would never happen. We have a whole different approach.”

When asked about his views on the recent economic meltdown and the direction we are headed, he told me that the economy needed to “crash and burn.” What he meant by this is that the old modes of doing things are no longer relevant.

“I believe that it is going to take creativity and innovation to save this country,” said Stroh. The new economy is going to be exciting. We just cannot be afraid and embrace possibility and change.”

There is no question that the creative sector is a major economic driver in this state. The creative industry is the fourth largest sector behind manufacturing, finance, and construction. It is an industry that continues to grow in the face of economic upheaval.

Many of the dramatic changes in our economy have come out of the major downturns we saw in the wake of the global financial crisis. Many companies had to dramatically reduce their payrolls. In attempts to improve their bottom-lines, companies considerable reduced their headcount in marketing, advertising, and design. The outcome of this change was a growing shortage of creative talent.

This shortage was highlighted in a report released by Robert W. Baird & Co. in April of 2011, “Strategic Consultants in the Agency space have pointed out that the recent recession resulted in considerable headcount reductions. Furthermore, budgets are shifting resources towards digital marketing, which is asset light but talent intensive. As demand continues to increase and excess capacity is depleted agency costs are expected to increase. Consultants point out that marketers do not appear to be aware of talent-based constraints in the communications industry, with the agencies finding themselves in a situation where they have to educate their customers of such constraints and the higher costs they are likely to lead to.”

Story Tellers

The workforce is gone but the work still remains. Through this painful shakeup new opportunities have emerged for design entrepreneurs. One couple who are making great strides in this environment are Libby and Patrick Castro, of LPW Studios. They started their business during one of the Country’s worst economic times, the financial collapse of 2008. Together they capitalized on the opportunities of the creative shortage.

“I started the business when the economy tanked,” Patrick Castro said. “My business did well because the recession killed a lot of in-house jobs. There was still all of this work that needed to be done. So companies began contracting it out. I picked up a lot of the work that was normally done inside the organization and created a business plan around it.”

Libby and Patrick Castro are married, have two kids, and run a business together, named LPW Studios. It specializes in integrated communications and branding. Patrick does the communication design work and Libby does interior architecture. Together they run a successful design business with clients on both coasts of the United States and in Europe.

“We are story tellers,” said Libby Castro. “We help the client tell their story. We find holes in their brand strategy and fill them. We don’t have one style that we employ. Rather, we let the specific company’s story define the aesthetic. We use our talents to help communicate this story for them.”

The Castro’s business is a perfect example of the economic shift. They started during the recession by taking opportunities that arose from the down-turn. They employ their individual abilities to materialize their client’s brand story. It will be small firms like LPW Studios that capitalize on our new economy.

Just A Big Town

A major advantage Milwaukee has over other big cities is that it is small enough to assemble its creative forces. Milwaukee’s inter-connectivity is fostering collaboration at a whole new level. One design entrepreneur that understands this well is Joe Hausch of Hausch Design Agency, LLC.

“Milwaukee is just a big town,” said Hausch. “You walk down the street, or walk into a meeting, you usually know someone. Word-of-mouth and direct referrals play a big role in being a successful entrepreneur. I’ve started a couple of companies, and there are always challenges, but I am still working with some folks I met 20 years ago, and I still get referrals form others. Many marketing people I worked with in the ‘80s have moved 3 or 4 times in their careers, and they find me and want to work with me again.”

Besides running his design business, Joe Hausch directs an organization called Octodea.

Octodea is an assembly of creative professionals that pool resources to collaborate on projects that require a diverse range of talents. Independence is at the core of the organization. Instead of the dated hierarchical corporate approach, Octodea intends to empower individuals and their gifts through working together.

“We are a multi-armed creative animal that can grow as clients needs develop,” said Hausch. “We have graphic design, product design, web design and development, copy writing, trade-show design and development, public relations and more. All in the form of individual freelance creatives that meet on a monthly basis and share clients, business experiences, and create continuing education experiences.”

When asked about the future of Milwaukee’s economy, Hausch explained that the loss of the traditional Milwaukee industries has initially hurt business, but he believes the climate is becoming better than ever.

“There are many clients still around, we may not be brewing as much as we did, or there may not be as many large manufactures in our backyard, but we have a better mix of clients than we ever had before,” Hausch said. “We cannot lose any more large companies, we need to focus on encouraging growth of small businesses in this area and statewide. We have held our own over the past 25 years here in the Brew City. It could become one of the hottest areas over the next five to ten years. We have a strong group of seasoned veterans and a decent group of young talent coming into their own. I see more freelance and one person operations flourishing in our future environment.”

The New Economy

It is evident that Milwaukee is changing. The industries that once dominated our industrial past are no longer relevant in our enduring future. The new business thinking that is emerging in our economy is that of individuals pooling their talents together. We shouldn’t look at our failing manufacturing industry with despair, but with desire to change the way we do business. We must innovate, and use our spirit to take advantage of this change.

We are entering a new economy. One that is much less reliant on mammoth work forces, but on independent collaborators. Creative entrepreneurs are leading the charge into this highly inventive world. It will be exciting to see Milwaukee emerge from the shadows in the coming decade.

Wisconsin should establish the creative industries as a targeted area of focus for development. There should be better incentives for art and design entrepreneurs to take full advantage of the transition. All the pieces are there to jump start our economy; an economy led by creative professionals.