Wisconsin made national headlines last week with the announcement that Taiwanese LCD manufacturer Foxconn will build a factory in Wisconsin, a $10 billion investment that could translate to 13,000 jobs.
But the benefits of the deal go beyond the Foxconn factory, Gov. Scott Walker said in a recent CNBC interview.
“This is not just a plant or factory, this is a whole ecosystem,” Walker said. “We call it ‘Wisconn Valley’ because of all the high-tech manufacturing innovation that’s going to happen.”
That ecosystem would be ideal, but it is far from guaranteed, said Hart Posen, associate professor at the University of Wisconsin-Madison School of Business, on a recent episode of political talk show “Capital City Sunday.” The state needs to keep working to fully take advantage of Foxconn, he said.
“I think if we do nothing, the chances of that ecosystem coming into being — something that really provides substantive value for the state of Wisconsin — is really quite small," he said.
Posen appeared on the show with Paul Jadin, president of the Madison Region Economic Partnership, to discuss the deal. Both agreed there was great potential for Foxconn to spur local economic development. The deal would create up to 13,000 jobs, with an average base salary of $53,875. It would add about $181 million to state and local tax revenues.
On another Sunday talk show, “UpFront with Mike Gousha,” State Rep. John Nygren, R-Marinette, compared Wisconsin's decision to host Foxconn with California’s investment in Silicon Valley and North Carolina’s investment in Research Triangle Park.
"This is a transformational opportunity for our state," Nygren said.
Jadin and Posen compared the potential of Foxconn to Verona-based software developer Epic.
Epic’s 10,000 employees and campus has had a significant impact on the way Madison deals with startups and technology, Jadin said, and has created a phenomenal ecosystem.
Posen added that Epic has created “entrepreneurial spin-offs,” oftentimes from former employees who create complementary products. That’s what needs to happen with Foxconn, he said.
"Capital City Sunday" host Greg Neumann asked whether an ecosystem could naturally emerge, citing Foxconn’s statement that they will buy about one-third of their supplies from Wisconsin companies. Jadin acknowledged that likely translates to billions of dollars in business for suppliers, but Posen said that wasn't enough.
“Foxconn needs to be the seed around which a whole ecosystem emerges,” Posen said. “Now is when we need local, state-level programs to build out that ecosystem.”
The two also addressed several concerns from critics of the deal, including the fear that with increasing automation in the manufacturing world, thousands of jobs for Wisconsinites could be replaced by machines.
Jadin said that Foxconn likely wouldn’t call for an initial 3,000 jobs if they didn’t anticipate using those employees. But if Foxconn finds “opportunities to automate further” in the future, he said, “there’s nothing we can do about that.”
Asked by "Upfront" host Mike Gousha to answer the criticisms that the deal amounts to corporate welfare and that Foxconn has failed to deliver on investment promises in the past, Nygren said, “You never score if you don’t throw the pass.”
On Friday, Walker called for a special session of the Legislature, introducing a bill that would build infrastructure and waive environmental regulations for the plant.