Thursday, December 17, 2009

Demise of printing cluster's technology center is a warning to policy makers

The final nail in the coffin of the printing industry's advanced technology center was driven last week when Waukesha County Technical College (WCTC) ended its relationship with the Institute on Graphics and Imaging just 2 ½ years after it began. The $4 million publicly funded building will no longer be a printing industry research and technology center. It will now house regular WCTC classes and services.

The failure of this taxpayer funded facility to generate economic growth, research and development, job creation or training should be a warning to those who have uncritically supported the M7 Water Council's water cluster initiative.

The rhetoric and promises of printing and water cluster advocates are startling similar. Wisconsin is alleged to house a vibrant cluster of printing and water technology companies. Industry success requires public investments in R and D to support these firms. The result: Southeastern Wisconsin will become another Silicon Valley.

In both cases, the drive for public investment has been championed by industry CEOs, justified by industry financed studies and uncritically supported by the local media.

In 2004 the Milwaukee Business Journal, for example, enthusiastically proclaimed:"Wisconsin's printing cluster leaders continue to support a move to make the area the 'Silicon Valley of printing.' The centerpiece of that plan calls for a 27,000-square-foot applied technology center at WCTC...The proposed center...would serve as the hub for a printing industry cluster...."

The printing technology center was first proposed in language that parallels the rhetoric of today's water cluster advocates in the Wisconsin Printing Industry Cluster report to the state's Economic Summit III in 2002:

With high-pay jobs, several market- leading companies, significant private sector R&D, and a steady supply of skilled workers from technical and baccalaureate colleges, the Printing Cluster is well positioned to continue as a major driver of the Wisconsin economy.”

The Council’s recommendation mirrored the M7 Water Council's push for UWM's fresh water research to be industry focused: "“Since the presence of R&D units is critical for the success of any knowledge-based industry, one of the colleges or universities should establish an R&D capability."

"...The Printing and Graphic Design Center, which is staffed by WCTC and UW-Stout, is one logical site for an applied R&D center."

The Printing Industry Cluster like water cluster advocates also argued that establishing a publicly funded research and development technology center would help attract additional R and D activity to the state. “PIW (Printing Industries of Wisconsin) and its members should lure the R&D operations of printing trade associations to Wisconsin...These R&D operations could obtain critical mass if combined with a college technical capability and support from private companies in R&D consortiums."

One of the printing industry cheerleaders was Milwaukee Journal Sentinel weekly business columnist John Torinus who also owns Serigraph, a West Bend printing company. He championed the center as "infrastructure …established to support the (printing) cluster.” Torinus, in a column that sounds errily similar to current promises by water cluster advocate and Badger Meter CEO, Rich Meeusen, even promoted the notion “that our growing muscle in the industry cluster could result in Wisconsin becoming ‘the Silicon Valley of printing.’"

The failure of the printing clusters' advanced technology center is a warning that policy makers should not rely on industry financed research and CEO anecdotes to develop economic development policy.

CEOs and business association spokesman have good reasons to try to externalize the costs of their firms' and sector's technology development, research and training. Most importantly it reduces their costs and increases profits. But it violates the fundamentals of market economics. Without significant skin in the game, business leaders have no incentive to minimize risky investments.

Industry financed research is unreliable. For generations the tobacco industry funded studies that denied any link between smoking, cancer and heart disease. Oil companies have financed climate change denial research in order to defeat legislation designed to reduce fossil fuel consumption. Industry financed research promoting sectoral strategies raises similar conflict of interest issues. Before public dollars are invested in a particular industry, citizens should insist the analysis and strategies be validated by independent research.

None of this means that UWM's efforts to establish a School of Fresh Water Sciences is misguided. Given the college's proximity to Lake Michigan, the importance of the Great Lakes, UWM's leadership in fresh water science and the wide range of fresh water scientific and policy issues, the School of Fresh Water is an important initiative. Nor is it an argument against developing a coherent and strategic industrial policy.

The demise of the printing industry's advanced technology center is a warning that policy makers should not allow private firms or the corporate community to define the School of Fresh Water Sciences' research agenda and scope of inquiry. That is the responsibility of the Fresh Water school's faculty and staff. And it is a warning to all of us to examine any industry spokeman's claim that taxpayer assistance is all that is needed to create another Silicon Valley.


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