Wisconsin Manufacturing in the Global Economy: its Past, Present, and Future

Abstract

In this paper, I briefly sketch how the New Economy forces of globalization and technology have affected Wisconsin?s manufacturing in the recent past, and I note the challenges these forces will pose in the future. The first step in recognizing these challenges is to understand if there really is such a thing as a New Economy, and if so, whether it has openings into which a set of Old Economy industries can be plugged in order to become a part of it. Specifically, can a state like Wisconsin use its traditional industries as stepping stones to join the New Economy and enjoy its benefits? My view is that it can because in many instances it is the Old Economy that provides the market for New Economy products. While Wisconsin will face difficulties in overcoming the challenges posed to it by the New Economy, Wisconsin is better positioned than many states to use its Old Economy industries to meet those challenges. I give most of my attention to the large and volatile machinery industry, which provides over half of Wisconsin?s exports and which is the sector most sensitive to export fluctuations and import competition. I describe what Southeast Wisconsin might be like if it remained the hub of some Old Economy machinery industries, but operated in the New Economy mode of entrepreneurial venture capitalism while developing new technologies for its traditional industries.