HomeOur Economy 2023Our Economy 2023: Wisconsin, USA

Wisconsin, USA

Wisconsin is one of the inclusive productivity case studies for Our Economy, with the main focus being on the three metropolitan areas of Milwaukee, Madison and Green Bay and the North Central Wisconsin region.
 

Overview

Wisconsin is the United States 25th largest state by land area (54,167 sqm) and 20th by population (5,892,539).[1]

The state’s diversified economy is led by its primary sectors of manufacturing, agriculture and tourism. These sectors are facilitated by favourable climate and topography and a southern industrial manufacturing belt that includes Milwaukee, making it one of the largest manufacturing states in the country.[2]

Given the size and scale of Wisconsin, economic development is delivered at different spatial levels. This case study focuses in particular on the three metropolitan areas of Milwaukee, Madison and Green Bay as well as the North Central Wisconsin region that encompasses 10 of the state’s 72 counties as an example of a wider regional strategy.

  1. ^ US Census Bureau (2022) Quick Facts: Wisconsin. Available here
  2. ^ Brittanica (2023) People of Wisconsin. Available here

 

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Performance on key indicators

Wisconsin performs well on all three of our key indicators compared to the North East. Having started in 2008 with a considerably higher GDP per head, Wisconsin then saw a further 12% rise to 2018 compared to just 4% in the North East. By 2018, North East England had therefore fallen further behind.

Over the same period, the economic activity rate did not change much in Wisconsin, while increasing by 1% in the North East. However, the starting postion in Wisconsin was much higher with more than 4 out of 5 adults economically active in the region compared to less than 3 out of 4 in the North East.

Finally, disposable household income per head in Wisconsin was more than twice that in North East England in 2008. Both regions. saw disposable household income per head rise by 17% between 2008 and 2018.

12%

Between 2008 and 2018, GDP per head rose by 12% in Wisconsin, compared with an increase of 4% in North East England.

Policy priorities 

Governmental structures within Wisconsin are complex. The state has 3,096 governing authorities at different spatial levels, the 11th-most in the country and of which around 700 have been gained since the 1970s. 1,924 of these are “general purpose” governments, (72 counties, 601 cities and villages, and 1,251 towns) differentiated by methods of revenue collection and their main responsibilities.

County-level bodies have responsibilities covering public safety and legal matters and health and social services whilst cities and villages are granted “home rule” under the state constitution, meaning they have the “broad authority…to govern themselves locally.” This allows for more autonomy in aspects not handled by state government or specifically assigned to counties, such as police, fire and emergency medical services, water, sewers, libraries and parks.[1]

  1. ^ Wisconsin Policy Forum (2019) An Abundance of Government. Available here

Policy interventions and aims

At a state level, since the mid-1990s Wisconsin’s priorities have been generally directed towards efforts to aid small and minority businesses, add maximum value to raw materials before shipment out of state, promote tourism, and increase international trade and investment. However, development policies have varied across the wide range of governmental levels as discussed in the select examples below.

North Central Wisconsin Regional Planning Commission Comprehensive Economic Development Strategy (2014)

The 2014 development strategy notes that, like many economies, the region’s traditional economic drivers were its agricultural and natural resources, followed by industrialisation and a more recent transition to a service orientated market, leaving the North Central area with a diverse economy.

The strategy focuses largely on the generation of an entrepreneurially supportive environment as a means to retain its business base while increasing employment opportunities and attracting new firms to the region.

North Central Wisconsin’s approach aims to develop emerging industry sectors, to leverage strong industry clusters and to develop reliable data and transport infrastructure for businesses. The plans also incorporate the provision of financial and non-financial support to SMEs and startups, such as legal advice and education on securing grant and funding opportunities.[1]

  1. ^ North Central Wisconsin Region Planning Commission (2014) Comprehensive Economic Development Strategy (CEDS). Available here

Milwaukee 7 Framework for Economic Growth (2014)

Acknowledging the area's roots and an economy built on heavy industry, the 2014 framework denotes the global market shift towards knowledge intensive products and services. This change brings the threats of low growth rates, long term job losses and potential poverty to Milwaukee. Policy priorities for the city as a result are directed towards leveraging the area’s strategic location and assets. The city has strong industry clusters in:

Energy, Power and Controls – The city is home to global sectoral leaders, with a recently formed energy research consortium. A rise in US manufacturing is anticipated by local government to result in higher demand and reliance on the sector.

Water technology – With access to 21% of the world’s surface freshwater, five of the eleven largest water firms in the world, and a world hub of water tech research and policy, the city is well placed to capitalise on these advantages.

Alongside utilising sectoral strengths and aligning workforce development to these clusters, the framework aims to enhance SME’s export capabilities by using large firms as mentors.[1]

  1. ^ Milwaukee 7 (2014) Milwaukee 7 Framework for Economic Growth. Available here

City of Madison Economic Development Strategy (2016)

Madison’s Development Strategy highlights the success of the preceding decade with annual GDP growth of 6.5% from 2001 to 2012 (+$16bn). This growth in the state's capital is driven through a private sector and technology dominated industry despite the high levels of public sector employment compared to the rest of Wisconsin. The strategy, however, notes the continued deep racial disparities in economic opportunities and outcomes and the intrinsic link between a stronger and more inclusive economy.  

A main theme within the plan is the desire to cultivate diverse business start ups and increase the opportunities and survival prospects of new firms. The approach opts for policies to break down barriers to business ownership disproportionately created through difficult and complex legal systems. A priority project to this effect is the creation of a Business Assistance Team to act as a direct point of contact to navigate challenges such as licensing and improve business ownership opportunities for people of colour in the city.[1]

The strategy stresses the importance of working with different groups to boost inclusivity. This includes the Women’s Business Initiative Corporation, the Latino Chamber and the Black Chamber to connect minority-owned businesses to City-funded programmes, the University of Wisconsin, and micro-lending and crowdfunded finance.

  1. ^ City of Madison (2016) City of Madison Economic Development Strategy. Available here

Economic Development Strategic Plan (Greater Green Bay Chamber 2017)

While emphasis was placed upon building upon the region's manufacturing base for business expansion and the attraction of inward investment, a key focus was academic institutions and countering ‘brain drain’. The strategic plan highlighted the low levels of university enrolment and declines in academic R&D investments, with a target of increasing enrolment by 15,000 by 2023 and R&D investments to $5m by 2022 and $25m by 2030.

Priorities centred on encouraging University expansion (with an increased focus on R&D) and connecting academic institutions to employers to increase pathways to work. To achieve this, the chamber proposed the development of a centre of excellence and the development of a regional anchor institution strategy. In keeping with Green Bay's strengths in manufacturing the plan aimed to connect the two developing partnerships between colleges and manufacturing firms to meet workforce needs.

Green Bay’s lack of a diverse workforce was also a prominent feature within the strategic plan. The need to raise the profile of inclusive development and diversity across the region's partner organisations was reiterated alongside increased awareness of and connections to organisations that champion the needs of diverse populations. Anchors engaging in subcontracting that seeks out minority and women-owned businesses was also cited.[1]

  1. ^ Greater Green Day Chamber (2017) Economic Development Strategic Plan. Available here

What has changed since 2008 

Of the shortlisted areas included within this study, Wisconsin has evidenced good economic performance between 2008 and 2018 on key indicators such as GDP per head and disposable income. However, the state still faces some challenges.

Between 2008 and 2018, the gap in labour market participation between men and women widened, from an activity rate gender difference (female minus male) of 5.5 percentage points to 6.5 percentage points. Over the same period, the gender gap in labour market participation in North East England narrowed by 2.5 percentage points, though the gap remained wider in 2018 (8 percentage points) than in Wisconsin.

The proportion of 18 to 24 year olds in Wisconsin who are not in education, employment or training (NEET) was persistently at 10% or above between 2008 and 2018, with no improvement over this period. In comparison, the proportion of 18 to 24 year olds in North East England who are NEET fell by three percentage points, though it remained higher than in Wisconsin in 2018, at 16%.

Wisconsin has a relatively high proportion of 25 to 64 year olds with qualifications from tertiary education compared with North East England. Between 2008 and 2018, this proportion rose from 38% to 45%. North East England saw a comparable increase (8 percentage points, compared with 7 in Wisconsin) over this period, and 34% of 25 to 64 year olds had tertiary qualifications in 2018.

Since the COVID 19 pandemic, Wisconsin has performed comparatively worse than most other areas of the USA. As of December 2022, Wisconsin experienced some of the slowest economic growth in the country, largely attributable to the shrinking of output in key sectors of agriculture, construction, manufacturing and finance. Wisconsin suffered from the fifth worst economic growth in the quarter across the 50 US states.[1]

In its largest metropolitan area of Milwaukee, there has been positive growth in educational attainment and the concentration of science and technology employment. However, innovation and economic metrics trail national averages, likely resulting from a high density of large enterprises with slow growth.[2]

  1. ^ Wisconsin Technology Council (2022) Wisconsin GDP growth among slowest in the country in Q3. Available here
  2. ^ Milwaukee Journal Sentinel (2022) Metro Milwaukee's economy earns a mixed report card. Available here

Caveats and conclusions

Given the size of Wisconsin and the devolved approach in government, there are challenges in drawing learnings from the state that are applicable to the North East. There is a risk that analysis of smaller units of government may compartmentalise economic development and act under the assumption trends are statewide.

The review of economic strategies from three separate metropolitan areas and one regional plan (and similarities in size between these metro areas and the North East) provides an introduction to different policies beneath the state level, but the geography of the state is still a caveat. 

Overall, the economic performance of Wisconsin post 2008, when many other economies and regions have struggled, is impressive. The high levels of degree level qualifications in the population suggest that a highly skilled workforce may help explain some of the region's resilience, while the degree of autonomy afforded to particular cities has also allowed development strategies to focus on local sector strengths in the major conurbations in the state.

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