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Report finds ‘real growth’ in Madison tech, mixed picture for state

Madison’s high tech job growth far outpaced the national average, but Milwaukee’s was nearly stagnant, according to a new report from the Brookings Institution.

The report looked at “advanced industries” in U.S. metro areas, evaluating a wide range of sectors from software to manufacturing that are STEM-heavy or require research and development.

Those jobs are important, in part, because they have broader economic spillovers and pay people more. In Wisconsin, those jobs pay people $74,486 on average, while the average salary in the state is $45,184.

Nationally, the report found, jobs in those sectors grew by 2.46 percent between 2013 and 2015. Madison had a 6.04 percent jump, ranking it 11th in the country, while the Milwaukee area ranked 69th with a 0.66 percent increase.

The Milwaukee findings can largely be explained by the downturn in the global economy, which has heavily affected big companies headquartered there. Layoffs at mining equipment makers Joy Global and Caterpillar, for example, helped lead to the 5.9 percent drop in jobs in those sectors between 2013 and 2015, the report found.

And there aren’t many signs that will improve.

“The Milwaukee region is going to have to prepare for some rough years,” said Mark Muro, a senior fellow at the Brookings Institution and policy director of its Metropolitan Policy Program.

Still, Muro said, some multinational companies in Milwaukee are taking the lead on the “Internet of Things” trend that’s becoming an important source of job growth.

And Wisconsin Technology Council President Tom Still pointed to efforts to develop water technology and software companies, as well as increasing collaborations between industry and academia that could bode well for the area’s future.

“I think the Milwaukee area has some emerging clusters that are beginning to really take shape,” he said.

The state had a more mixed picture. In the smaller metros category, Janesville ranked 20th with a 6.85 percent growth in advanced industry jobs, while only Oshkosh, Green Bay and Eau Claire saw a decline.

Statewide, such jobs grew at a clip of 1.81 percent, putting Wisconsin 29th in the country. The report found the industries employ 257,771 full-time workers in the state, or 8.6 percent of all of its jobs. The latter percentage ranked Wisconsin 18th among all states.

Madison, though, put up some of the best numbers nationally. Its software product sector, for example, grew by 13.2 percent between 2013 and 2015, while its management consulting industry grew by 17.4 percent.

“Software is a huge sweet spot and a huge addressable market nationally and globally, and Madison is right in the middle of it,” Muro said.

Muro said the city’s advantages include low home prices and cost of living, factors that are “beginning to impede growth” in Boston and Silicon Valley.

But the city, Muro said, needs to make sure it’s got a solid pipeline of workers ready to take on those jobs. And it needs to make sure that its growth is spread among more than just white males.

“This is a chance for Madison, and to some extent Wisconsin, to participate in the emergence of the next economy,” Muro said. “So making sure that you’re not leaving population behind is another important dimension.”

-- By Polo Rocha,

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