Wake up to the economic benefits of high-speed rail

Read any business magazine and you’ll discover a multitude of examples of companies that secured profitable, growing market positions because their visionary leaders challenged the conventional rules of how an industry works. The leaders’ fresh perspectives resulted in winning business model innovations in industry after industry.
Netflix ousts Blockbuster. Starbucks creates a rapidly growing revenue engine that every local coffee shop missed and is poised to steal share from bland-tasting Maxwell House and Nescafé on grocery store shelves. Amazon disrupts not just booksellers Barnes & Noble and Borders, but also Target and Walmart, with its no-bricks-and-mortar business model strategy.

All too often, leaders of established businesses act like horses pulling carriages in New York City’s Central Park, wearing blinders to avoid distractions. Which brings me, a political independent, to the narrow thinking of Wisconsin’s Republican Gubernatorial candidates on high-speed rail transit connecting Milwaukee, Madison, Chicago and, eventually, Minneapolis, St. Paul.  The two candidates are loudly against the investment at the federal and state levels, while their Democratic opponent favors this investment.

The Republican candidates, along with other opponents of high-speed rail, argue that no Wisconsinite is going to take the train to go see his mother or make a client visit in another city, because cars are faster and more convenient. As a result, the trains will be a financial disaster. These critics are thinking about the future with eyes on past and current behavior. They are judging the behavior of the current workforce, not thinking about those who elected to not to live in Wisconsin or how our workforce will change as the baby boom cohort retires.

As a result, critics are missing the entire argument for why trains are essential to Wisconsin’s future.

Wake up Scott Walker and Mark Neumann. Beyond the close to $1 billion of needed economic stimulus, the trains will make our two largest metro areas a more attractive location to live, work, and play, drawing outsiders to our region and slowing if not reversing the “brain drain” that is worrying the majority of people in the state.

Ask my 20-year old daughter out of the blue about the train, and she says, “Awesome, Mom. I’d have access to jobs in three cities if I moved back here from Maine after college.” Generation X and Y are moving to large urban areas, where multiple job changes within an industry or profession are possible without disrupting childcare, schooling, professional networks or friendships. Milwaukee and Madison both fall short in meeting this location consideration, but with a train connecting our two leading university centers to Chicago, we’d be considered more often as a location for careers.

We’d not just create a more level playing field by connecting our cities, we might secure a competitive advantage, as the affordability of our cities and ease of living in Wisconsin sure beat that of L.A. and many other large labor markets that are drawing recent graduates and young couples ready to start a family.

Our expanded market would not just be large enough to build careers within, we’d also create an expanded market for businesses to sell their products and services within.

In addition, the effort to transform the Milwaukee airport area into the Midwest’s distribution hub would benefit from the high-speed rail extension, as would tourism if we were smart like the Europeans and created biking, hiking and sightseeing tours connecting our cities. Summerfest could expand, students trying to complete overcrowded degree programs would have more options, and the list of beneficiaries goes on and on.

Many readers may not know or remember that Wisconsin lost many of its community-enhancing corporate headquarters starting in the 1950s as a result of acquisitions by out-of-state companies, a loss that has lowered our per capita personal income relative to the nation and many surrounding states. The companies that lost their independence to forward-thinking competitors often did so because Wisconsin leaders assumed drivers of industry success would not change. They and our political leaders at the time were blind to size becoming a key success factor, forcing consolidation in industry after industry. In their conscious and unconscious decisions to stay small and conservative, they failed to conserve jobs and income growth in our state.

Let’s not do it again.

 

Kay Plantes is an MIT-trained economist, business strategy consultant, columnist and author. She served as chief economist for former Wisconsin Republican Gov. Lee Dreyfus. Plantes provides expertise in business model innovation, strategic leadership and smart economic policies. She resides in Madison, Wis., and Oslo, Norway.

Read any business magazine and you’ll discover a multitude of examples of companies that secured profitable, growing market positions because their visionary leaders challenged the conventional rules of how an industry works. The leaders’ fresh perspectives resulted in winning business model innovations in industry after industry.
Netflix ousts Blockbuster. Starbucks creates a rapidly growing revenue engine that every local coffee shop missed and is poised to steal share from bland-tasting Maxwell House and Nescafé on grocery store shelves. Amazon disrupts not just booksellers Barnes & Noble and Borders, but also Target and Walmart, with its no-bricks-and-mortar business model strategy.

All too often, leaders of established businesses act like horses pulling carriages in New York City’s Central Park, wearing blinders to avoid distractions. Which brings me, a political independent, to the narrow thinking of Wisconsin’s Republican Gubernatorial candidates on high-speed rail transit connecting Milwaukee, Madison, Chicago and, eventually, Minneapolis, St. Paul.  The two candidates are loudly against the investment at the federal and state levels, while their Democratic opponent favors this investment.

The Republican candidates, along with other opponents of high-speed rail, argue that no Wisconsinite is going to take the train to go see his mother or make a client visit in another city, because cars are faster and more convenient. As a result, the trains will be a financial disaster. These critics are thinking about the future with eyes on past and current behavior. They are judging the behavior of the current workforce, not thinking about those who elected to not to live in Wisconsin or how our workforce will change as the baby boom cohort retires.

As a result, critics are missing the entire argument for why trains are essential to Wisconsin’s future.

Wake up Scott Walker and Mark Neumann. Beyond the close to $1 billion of needed economic stimulus, the trains will make our two largest metro areas a more attractive location to live, work, and play, drawing outsiders to our region and slowing if not reversing the “brain drain” that is worrying the majority of people in the state.

Ask my 20-year old daughter out of the blue about the train, and she says, “Awesome, Mom. I’d have access to jobs in three cities if I moved back here from Maine after college.” Generation X and Y are moving to large urban areas, where multiple job changes within an industry or profession are possible without disrupting childcare, schooling, professional networks or friendships. Milwaukee and Madison both fall short in meeting this location consideration, but with a train connecting our two leading university centers to Chicago, we’d be considered more often as a location for careers.

We’d not just create a more level playing field by connecting our cities, we might secure a competitive advantage, as the affordability of our cities and ease of living in Wisconsin sure beat that of L.A. and many other large labor markets that are drawing recent graduates and young couples ready to start a family.

Our expanded market would not just be large enough to build careers within, we’d also create an expanded market for businesses to sell their products and services within.

In addition, the effort to transform the Milwaukee airport area into the Midwest’s distribution hub would benefit from the high-speed rail extension, as would tourism if we were smart like the Europeans and created biking, hiking and sightseeing tours connecting our cities. Summerfest could expand, students trying to complete overcrowded degree programs would have more options, and the list of beneficiaries goes on and on.

Many readers may not know or remember that Wisconsin lost many of its community-enhancing corporate headquarters starting in the 1950s as a result of acquisitions by out-of-state companies, a loss that has lowered our per capita personal income relative to the nation and many surrounding states. The companies that lost their independence to forward-thinking competitors often did so because Wisconsin leaders assumed drivers of industry success would not change. They and our political leaders at the time were blind to size becoming a key success factor, forcing consolidation in industry after industry. In their conscious and unconscious decisions to stay small and conservative, they failed to conserve jobs and income growth in our state.

Let’s not do it again.

 

Kay Plantes is an MIT-trained economist, business strategy consultant, columnist and author. She served as chief economist for former Wisconsin Republican Gov. Lee Dreyfus. Plantes provides expertise in business model innovation, strategic leadership and smart economic policies. She resides in Madison, Wis., and Oslo, Norway.

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