March 2010, My View
Manufacturing resurgence can lead Wisconsin’s recovery
Manufacturing Michael Klonsinski • WMEP
Despite the challenges of a deep recession, tight credit and fierce global competition, Wisconsin manufacturers are finding new ways to survive, thrive and in some cases create jobs.
As we move from recession to recovery, it’s an opportune time to renew our support for manufacturing, the state’s largest industry and wealth creator. Manufacturing represents 20 percent of Wisconsin’s economy and employs 434,000 citizens in jobs that pay good wages and benefits. The industry’s $24 billion annual payroll supports families, communities and keeps cash registers humming across the state. Manufacturing also supports thousands of jobs in related industries such as transportation, logistics and services.
Wisconsin is a global manufacturing leader, home to some of the best-known companies in the world. Simply put, we know how to make things, from technologically advanced medical equipment to legendary motorcycles to the armored vehicles on the frontlines in Afghanistan.
Yet we’re at a critical crossroads. One road leads to a revitalized manufacturing sector that will position Wisconsin as a global manufacturing leader to promote growth, prosperity and job creation. The other leads to an inexorable erosion of our manufacturing base, continued job loss, a diminished standard of living and lower tax revenues. The choice is clear. Here are some ideas to move forward:
Drive innovation: Most people equate innovation with entrepreneurs and lab scientists, yet the most fertile ground for innovation is within the walls, people and culture of our manufacturing firms. Even the most traditional manufacturers are capable of adding new features to existing products, or using their core competencies to develop new products. A recent study revealed that only 27 percent of Wisconsin firms surveyed derived more than a quarter of their annual sales from products developed in the last three years. We should target increasing that number to 50 percent by 2015.
Grow exports: The fastest way to net wealth creation is to export products. This becomes even more important as we recognize that markets outside the U.S. are growing much faster than markets within our borders. Roughly three quarters of world purchasing power and nearly 95 percent of world consumers are outside of America’s borders.
Wisconsin has a strong track record on exports, but many manufacturers remain on the sidelines. More than half of 500 firms surveyed in the Wisconsin Next Generation Manufacturing Study reported making little or no progress on the global stage. That tells me one, we’ve got our work cut out for us; and two, the upside potential is almost limitless. Our goal should be to double the number of Wisconsin firms exporting by 2015.
Shatter myths: Efforts to attract a new generation of manufacturing talent are hindered by out-of-date stereotypes that manufacturing is dark, dirty and dangerous. A recent national survey found that although 71 percent of Americans viewed manufacturing as a national priority, only 17 percent of respondents would recommend a career in manufacturing to their children. The reality is that manufacturing offers desirable, well-paying jobs in many fields, including engineering, international sales and marketing, technology and production as well as opportunities for entrepreneurial owners and executives.
Think big: Wisconsin’s manufacturing industry is strong, vibrant, technologically advanced and diversified, but we cannot rest on our laurels, or aspire to be “just as good.” In the recovery, competition for manufactured goods is intensifying. Gaining a competitive advantage over other states, regions and countries requires a departure from conventional thinking and traditional approaches. Let’s raise the bar and develop new ways to drive innovation and sustainability, stimulate R&D investment and attract the next generation of talent necessary to compete and win.
A revitalized manufacturing sector is the fastest route to job recovery, wealth creation and deficit reduction in the state.
Michael Klonsinski is the executive director of the Wisconsin Manufacturing Extension Partnership (WMEP). For more information, visit www.wmep.org or call 1-877-856-8588.