Bold reforms and investments can restore states such as Wisconsin to their rightful place as America's manufacturing backbone.
America is sprinting into its next era of economic upheaval. AI-driven automation, reindustrialization, supply chain realignment, and historic demographic shifts are occurring rapidly and simultaneously. States that embrace these changes by positioning themselves to meet the moment with pro-growth policies will attract capital, industry, and talent that will define the next generation of prosperity. States that do not will simply be spectators to others’ meteoric rise.
These are not partisan observations, they are facts. And all states — including Wisconsin, which we both call home — must face up to them.
Wisconsin as the Test Case
Wisconsin has traditionally been a top destination for manufacturing and is home to companies such as Kohler, Oshkosh Defense, Ashley Furniture, and Rockwell Automation. The Badger State battles Indiana for the top per-capita manufacturing ranking; a greater percentage of Wisconsin workers are employed in manufacturing than in any other state. This economic diversity provides immense stability and opportunity to nearly half a million residents. Its more than 9,000 manufacturing businesses, big and small, play a key role in the economy of the state and of many local communities.
Our past is one to be proud of, but what lies ahead? We are living in an era of significant demographic change. Nationally, birth rates have hit all-time lows; Wisconsin is no exception to this worrying trend. The state is also undergoing rapid changes in those entering and leaving the state. In 2024, Wisconsin had a net-migration gain of only 6,000 persons. Population growth is slowing to the lowest rates on record. In many counties, between 30 percent and 40 percent of the population will be 65 years old and over by 2035. Even worse, our under-18 population is shrinking quickly. A growing number of Wisconsin regions — including the Northwoods, from where both of us hail — are experiencing structural labor decline that will inhibit communities’ ability to deliver basic services and create a one-way street out for their children.
Employers in states across the country are now competing for an ever-shrinking pool of skilled labor. State affordability is a new key metric, and Wisconsin lags behind — as evidenced by its new ranking of 31st. That means 30 states are more affordable than Wisconsin, including neighboring Iowa, which ranks first. At present, Wisconsin is less affordable than every other Midwest state. National trends point to an obvious feature that separates affordable states from the unaffordable: high-tax states lose population, while low-tax states gain.
The Sun Belt states are raking in new residents and all their spending due in significant part to their low- and flat-tax regimes and their transparent, confidence-inducing regulatory environments. Businesses are following. Companies like Tesla, Oracle, Palantir, Exxon, and Yamaha are leaving their long-established headquarters for more predictable and affordable states. But while companies and wealthy individuals may be leaving California and New York, they are not coming to Wisconsin.
There is another, less-discussed dimension to the interstate competition for people and business. Technological proximity — access to the data centers and supercomputing clusters that power artificial intelligence and advanced manufacturing — is becoming what highway access was in the 1950s: a determinative factor for industry location. Reduced latency, better resiliency, lower costs, and customization capabilities are no longer niceties; they are prerequisites for advanced manufacturing, precision agriculture, and modern business operations. States that welcome and build this infrastructure will win the next industrial era while others watch it pass.
Where you find start-up hubs and cutting-edge manufacturers, you will find supercomputers. These clusters will be what attracts investment and families while delivering the reindustrialization that many Americans urgently demand.
Wisconsin Is Leaving Opportunity on the Table
It’s immensely troubling that when new companies look to go from prototype to scale — that is, when they decide where to build their great ideas — they are not choosing Wisconsin as a home. They should be. Wisconsin has the industrial heritage, workforce culture, natural resources, and geography to be a natural home for defense technology suppliers, advanced agricultural technology, nuclear energy components, and next-generation material manufacturing. Our state has the DNA and bones to meet the moment. What it lacks is the policy environment and the urgency.
Worse yet, Wisconsin’s own companies are now hedging their bets. In private conversations, corporate executives across Wisconsin have acknowledged they are holding back on planned investments, waiting for clarity on the state’s long-term business environment. Hundreds of millions, if not billions, of dollars in new expansion, new jobs, and new futures will flee the state for better alternatives despite their wish to stay home. This is not a slow-moving problem; decisions to relocate are being made now.
Without the appropriate business-friendly changes — namely, significant and targeted deregulation, bold tax structure changes, and tort reform — this negative trajectory is bound to continue. Wisconsin could watch its core industries and small businesses flee to other states, leaving it with a budgetary crisis.
What’s at Stake for the Rest of the Country
Wisconsin should be a flashing red light for the rest of the country. The industrial Midwest, with its manufacturing tradition, skilled-trades culture, and geographically strategic position at the center of the country, is either America’s next great reindustrialization corridor or a cautionary tale about what happens when legacy assets are left unleveraged and underutilized.
What happens in Wisconsin over the next few years will determine whether it and states like it can reinvent themselves fast enough to compete — or whether the Sun Belt and a few select states will monopolize the next wave of American prosperity.
Wisconsinites are at a crossroads. We can choose to grow or decline. Bold reforms and investments can turn the tide and return Wisconsin to the top — not merely as a point of state pride, but as proof that America’s industrial heartland still has what it takes to be the nation’s manufacturing backbone.
Paul Schecklman is executive director of the Northwoods Policy Network, a Wisconsin-based think tank. Paul Wassgren is a former partner at DLA Piper and Fox Rothschild and a former congressional candidate.