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JohnLets Get Serious - Manufacturing is a critical part of the Wisconsin economy

Yamaha Motorcycle By John P. Stilp, P.E., Dean, MATC • 09/23/03 Editor's Note: This is one of the many letters and e-mails that we received after running John Byrnes "Let's Get Serious" column on July 17, 2003. See below for other related articles.

I read your article, Lets Get Serious, on the Wisconsin Technology Network webpage the week of Harley Davidson Motor Companys 100th Anniversary party here in Milwaukee. Your comment regarding manufacturing struck me the wrong way having been involved in Wisconsin manufacturing for the past 33 years and especially knowing that Harley Davidson, a manufacturing company that has succeeded by focusing on long term growth, high value added manufacturing and innovative labor management relationships, witnessed by their recent 100th year in business. There are other Milwaukee manufacturing companies that have been around longer and have remained in business by investing in technological tools in this knowledge-based economy.

Your views may be based on some erroneous assumptions regarding manufacturing. Here are some facts.

First, manufacturing is a critical part of the Wisconsin economy, employing well over 500,000 people and accounting for over 20% of our Gross State Product.

Second, manufacturing today is high technology. Nation-wide, manufacturers are responsible for almost two-thirds of all private sector R&D - $127 billion in 2002.

Third, manufacturing growth spawns more economic activity and jobs than any other economic sector. Every $1 of final demand for manufactured goods generates $0.67 in other manufactured products and $0.76 in products and services from non-manufacturing sectors.

Our state needs to get obsessed about the continual decline in manufacturing and be cautious of attempts to convert us to the rapidly expanding markets, such as biotech. Yes, there are opportunities in these new fields, but it would be a mistake to abandon high value manufacturing for the elusive lure of high technology industries and jobs that may or may not emerge. Equally important, do we, as a state, have the resources and the willingness to invest in the infrastructure that new technology industries require. Singapore, for example, faced with declining returns in electronics, is investing heavily into biotech. The government has released $2.3 billion dollars in investments and other incentives, in an effort to become a biotechnology hub. Is Wisconsin, with its current budget concerns, willing to make that kind of investment to become a world leader in biotechnology? Furthermore, over the last 20 years, Singapore has built up its manufacturing technology (yes, manufacturing technology is NOT an oxymoron), not taken the attitude that it cant do anything about the manufacturing decline.

During the 70s and 80s many states pursued the now discredited economic development theory characterized as smokestack chasing, attempting to attract new factories from other states. This simply didnt work because most new jobs are created by the retention and expansion of existing companies, not attracting new ones! What we need to do as a state is invest in our competitive advantage, our skilled workforce and high technology manufacturing sector, which is a cornerstone of the states economy, while also pursuing new opportunities that demonstrate potential for growth.

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John P. Stilp, P.E., is Dean, Division of Technology and Applied Sciences Milwaukee Area Technical College. He can be reached at stilpj@gwise1.matc.edu.
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Related Articles
Let's Get Serious, by John Byrnes
Wisconsin Manufacturing - demise or survival?, by Frank Borg
Let's Get About Manufacturing!, by Mike Klonsinski
Let's Get Serious, Another Look, by John Byrnes

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