By: Tom Still
MILWAUKEE – In many ways, the latest report from the Brookings Institution is a Wisconsin version of “A Tale of Two Cities.”
“America’s advanced industries: New trends” examined economies in the nation’s largest metropolitan areas — including Milwaukee and Madison — and ranked those top 100 cities in terms of production of goods and services and job creation by tech-heavy industries.
Madison’s economy appears to be gaining momentum, based on the Brookings rankings, while Milwaukee’s comes across as relatively flat. Read the full Journal Sentinel article here.
The trick for Madison is not to become over-confident, and the lesson for Milwaukee is to continue down the path of diversifying its economy.
“Advanced industries” were defined by Brookings, a respected public policy think tank, as the top 50 industries in terms of spending on research and development and with the largest share of employees in the STEM (science, technology, engineering and math) fields.
The top 50 include 35 manufacturing, three energy and 12 service industries. They are advanced manufacturing industries such as aerospace, auto, medical devices and pharmaceuticals; energy-oriented industries such as oil and gas extraction and electric power generation; and high-tech service activities such as computer system design, R&D services, software and telecommunications.
With a diverse base that includes software, engineering, computer systems design, biotechnology and tech-heavy manufacturing, Madison ranked high in the Brookings index for production output as well as jobs created.
Ranking about 85th in size among the top 100 cities, Madison was 49th in total advanced industry jobs (44,143), 16th in advanced industry share of all jobs (11%), and 11th in the annual average percent change (6%) in advanced industry jobs from 2013 through 2015.
Madison was bracketed by Provo-Orem, Utah, and Austin-Round Rock, Texas, in the two-year growth rankings.
Milwaukee ranks around 30th in size and was 30th in advanced industry jobs (85,896), 27th in advanced industry share of all jobs (9.9%), and 69th in the annual average percent change (0.7%) in advanced industry jobs from 2013 through 2015.
Milwaukee’s neighbors in the Brookings two-year growth rankings were Colorado Springs and Baltimore-Columbia-Towson.
While Milwaukee’s growth was much slower than Madison’s, much of the difference can be explained in terms of downturns in the global economy. Layoffs at Joy Global and Caterpillar, two mining equipment manufacturers, contributed significantly to the region’s flat job-creation rate. A strong dollar means more export troubles could lie ahead.
The state ranked 29th overall in the Brookings report primarily because its two largest cities are the hub for half of the state’s 257,800 advanced industry jobs. Collectively, Milwaukee and Madison are home to about 130,000 advanced industry jobs that pay roughly twice what jobs in other sectors pay.
Keeping those jobs filled with workers who have the right skills is the challenge, however.
“STEM workers — from aerospace engineers and plant scientists to petroleum geologists, software developers, and skilled technicians — matter because they invent and install the technical innovations that sustain innovation and growth,” read the report.
“At the professional level, highly trained scientists and engineers keep firms and industries on the cutting-edge through inventions and entrepreneurship. At the sub-bachelor’s level, skilled technicians produce, install, maintain, repair, and operate the systems designed and patented by researchers, allowing firms and industries to reach their markets, maximize sales, create process innovations, and enhance productivity,” it continued.
The report recommended more investment in educating and training STEM workers.
“If Milwaukee is truly going to reposition itself as a city with an advanced industry economy, it will need to continue to re-engineer its training system,” said Mark Muro, a senior fellow and director of policy for the Metropolitan Policy Program at Brookings. Muro was a primary author of the report.
“And if Madison is going to keep up with the growth in its very diverse advanced industry sector, it will need to maintain its training systems to keep pace with other cities with which it competes,” he said.
Why do so-called “advanced industries” matter? They generate a disproportionate amount of the nation’s productivity, conduct 89% of all private-sector R&D, generate 80% of all private-sector patents and generally drive innovation. The sector is responsible for 60% of U.S. exports even though it represents about 10% of all jobs.
Wisconsin’s prosperity is tied to creation of more high-value industries and jobs. The Milwaukee region can help lead the way by focusing on clusters — power and controls, financial tech, the “connected factory,” software, water and health care — that will help set it apart.