NorthStar Economics and the Wisconsin Technology Council have released a report detailing the strengths of Wisconsin in the new economy and the difficulties that still need to be addressed to ensure the quality of the state’s future workforce.
Wisconsin Technology Council President Tom Still pointed out that other states such as New Hampshire and Massachusetts have lost 10 to 15 percent of their technology sectors while Wisconsin has held steady and even gained in certain categories.
By far, the state showed the most gain in scientific research and development, rising from 2,930 employees at 199 firms in 2002 to 3,272 employees at 207 firms in 2003. The average annual wage jumped from $51,794 to $58,945.
This increase in employment per firm stood in contrast to management and consulting services. Between 2002 and 2003, the number of such firms increased by 138, while the total number of employees increased by just 100. Overall wages held steady.
The telecommunications sector took a hit, the report said. Telecommunications services employment fell by 700 people in 2003, to 14,000.
Information sector employment dropped by over 1,000 in 2003, showing some trouble for the creative sector as well, though by 2004 estimates employment in the sector may have stabilized at about 50,000.
However, there will be challenges ahead in terms of the labor-force demographics, according to NorthStar president David Ward.
“We’re going to start declining in about five or six years,” Ward said. He pointed out that around 2012 the number of retirees will start to exceed the new workers coming in. “When that happens we need to have very productive workers.”
Ward contrasted Wisconsin’s economy with neighboring Minnesota. Ward attributed a per capita income that is $4,000 higher than Wisconsin’s to Minnesota having a higher proportion of college graduates in its workforce.
One lingering problem in Wisconsin is so-called brain drain, the tendency of the college-educated population in Wisconsin to shrink as measured against the national average. The NorthStar/WTC report found that there is still some cause for concern in this area. Among Wisconsinites 25 and older, the percentage with bachelor degrees or higher was 25.6 percent in 2004, compared to the national average of 27.7 percent.
While brain drain has been frequently mentioned as a serious problem for Wisconsin’s economy, Still argued that it is not sufficiently understood or properly defined. He said the percentage of in-state college graduates who stay in the state compares favorably with other Midwestern states, so brain drain is not a proper way to describe the problem.
“Where we have fallen short is attracting graduates from other states,” Still explained, blaming a failure to promote the state’s economy to outsiders. Still said that it is not a matter of keeping students in the state that Wisconsin has fallen behind in, but a failure to properly lure other college-educated workers to replace those graduates who do leave. “We don’t have a brain-drain problem so much as we have a brain-gain problem.”
Despite the deficiency in college graduates, college degrees alone are not the be-all and end-all of an educated workforce. Whereas the national average of high school graduates in 2004 was 85.2 percent, Wisconsin outpaced the country at 88.8 percent. Additionally, Still pointed out that Wisconsin has other educational institutions that can help fuel the economy.
“I think the tech colleges in Wisconsin are our secret weapon,” Still explained, pointing out that the technical college system produces a workforce trained for specific professions in the technology sector. In 2003 Wisconsin outpaced the nation with 8.3 percent of people 25 and older holding associate degrees, compared to 7 percent nationally.
Ward concurred on the strengths of the technical colleges, praising their working relationships with the private sector and the practice of having students do hands-on job training at businesses. Ward also noted the ability of the tech schools to seek out advice about changes in business fields and to respond to market conditions.
“[The tech schools] tend to have a little more flexibility in terms of gearing up and closing types of training programs,” Ward explained. “That’s harder to do in a degree setting or in a larger program setting, but they’re certainly getting better at it.”
Nevertheless, Ward argued that the integration of the education system as a whole and the private sector still needs work. “[There] isn’t a real good feel for where is this economy heading and what are the skill sets that workers are going to have to have to make the state workforce competitive.”
Ward recommended that Wisconsin’s business climate be more welcoming to tech startups and to established new economy firms. “People will come where there are job opportunities, and in order to do that you need to create new businesses and grow the existing businesses that will attract them.”