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Combatting the brain drain is the key to Wisconsin's growth, conference speaker says

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Boosting Wisconsin’s economy will take more than just adding jobs — it will require luring more young college graduates to move here, a UW-Madison expert told a conference in Madison on Wednesday.

One way to do that could be to set up a two-tiered tuition system, with lower rates for those who promise to stay in Wisconsin after they earn their degrees, said Morris Davis, associate professor and academic director of the James Graaskamp Center for Real Estate.

Wisconsin is experiencing a “massive brain drain,” Davis told about 250 people at the Governor’s Conference on Economic Development.

While the state’s population is rising about 0.5 percent a year, most of the growth is in people age 65 or older, he said. Each of the past five years, Wisconsin has lost 9,000 residents, ages 21 to 29, with college degrees.

“You might say, well, they’ll come back. They don’t come back,” Davis said. “I don’t think that’s good for the state.”

Neighboring states, such as Minnesota and Illinois, are losing adults overall, but they are gaining college graduates in their early 20s, he said.

The state’s No. 1 priority should be “figuring out what we need to do to get this group to Wisconsin,” Davis said.

Speculating on what makes Minnesota more attractive than Wisconsin, Davis said it could be that Minneapolis is a bigger draw than Milwaukee. Investing in Milwaukee might help, he said. “We need a place where they’re going to want to live. I think Madison is that place; I don’t think Milwaukee is,” Davis said.

He said Wisconsin should aim toward getting young people in Illinois and Minnesota to relocate here. Michigan’s college grads are also a good target, he said. Every year, 90,000 people leave Michigan, Davis said.

“Every three years, Michigan loses (residents comparable to the) entire population of Madison and the surrounding communities. That’s a place where we should be able to have success recruiting,” he said.

As for possible tools to entice college grads, Davis said proposals might include offering tax breaks or discounted tuition to students who commit to staying in Wisconsin after they graduate. He said a group of experts should be convened to take a close look at the problem of brain drain.

Manufacturing is still king

When it comes to creating jobs, Wisconsin should focus on the industry it knows best: manufacturing, said John Brandt, founder and chief executive of The MPI Group, a Shaker Heights, Ohio, consultant group that conducted a study in 2013 on Wisconsin’s economic future.

“The vibrancy of this is one of the key assets the state has right now,” Brandt said. “Manufacturing has been the legacy (industry) in the state, and it will be this state’s future.”

Of 37 industries that drive Wisconsin’s economy, all but one involves manufacturing, he said. But as far as the value of products manufactured here and the productivity index, Wisconsin’s performance is below the national average, Brandt said. “There are some issues Wisconsin needs to take a look at,” he said.

Brandt said industries with “technological intensity” tend to grow faster and create more jobs, but they represent a smaller portion of Wisconsin’s manufacturing sector than the nation’s. “That is where the jobs for your children and grandchildren are going to come from,” he said.

Among the problems the state faces are a growing number of retiring baby boomer employees, a lack of qualified job applicants and a “disproportionate” number of residents without a college education, Brandt said.

“This is an issue. Increasingly, if you want to be competitive in manufacturing, you’ve got to have a smart workforce,” he said, adding, “If you have smarter employees, you will make more money.”

Brandt said schools need to do more to sell manufacturing as a career choice. “You’ve got to make manufacturing cool. You’ve got to stop being embarrassed about having a job in manufacturing,” he said.

The conference, which started Tuesday, wraps up Thursday at Monona Terrace. It is being presented by the Wisconsin Economic Development Association.


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