What kind of jobs will help save Wisconsin?
If you follow economic news, you know that rankings and reports are issued at a dizzying pace. And you know such figures often contradict each other: One day, the economy is recovering; the next, it’s in a nose dive.
With that in mind, it’s always best to take any ranking with a heaping helping of salt. Nonetheless, having one of the nation’s premier business publications say your state is among the 10 worst states for business stings a bit. A couple of weeks ago, Forbes magazine issued its annual Scorecard for State Business Climates, the Badger State landed at No. 42. While that ranking may please those of us who are fans of Douglas Adams, having a basement-level ranking from the likes of Forbes isn’t the kind of number you tout in an economic development brochure. On its website, the magazine notes that Wisconsin still ranks No. 1 in cheese production, but it also makes this alarming statement: “job growth is forecasted to be second worst in the U.S. through 2016.” Ouch.
Wisconsin, critics say, is stuck in an outdated model of offering big incentives largely to old-fashioned firms such as manufacturers, while at the same time not doing enough to foster up-and-coming tech firms.
“Forecast, schmorecast and ranking, schmanking,” you might say. “Haven’t you heard that Wisconsin is open for business?” Yes, that’s true. As mentioned above, statistics can be contradictory, and Wisconsin and the Chippewa Valley are certainly doing well in some areas. But, as Capital Times business reporter Mike Ivey recently wrote in an extensive reflection on the state’s economy, Wisconsin seems to be lagging in critical areas. The title of his article sums it up well: “Sinking with old economy: Wisconsin lags in developing 21st-century companies.”
Wisconsin, critics say, is stuck in an outdated model of offering big incentives ($1.5 billion annually in private business incentives, according to The New York Times) largely to old-fashioned firms such as manufacturers, while at the same time not doing enough to foster up-and-coming tech firms. In that regard, Ivey points to another ranking: The nonpartisan Information Technology and Innovation Foundation placed Wisconsin 31st among the 50 states in its “New Economy Index.” (The index gauges indicators in categories such as “knowledge jobs,” “globalism” and “the digital economy.”) As Ivey wrote:
While some places have been able to retool their economies for the 21st century — Pittsburgh, for example, in two decades has gone from a steel town to an “eds and meds” economy centered on education and medical services — Wisconsin has been slow to embrace a knowledge-based economy where brains count more than brawn.
“There's a lot of good stuff happening now in the business-to-business space but Wisconsin sort of missed out on the consumer technology boom of the 1990s and has been playing catch-up since,” says Mike Klein of WTN News, an online technology news service. ...
Rob Atkinson, president of the foundation and co-author of the report, says the challenge for Wisconsin remains shifting from its “branch plant” economy to one that can generate more successful startup firms in a variety of sectors.
“You've got to be able to create new companies because that is where the job growth is,” he says.
Like the rest of the state, for years the Chippewa Valley has straddled the line between the old and new economies. On one hand, the closure of the Uniroyal Goodrich Tire Co. plant two decades ago is a textbook example of the kind of job loss that has plagued Wisconsin, with well-paying manufacturing jobs disappearing, often because of technological changes or globalization. On the other, technology firms – from Cray to Hutchinson Technology Inc. – have long been major employers in the area. Others, such as JAMF Software, are up-and-comers. And, in some respects, the Chippewa Valley economic has reflected the “eds and meds” strategy cited above: According to the city of Eau Claire’s Economic Development Division, five of the top 10 employers in the Eau Claire area are medical or educational institutions. This probably explains why unemployment in Eau Claire tends to be lower than much of the state (though average wages are lower around here too).
The fact Ivey’s piece ran in the progressive Capital Times will no doubt lead some to write it off as a partisan screen against Republican Gov. Scott Walker, but the criticism of the state’s policies is bipartisan (and remember, Forbes is a pretty conservative magazine). As Todd Berry, president of the Wisconsin Taxpayers Alliance, says in the article, “Politicians on both sides of the aisle have never really grasped what drives job creation. The long and short of it is that what happens in Wisconsin is closely tied to the national economy and employers today are competing in an international marketplace.”
If you’re interested in Wisconsin’s economic future, or if you’d simply like some of the endless stream of economic statistics put into context, the article is worth a read.