Wisconsin is in a constant state of angst about its economy. That’s apparent every time the feds issue a monthly or quarterly jobs count; when the Legislature hammers away at its own economic development agency; or when a fresh report on Wisconsin’s economic performance is unveiled.
We love to fret about how we’re doing — and to beat ourselves up over it.
Self-flagellation may have its purposes, but it’s pointless unless it produces different behavior. Floggings to improve morale haven’t been in vogue since the British Royal Navy ruled the seas.
Read this commentary in the Milwaukee Journal Sentinel here.
Some of our Badger State angst is misplaced because Wisconsin controls only a portion of its own economic destiny. The state represents about 1.84% of the nation’s population and a similar percentage of the U.S. economy — and a mere fraction of the world’s economic output. Trends, markets and events well beyond our borders help determine whether Wisconsin’s economy is “low-growth” or “high-growth” over time.
There also are limits on what state government, or any government, can do. Governments do not “create” jobs — except within their own workforce — but they can help set a productive tone. That includes occasionally targeting incentives to exploit indigenous strengths.
The Legislature did so this month when it voted overwhelmingly to approve a state-leveraged fund to co-invest with private funds in emerging companies, especially in “high-growth” sectors such as information technology, engineered products, agriculture, advanced manufacturing, medical imaging and medical devices. Those are sectors where Wisconsin has home-grown advantages, although far from fully developed.
More must be done, however, for Wisconsin to compete in a global economy that increasingly values innovation and knowledge. Some recent studies have pointed the way.
■ The “Vital Signs” report released June 21 by the Greater Milwaukee Foundation noted the Milwaukee region scores fairly low compared with other metro areas in terms of its “high-tech location quotient.” That’s a measure of technology-intensive industries.
■ In a June 19 report on Wisconsin’s 8-year-old tax credit program for angel investors, the Wisconsin Economic Development Corp. noted progress in the total amount of credits issued and the number of companies supported. “While our legacy is impressive, Wisconsin needs new businesses based on technology and innovation to remain competitive in a global, technology-driven marketplace,” the report said.
■ The annual “Wisconsin Portfolio” report, issued June 3 by the Wisconsin Technology Council and its Wisconsin Angel Network, reported that 2012 angel and venture capital investments in the state climbed over 2011 even as national trends were down. It also highlighted sectors where investors have spotted opportunities.
■ In 2010, a report titled “Be Bold: The Wisconsin Prosperity Strategy” recommended strategic investments in the state’s entrepreneurial sectors, expansion of funding pools for new businesses, promotion of “driver, cluster” industries and accelerated technology transfer from the state’s academic research hubs.
What are Wisconsin’s potential “driver” industries in the tech sectors? Here are examples:
■ According to the latest TechAmerica Foundation survey, Wisconsin is the third largest state for electromedical equipment jobs at 6,200. Only Minnesota and California have more jobs in that sector, the foundation reported. A separate study by Charles River Associates shows Wisconsin is one of the top five states for direct jobs in medical imaging, with an estimated 6,920 people employed in the manufacturing, selling and servicing of computed tomography, magnetic resonance imaging and other equipment.
■ Wisconsin ranks 9th nationally in electronic components manufacturing with 7,000 jobs.
■ Wisconsin ranks 10th in software publishers with 8,300 jobs.
■ Information technology jobs are spread across all sectors. A few years ago, the Milwaukee Institute reported there were 250,000 IT jobs statewide, embedded across every sector. The Cyberstates survey, which is focused on tech-intensive companies, showed 86,000 jobs in 2012, up from 85,200 in 2011. That’s 3.8% of Wisconsin’s private workforce and 20th among the states.
■ Tech companies followed by Cyberstates paid $5.9 billion in payroll in 2012, or 6.5% of all private sector payrolls in the state. Why? Because those jobs pay more, on average. That was good for 22nd among the states.
■ Biotechnology in all forms, including medical biotechnology, bio-agriculture, bioproducts and biofuels, account for about 25,000 jobs in Wisconsin. While private investment in medical biotech is down, Wisconsin was one of 34 states to gain biotech jobs in the last decade and one of eight to show 5% or more growth from 2007 to 2010, according to the Battelle Bioscience Industry report.
Wisconsin’s internal floggings can continue, or the state can build on what multiple sources have recommended. Guess which choice hurts less and produces more?