Manufacturing remains vital to Milwaukee’s future, but will population trends rise to meet new opportunities?

By Bret Mayborne - Director of Economic Research, MMAC

After watching the percentage of our workforce employed in manufacturing slip from 40% to 16% over 50 years, is it crazy to still project manufacturing as a leading part of Milwaukee’s economy 50 years from now? Perhaps not.

Automation, artificial intelligence, Industry 4.0. Manufacturing isn’t dead — it’s transforming, with greater automation and integration of production processes. It used to be about assemblers on the plant floor, but now it’s about engineers on the floor and in the R&D office. See Foxconn, Rockwell Automation and GE Healthcare among many others as examples.

The Milwaukee area has a chance to be at the epicenter of these changes. Direct manufacturing employment may not be as great 50 years from now, but the overall economic impact that manufacturing generates will still be significant.

Milwaukee is also well positioned in high-end services. Do you know how many Fortune 500 headquarters Kansas City has, or Portland, Ore.? The answer is one each. Milwaukee has seven. On a population-adjusted basis, Milwaukee ranks in the top four for Fortune 500 headquarters among the nation’s largest metros. Along with manufacturing, headquarters operations ranks as one of Milwaukee’s strongest clusters. Nowhere else is the opportunity of the Milwaukee area more evident.

Forecasting the future is a dicey proposition, but the opportunities to make Milwaukee’s future exceptional are there for the taking. So who will make up the next generation of Milwaukee workers to take advantage of these opportunities? One of the difficulties of projecting the future is identifying turning points. Doing straight-line projections of a trend line is rather easy, but in the long run it misses the important points.

Slowing population growth could affect economic growth

One of the defining demographic features of the Milwaukee area – and, in fact, most of the Great Lakes region — is slow growth. Fortunately, slow population growth and prosperity have not been mutually exclusive events in the past. Yet with tightening unemployment rates, to historic lows, slow population growth will increasingly have negative consequences on future prosperity.

A principle feature of a prosperous future in the region will be stronger population growth. That’s one of the necessary turning points. Faster growth can come in many forms: growth of the indigenous population, better use of the population we already have and attraction of others to the region.

What does the region need? All of the above.

Fortunately, natural population growth in minority communities in Milwaukee ranks stronger than in many communities. But gaps in education, and labor force participation have hindered this opportunity. As the region increasingly diversifies, there will be a pool of talent available, but the region will have to do a better job of leveraging the potential.

Vibrant economies attract people. Net migration in the Milwaukee area has been fairly stagnant for some time. But similar benchmark metros have posted net migration growth, including Indianapolis, Kansas City and Minneapolis. So, it is possible in northern climates to attract people, but a vibrant economy is the necessary ingredient.

To be attractive, there needs to be an aura of opportunity – the opportunity of employment, the opportunity of diversified growth, the opportunity of innovation. The building blocks are there but continuing effort is necessary to put the blocks together.