Will we ride the economic growth wave or wipe out?
We’ve all seen the videos of those surfers riding waves taller than a building. It’s exciting and terrifying at the same time. Well, we’re about to be hit with a similar wave of economic growth. Are we ready for the ride?
The U.S. is about to enter a period of growth unprecedented in my lifetime. Some economists project growth rates of up to 7% for next year, with long-term growth staying above 4% for several years. If this growth occurs, Wisconsin will either take advantage of the momentum and build an economic base that will thrive for the next generation, or fail to act and leave us vulnerable to new technology disruptions, outside competitors, and economic stagnation.
Riding the coming growth wave requires three critical actions. First, we must take the necessary steps to make our crucial businesses competitive in the world’s markets. Next, we must build a 22nd century infrastructure to let people, goods, and ideas flow freely from anywhere in Wisconsin. Finally, our approach must be inclusive, allowing everyone to share in our success, not just for ethical reasons but because it’s also good for our economy.
Strong growth is coming. The federal government will pump over $6 trillion into the economy, considering both tax cuts and COVID relief actions. We see some of the early impacts of these actions with the stock market remaining strong and savings rates reaching record levels. As vaccines take hold, coronavirus fears subside, and we feel more confident about the future, much of this money will come off the sidelines and fuel consumption across the economy — especially in constricted industries with pent-up demand like hospitality and travel.
This growth will strain our economic structure. Companies will struggle to find the workers they need, channels to move goods and people will reach their limits, and the permanent market transformations caused by the pandemic will become evident, forcing huge capital and market shifts. These will be great problems to have; how we solve them will determine our long-term trajectory.
Looking forward will test our nerve and our pragmatism. Transformational change to position for the future will test nerve by stretching our ability to look objectively at worldwide trends, clearly define our goals for prosperity, and then take the aggressive actions required to reach those goals. These actions will require every ounce of our Wisconsin pragmatism to forge alliances and take action based on outcomes, rather than philosophies.
I see three areas where these actions will be most critical. First, we must make sure our key economic sectors remain world-class competitive. Wisconsin is one of two states where manufacturing provides the largest share of our gross state product (GSP). Manufacturing must remain strong for the state’s economy to remain vibrant. Tax cuts and reduced regulation will not accomplish that goal by themselves. Manufacturers must quickly adopt industry best practices to strengthen existing operations, employee engagement practices that harness and align diverse talents, and embrace the transformational change made possible by cutting-edge technologies.
Next, we must improve Wisconsin’s infrastructure and the way we move goods, people, and ideas where they need to go. Traditional infrastructure — roads, ports, airports, and power grids — is critical to an economy driven by manufacturing and agriculture. We must go beyond repairing potholes, making our infrastructure ready for the economic — and technological — growth to come.
Still, that’s not enough. New, connected technologies demand a communication structure that can deliver huge amounts of data quickly and reliably. Wisconsin must adopt policies and make investments that foster universal broadband access and a secure 5G network across the state. The pandemic demonstrated the fundamental necessity of access to ensure healthy business and social systems. Our future depends on our ability to take advantage of connected technology anywhere in the state.
Finally, we must take these actions in a way that includes everyone in our future success. Most people advocate for this approach simply because it’s the right thing to do. That’s not enough to drive meaningful change. Instead, let’s focus on why inclusiveness is good for our businesses and our wallets.
Wisconsin faces a severe worker shortage, especially in the face of strong economic growth. Even now, most of our largest sectors have recovered from the pandemic and are struggling again to find the talent they need. Our future economy depends on our ability to pull people off the sidelines, fully engage and align them with our organizations, and embrace new technology and techniques to maximize their productivity. This requires more than additional training, better transportation, or higher wages. We need a comprehensive and nuanced talent approach to remove barriers and improve outcomes.
The growth wave is coming. I’m pulling on the swim trunks and getting ready to paddle out. Will you join me?
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