Questions Answered: Wisconsin Economic Future Study
JULY 30, 2013
WEDC, Wisconsin Manufacturing Extension Partnership (WMEP) and Milwaukee 7 partnered to conduct the Wisconsin Economic Future Study. The results were released June 18, 2013, to identify key industries that drive economic growth statewide and within seven Wisconsin regions. This study identifies the changes Wisconsin’s driver industries experienced from 2005-2011.
Why was the study done?
The Wisconsin Economic Future Study was done to assess Wisconsin’s competitiveness of its driver industries compared to competitive states and the United States. The first study was done in 2005 to benchmark the state’s driver industries. This new study was needed to provide updated data after the recession on industry growth performance and challenges and opportunities for the driver industries in the areas of exporting, innovation, and workforce.
Who conducted the study?
The Manufacturing Performance Institute (MPI) completed the study. MPI was selected because it did the study in 2005 for the Wisconsin Department of Commerce and to provide consistency in data analysis in order to draw comparisons compared to the 2005 report.
What was the methodology used in the study?
The study looked at several factors of industry sectors, mainly competitive advantages, output growth and gross product. The economic drivers identified in the study are those that have concentrations that afford them a competitive advantage.
The study categorized sectors using North American Industry Classification System (NAICS) codes, which meant many specialized business sectors didn’t have their own segmented code or may have been captured as part of a larger sector. Because of this, the report in no way diminished the opportunities and assets of other important and growing sectors of Wisconsin’s economy, like healthcare, financial services and technology, to name a few.
The seven regions in the study are defined by the Bureau of Economic Analysis and were used to maintain data comparison consistency between the two reports.
What were the key findings of the study?
- Wisconsin has 37 statewide driver industries (compared to 24 in 2004).
- Regionally, there are anywhere from 12 to 41 driver industries identified in seven regions of the state.
- Wisconsin manufacturers face a shortage of skilled talent in advanced manufacturing, one of the most important factors for long-term success of Wisconsin’s driver industries.
- Wisconsin manufacturers’ advancement of innovations lagged the eight competing states and the United States. The study showed a positive correlation between technology-intensive industries and an increasing rate of growth in gross state products.
- States whose economies have a heavy concentration in manufacturing, such as Wisconsin, can be expected to thrive in the evolving global marketplace, provided that organizations and entities that govern and support them recognize the opportunities now emerging.
What did the report say about other sectors of Wisconsin’s economy?
The report focused heavily on concentrations of industry sectors within regions. While some other sectors like technology, financial services and healthcare were identified as regional driver industries, they may not have been identified as state driver industries, even though they play important roles in Wisconsin’s economy.
Because the study used NAICS codes to categorize industries, many specialized business sectors didn’t have their own segmented code, or may have been captured as part of a larger sector. The report in no way diminished other important and growing sectors of Wisconsin’s economy.
How will the study help WEDC and regions in strategic business development?
The study will help WEDC and its regions understand its economic drivers in order to develop strategies to leverage investment in these key industries.
What recommendations did the study make?
The study concludes that statewide, collaborative actions are required for Wisconsin to claim its place among the world’s elite business locations. Not only do these recommendations hold true for just the 37 driver industries identified in the report, but they hold true for many other key sectors where Wisconsin has opportunities, assets and advantages.
- Nurture driver industries, concentrating state and regional economic development efforts on strengthening driver industries and the industry clusters around them.
- Create an ongoing “Economic Future” structure that helps businesses foster and sustain improvement.
- Address the real and perceived skills shortages in the state.
- Establish a legislative approach that examines policies affecting driver industries and industry clusters, identifying the programs that constituents can and will support, with the goal of developing a broad package that supports Wisconsin business.
How much did the study cost?
The study cost $280,000 and was paid for by WEDC, WMEP and Milwaukee 7. WEDC’s share was $160,000.