Madison -- Thirty years ago, Nick Seay moved here -- to a city he had never seen -- and joined a handful of patent lawyers working in this relatively small university town.

Today, Seay is one of more than 80 registered patent lawyers in Madison and is a key player in the commercialization of embryonic stem cells, one of the most cutting-edge scientific technologies on the globe.

It was Seay who wrote the potentially lucrative patents that were filed after University of Wisconsin-Madison scientist James Thomson in 1998 became the first person to isolate human embryonic stem cells. The patents, currently being challenged by two foundations on the coasts, are so broadly written that many experts believe Wisconsin will be entitled to a cut of profits from all therapies developed using the cells.

The patents, and continued research at UW by Thomson and others, have vaulted Wisconsin into the top echelons of embryonic stem cell research, which scientists say has the potential to lead the way to cures for diseases such as diabetes and Alzheimer's.

For all their potential, though, stem cells are just the tip of the iceberg when it comes to Madison's exploding knowledge-based economy.

"In my lifetime, the world has changed from 'how are a few patent lawyers going to support themselves' to a yeasty brew of biotech and other technology-based companies," said Seay, who works in the Madison office of Quarles & Brady and is chief operating officer for Cellular Dynamics International, a company started by Thomson and two other UW researchers.

"I know companies now that are spin-offs of spin-offs, and you know your tech sector is doing well when you have that going on," Seay said.

Nowhere is Madison's growing technology company infrastructure more apparent than at University Research Park, where Cellular Dynamics has its offices. The park has been home to younger versions of some of Madison's biggest success stories -- companies such as Epic Systems Corp., which makes electronic health record computer systems; TomoTherapy Inc., which makes radiation and imaging equipment; and genetic test maker Third Wave Technologies Inc.

The park is the commercialization center for UW's technology mother lode. That commercialization is lacking in other cities and regions that aspire to expand their tech industries.

Key growth has been seen in the genetic tools industry, a field populated by companies such as Promega Corp., Mirus Bio Corp., NimbleGen Systems Inc. and Renovar Inc. Also evolving is a drug development effort that includes Deltanoid Pharmaceuticals Inc., QRG Bioscience LLC and others, and a small but growing nanotechnology cluster that includes Imago Scientific Instruments and Platypus Technologies.

"Cities like Milwaukee, Green Bay and Marinette have Madison-envy -- and they have to quit complaining and take advantage," said Joseph W. Boucher, a business lawyer with Neider & Boucher, a firm that is headquartered in University Research Park and works with many of the emerging companies there.

A lot of old industrial cities sit on old money instead of deploying it into emerging ventures as is being done in Madison, Boucher said.

Pairing research, management

Madison wasn't always so entrepreneurial.

UW for decades has been a life sciences research giant. But it is only in the last decade that Madison's research has been coupled with the management talent and money needed to create successful companies.

"When you think of the land grant universities, Wisconsin is far and away out there in terms of engaging industry and pushing commercialization relative to most of the Big Ten," said Walter H. Plosila, vice president of the technology partnership practice at Battelle, a Columbus, Ohio-based consulting and laboratory management company.

The university, with about $764 million of research spending, was the fourth-biggest academic research institution in the country in 2004, the last year for which the National Science Foundation compiled figures.

Only Johns Hopkins University, the University of California at Los Angeles and the University of Michigan system have more research spending. UW's research spending far exceeds that of any other school in the Midwest -- and is just $136 million lower than the combined spending of Northwestern University, the University of Chicago and the University of Illinois at Chicago.

"It's real technology that can be turned into real companies and applications, and that all turns into jobs," said Paul E. Purcell, chairman, president and chief executive officer at investment firm Robert W. Baird & Co. Inc. in Milwaukee.

More high-tech jobs

About 9% of Madison-area workers, or 26,500 jobs, are in high-tech industries, according to the 2006 Greater Madison Area Directory of High-Tech Companies, which is published by Madison Gas & Electric Co. and the City of Madison.

The area has seen a 15.2% increase in the number of high-tech jobs and an 11.8% jump in the number of high-tech firms -- to a total of 475 firms -- for the five years ending in 2005, according to the directory.

In the late 1980s, when Madison Gas & Electric got involved in helping build University Research Park and creating the directory, there were 125 high-tech companies that employed about 5,000 people, said Jim Mohrbacher, business development manager at MG&E.

Now the 110 tenants at University Research Park alone employ more than 4,000 people, and the average annual salary of workers in the park is $60,000, according to a survey done in 2004 by park administrators.

The park has helped 70 companies get off the ground and is nurturing at least 10 more that have moved in this year to its incubator facility, called the MGE Innovation Center, said Mark D. Bugher, the park's director.

Incubating businesses

The park, started in 1984 by the university and state government, isn't the only one in Madison that is incubating new high-tech companies.

The Technology, Education and Commerce (T.E.C.) Incubator Center, affiliated with Madison Area Technical College, has space on Madison's east side for up to 20 young, technology-focused businesses.

The Fitchburg Technology Campus on 120 acres in a suburb bordering Madison's southwest side has 90,000 square feet of space for emerging technology companies and is becoming a center for nanotechnology businesses.

The Madison area, with slightly more than a half-million people, is too small to show up on lists of well-known biotech clusters such as San Diego and Boston. Yet when factors such as federal funding, biotech patents filed, and the number of biotech companies are calculated per capita, Madison is a biotech powerhouse that rivals them, said Trevor Twose, CEO of Madison-based Mithridion Inc. and head of Biopons Inc., a consulting firm.

For example, the number of molecular biology patents per capita filed from Madison is 6.4 times the national average, Twose said. For San Diego, it's 6.1 times the national average, he said.

"Madison is the strongest cluster of biotech in the upper Midwest," said Twose, who before coming to Madison a few years ago was involved with biotech companies in the United Kingdom and on the U.S. coasts, including one early leader in DNA fingerprinting.

"We in Chicago look to Madison as a jewel to our north," said Peter Balbus, managing director at Pragmaxis LLC, a Glen Ellyn, Ill., consulting firm that helps people commercialize technologies.

Madison's challenges

Madison's biggest challenge is getting enough money to fund its technology wealth.

It has been possible to create tools companies with $5 million or less of outside funding, but drug companies can require $30 million or more of venture capital funding to be successful enough to be bought or go public, Twose said. Despite its technology, Madison is just about average for receiving venture capital funding per capita, while San Diego is at 13.7 times the national average, he said.

The other challenge is finding experienced managers to run the emerging tech companies in a city that has not historically been viewed as pro-business. Tech managers worry that if they join a start-up in Madison and it's sold five years later, they won't have enough options at other companies, said Walter Dewey, senior portfolio strategist in the Madison office of U.S. Bancorp Private Asset Management.

As more companies emerge, that becomes less of a problem. And UW's new master of science in biotechnology is helping deepen the management bench, Dewey said.

"It's almost like we've got very fertile fields with lots of seeds, and we decided they could be watered -- that's what's happening," he said.