Enough with campaign bickering on job creation

It is a mixed blessing that Wisconsin’s politicians and journalists are making job creation the number one issue in the race for the governorship.

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Gov. Scott Walker and former Commerce Secretary Mary Burke, his Democratic challenger, have been trading criticisms of the other’s track records on new jobs. It comes off as bickering. They mostly frame statistics to make themselves look good and their opponent look bad. It is a short-term numbers quarrel.

The underlying reality, though, is that Wisconsin’s economy, as measured by GDP share, has been slipping in comparison to the national average for four decades or more. It has been a slide since the Wall Street Journal hailed Wisconsin as Star of the Snowbelt in 1977.

The point is that the tit-for-tat numbers argument about which administration lagged the nation more or less is pretty shallow. Job creation is a long-term proposition that requires a long-term commitment. It requires organizing concepts, smart strategies and stubborn execution. It has to be viewed as evolutionary, involving more than one administration. It should be largely bipartisan, like support for education.

3933e56149b1af1e44b7f845b658f569Gov. Walker has some abiding concepts that he thinks work to boost Wisconsin prosperity over time. Those include fiscal prudence and budget balancing at the state level; tax cuts, even though his have been small ones; and regulatory reform. That was his MO when he was county executive, and it still is. His new Wisconsin

Economic Development Corporation, a public-private effort, got off to a rocky start but is proving to be very responsive.

Burke has drafted a comprehensive job creation document and stresses entrepreneurship, the source of most net new jobs in the state and country. She grew up watching her father grow Trek from nothing to a global bicycle manufacturer. She launched a startup of her own early on.
Still, the state has lagged on business dynamism – measured by business births vs. deaths and healthy churn in labor markets – under Democrats and Republicans.

I see the jobs debate, centered on Walker’s 2010 pledge to create 250,000 jobs, as a mixed blessing because the issue deserves more serious thought and action. Other states and countries are gearing up programs that are called “technology based economic development.”

The best and longest running scorecard for state innovation and technology strategy is the “State New Economy Index’ now published by the Information and Technology and Innovation Foundation (ITIF). Wisconsin ranked 37th in 2002 and moved up to 30th among the 50 states in 2014. There’s some progress there, but Minnesota and Colorado prove that states in the central U.S. can do much better.

The Index is based on 25 different metrics, and Wisconsin ranks low or in the middle of the pack on most of them. We are in the bottom 15 for entrepreneurial activity, number of fast growing firms, export focus, immigration of knowledge workers and foreign direct investment. We break into the top 15 for two IT metrics, prevalence of health care IT and reach of broadband communications.

Other than a few hip shots, the pundits aren’t of much help either as they comment on the governor’s race (include this column if you like.). One said the 250,000 goal for Walker’s first term was “implausible,” even though a lackluster 2.1% rate of job growth, the national average over the last four years, would have gotten the job done. We’re running at an anemic 1.2%.

Another called for more public spending, a formula somewhat discredited by the massive spending at the federal level and the weak recovery from the Great Recession.

In short, there are slap-shot ideas on economic development all over the political map. The most coherent strategies are emerging at the regional level in Wisconsin. Collaborative regional councils, made up of leaders from government, business, non-profit agencies and education, are hammering out organizing concepts that have a chance to work. Further, they have the boots on the ground to execute the strategies.

In general, the regions are using two concepts: support for winning industries (clusters) and New Economy innovation. Take Milwaukee 7 as an example: It is focusing on its driver export industries (clusters), such as advanced manufacturing, automation and controls, food and beverage, financial services (under-supported and under-appreciated in Wisconsin) and medical devices.

M7 is also promoting emerging clusters like fresh water technologies and energy storage.
Beyond that, M7 leaders are pushing the New Economy boundaries by seeking more dollars for research and development (now at more than $300 million in the region), for co-location of intellectual assets at places like the new Innovation Campus for UW – Milwaukee and for more high-growth startup companies.

Critics of M7 would say its strategies haven’t worked since it launched in 2005, and they have a point, because Milwaukee’s glacial job growth is still dragging down the state average. Supporters would say you can’t turn a battle ship on a dime; give the M7 strategy time.
Here’s how ITIF described economic advancement in its 2014 report:

“In essence, the evolutionary (economic) environment went from one where the United States was dominant in generating new industries to replace the ones that were moving first to low-wage regions in the U.S. and then to low wage nations, to one where the competition for leading-edge evolutionary ‘replacement species” became much stiffer. As a result, it s has become more challenging for America to develop new industries, products and services to replace the more mature ones lost at a more rapid pace to low-cost nations.”

ITIF would apply the same logic to states. It then shows a high correlation to high state scores on its Index and their growth in GDP.

Wisconsin has seen the success, and the pain, of New Economy dynamics. Health care technology has moved from industrial x-rays at Allis Chalmers to the most advanced medical devices at GE Healthcare, to information systems at Epic Systems and GE.
The transformation, which took place over decades, is reflected in Wisconsin’s top ten ranking for Health Care IT in the Index.
If you accept cluster theory and New Economy strategies, wouldn’t it be great to hear Walker and Burke say they would, if elected, create a Center on the Wisconsin Economy to analyze and track New Economy and cluster metrics and a Council of Wisconsin Economic Advisers to steer the good ship Wisconsin to clear air. (We can’t even get current, accurate jobs numbers.)

No governor has done that.

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  • The Bystander

    John:
    Instead of waiting for Governor Walker or Ms. Burke to create a mechanism for job creation why don’t you take personal responsibilty and create jobs yourself? In your role as Chairman of Serigraph Inc., why don’t you commit to bringing back to Wisconsin 10% of the jobs you’ve moved to Mexico, China and India in recent years? That would be a productive start to addressing the chronic lack of employment in our state. A little less pontificating and a little more direct action on your part would be more productive.

  • JohnTorinus

    Thanks for the constructive comments. As reality would have it, Serigraph has added 130 jobs in the past year. We moved into a new technology. We are having a hard time hiring; are you looking for work? We will be adding more jobs in the coming year.

    FYI: We did close two plants in China; we went there to serve our global customers over there. Couldn’t make it work. Would you prefer that U.S. companies not be players in global markets? Seems a little myopic and jingoistic to me.

    A further FYI: I helped started an early stage investment fund and am helping fast-growth startups to get up and running. As you may know, all net new jobs come from startup companies. Instead of standing by, would you like to invest? It’s a piece of cake.

    • Mike

      So John how many of those 130 jobs last year you claimed Serigraph added were through an employment agency like Seek where the person gets paid like 9 dollars an hour with no benefits? There are lots of those jobs out there to choose from. It seems to me your company over the years has eliminated jobs and then tried to hire people with less experience for less money. In other words I won’t recommend anyone to your company!!!

  • NewWisGov

    Scott Walker has had 4 years to do as you ask, but has not done it. What you are asking for sounds a lot like what Mary Burke lays out in her “Invest For Success” jobs plan. We have a smart population with low cost of living. No reason Wisconsin can’t succeed in the digital age. Falling to 37th place for jobs in the most accurate QCEW jobs report is not good. Scott Walker borrowing billions to “balance” budgets is not good. Time for a change.

    • Mike

      And yet you gave the Jim Doyle- Mary Burke administration 8 years of nothing but failure. Where was your outrage then?

      • NewWisGov

        I don’t blame local Democrats for the effects of the national crash like Scott Walker. #WalkerTricks

        • Mike

          And you sir are a complete moron!!!

  • Dty in Lodi

    I appreciate your even-handed approach at commentary on this and many topics. It’s a good indicator that you are NOT a politician!
    I’d be curious as to your take on whether Wisconsin lagging in overall economic and job growth ever can be addressed in our highly mobile society that craves factors that Wisconsin cannot offer. Time was that a person finished their education, started a career and family and pretty much stayed in the same general area for 30-40 years. That doesn’t happen today. I’m 45 and have been lucky enough to change “career paths” within my own employer for 23 years, but most people my age and younger pick and move everything – job, house, family – every few years, and the moves can be drastic.
    Just as we’ve seen with professional sports free agents, Wisconsin just isn’t a preferred destination, mostly for reasons that have nothing to do with job availability. My younger brother moved from Indiana to Georgia for a job and didn’t ever consider Wisconsin because of the weather. A nephew took his first job in Wisconsin but then sought and received an in-company transfer to the Bay Area to live the California life. A younger cousin prefers urban areas like DC with more developed transit since she prefers not to own a car – that at least is a public policy consideration that differentiates Milwaukee from places like Minneapolis.
    Wisconsin’s a great place to settle down, raise and educate a family and have a quiet retirement – but that’s not what today’s 25-40 year old job seekers want. On the other hand, I don’t think Wisconsin should artificially try to create environments – we are what we are. Perhaps we just need to be satisfied with slow and steady. We need to sustain, but we shouldn’t necessarily expect to grow.
    Reaction?

  • JohnTorinus

    We can’t do much about the weather, except to teach everyone of the joys of cross country skiing, snow-mobiling and ice fishing. Global warming might help, and it might make Georgia even hotter and California even drier.

    My own view is that we can keep a good percentage of the young hot shots if there are great jobs here. Most people move for careers, not the place. Look at the people flocking to North Dakota for energy jobs. So, let’s get a lively entrepreneurial scene going with lots of startups, innovative new technologies, university interaction, multiple job opportunities for talented people, great schools tied to the startup economy and a bouyant attitude.

    A lot of that is already happening. We are not at lift-off yet for a startup economy, but we are moving down the runway.

  • Bob Keith

    Moving a giant segment of our economy overseas, fighting perennial wars, and twice and possibly trice electing the most contentious Governor in decades, has destroyed an entire layer of Wisconsin life, culture, and its people / workers. I find your casual chit-chat about it disturbing at best. There is an entire sub-culture in Wisconsin that lives the truth. To this huge sub-group, health care (sick people) is our number one industry now. The export of our children after graduation (education) to better states and countries for work, is our second industry. Our third dominant industry is fast food and alcohol (over-weight people and drunks). And the fourth estate is the economy of government supplemental income (child support, food stamps, unemployment, disability, and social security). Wafting through it all for years has been non-benefit, service industry, part-time work, for said huge sub-culture. You guys can pontificate from on high, but to many of us locked in this hell now probably for the rest of our lives, your words are hollow. I would not move a company or risk moving to a state for a job with such a long-term institutionalized bleak timbre and economic template.

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  • colin scanes

    Bravo John another great blog

    It’s not the
    weather!!! It’s us.

    Issue 1:
    Wisconsin has relatively low per capita income and mediocre business competitiveness environment (ranked as C minus by the Economist)

  • colin scanes

    Problems in Wisconsin
    1. Political polarization and ideological rigidity
    2. Inertia and complacency (“we’ve always done it this way!”)
    3. Little attention to problem solving (blame the Governor – either Party!
    4. Neither Democratic nor Republican administrations fostering a business environment with smart regulations
    5. Milwaukee not the economic engine compared to Minneapolis, Des Moines Madison or Green Bay

    Examples of problems with regulations
    1. The complexity and rigidity of State agencies and UW System working under Civil
    Service regulations
    2. Costs of State buildings
    3. Gasoline prices in Wisconsin are higher by 15-25¢than Iowa I believe due to Wisconsin State law

    Could it happen in Wisconsin? Minnesota ‘unsession’ dumps 1,175 obsolete, silly laws

    • JohnTorinus

      I agree that we have many unconstructive attitudes here that have to be changed. That’s what good leaders do: change mindsets and get things done.