Manufacturers drive state economic growth

The economic outlook for Wisconsin remains positive, and manufacturing is playing a key role in fueling economic growth in Dane County and across the state.

In Madison, personal income growth outpaces the nation, and high-tech manufacturing is a major contributor. Manufacturers are hiring again and an old problem is recurring: finding skilled employees to fill open positions. Statewide, exports surged 10.4 percent to a record $12.7 billion last year. And in some quarters, there are reports of Wisconsin manufacturers actually bringing work back from China.

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The obituary for manufacturing seems to get written every 10 years or so, but the industry always seems to rise from the deathbed. Yes, layoffs are painful and, unfortunately, many of those jobs won't be back. But Wisconsin's manufacturing industry is on the rebound and will continue to generate high-wage jobs for years to come.

My job brings me in constant communication with manufacturers and business leaders. Here's the report from the frontlines.

Manufacturing is changing to beat the competition. No one would deny that today's manufacturers face significant challenges. But what is often is overlooked is that many manufacturers are embracing new technology, adopting lean strategies and adding features and services to their product lines.

Ask Bill Henry, president of Middleton-based American Laser Products Inc. The company, which remanufactures laser print cartridges, has seen productivity soar 40 percent and inventories plummet as a result of implementing lean manufacturing. "We're a stronger and more profitable company as a result," he says.

Manufacturing is driving growth in many sectors. Manufacturing job numbers tell only part of the story in terms of gauging the industry's health. Despite the layoffs of the past recession, manufacturing remains a $42 billion industry in Wisconsin that pays 24 percent of the state's total payroll. Wisconsin manufacturing output has risen every year for the past two decades with the exception of two years � post-9/11 and in 1998 when government changed industrial job classifications.

The Federal Reserve of Chicago reports that manufacturers continue to outsource activities and services they once did in-house, such as marketing, legal, accounting, logistics and maintenance. These jobs used to be classified "manufacturing" but now show up in "professional services." It's not a coincidence that warehousing and logistics are two of the fastest-growing industries in Wisconsin.

Manufacturing is "high-tech." There's a lot of talk about building a knowledge economy, or a technology economy; manufacturers say that we already have one. Manufacturing is the biggest driver, creator and user of technology in the nation and that's true here as well.

We see it in products. The anesthesia delivery systems developed and manufactured by GE Healthcare are used in hospitals throughout the world. Electronic Theater Controls manufactures next-generation entertainment and architectural lighting systems. Thermo-Electron, an analytical instrument manufacturer, designs innovative spectrometers that allow scientists to advance their research to higher levels.

We see it in processes. Lasers cut steel; radio frequency identification tracks inventory. Manufacturers receive customer orders via the Internet, seamlessly integrate raw materials from dozens of suppliers and within days � not weeks � build, assemble and deliver a finished product to customers � and at a cost that goes down each year.

Robert Tucker, an author and international expert on innovation, puts it this way when addressing manufacturers: innovate or evaporate. Wisconsin manufacturers are innovating and it is no coincidence that our economy is the beneficiary.