Milwaukee should focus on growing the supply-chain sector of its economy, going beyond supply chains related to manufacturing and inviting new businesses in the future-facing service sector, a national expert in small business growth told a ballroom full of business and community leaders on Tuesday.
“How do you bring in more of these companies and how do you grow the ones already here?” said Karen Mills, who served from 2009 to 2013 as administrator of the U.S. Small Business Administration during the Obama administration. She’s now a senior fellow at the Harvard Business School, where she focuses on competitiveness, entrepreneurship and innovation.
She made the comments at Tuesday’s Economic Forum, an annual luncheon sponsored by the Milwaukee Jewish Federation. Held at the Pfister Hotel, the event sold out its 650 tickets for the fifth consecutive year.
“Business, and particularly small business, runs in my family,” Mills said, noting that the candy company her grandpa Jack started makes Tootsie Rolls in Chicago and Andes mints in Wisconsin.
She painted a mixed picture of the economy: Despite dramatic stock market gains and a decline in unemployment, business growth rates haven’t returned to pre-Great Recession levels, and wage growth has been sluggish.
“People are just not confident in the economy,” she said, pointing to a Gallup poll finding that half of Americans don’t believe today’s youth will do better than their parents.
To reverse course, she said that answers and energy need to percolate up from cities, rather than businesses looking to Washington, D.C.
“The key players need to work together,” she said. Businesses across industries must collaborate, with partnerships extending to universities, community groups and others, she noted, mentioning Milwaukee’s Water Council as a model of collaboration.
Supply chains, systems set up to move products and services to markets, represent 37 percent of U.S. jobs, Mills said. Milwaukee ranks high nationally on the manufacturing side, but low when it comes to the service sector. The community should push to be competitive nationally in both areas, she said.
In a follow-up discussion, she predicted that tax reforms pushed by President Donald Trump will likely pass, with an uncertain impact. When asked about Foxconn, the Taiwanese electronics giant that will be opening plants in Wisconsin, promising thousands of new jobs, she urged caution.
“I think it can work but I wouldn’t count on it as the centerpiece,” she said.
The event also marked the fifth year at the Jewish Federation for Hannah Rosenthal, CEO and president. Like Mills, Rosenthal served in the Obama administration, as special envoy to fight anti-Semitism in the State Department.