Opinions: Is plant an opportunity, or costly mistake?

In a basement office Madison in 1979, Judy Faulkner started a new data analysis company; her new venture had 1.5 employees and used a computer Faulkner said “sounded like a washing machine.”

In 1985, Epic Systems’ revenue first hit $1 million. In 1997, the company unveiled a new webbased health care records program. Three years later, the company would expand to 400 employees and take in $50 million in revenue.

Today, with nearly $2 billion in revenue and over 10,000 employees, Epic — now housed on a rapidly expanding 1,000-acre campus in suburban Verona — has completely transformed Dane County’s demographics and economy. New condominiums are shooting up all over downtown Madison in order to house all the young Epic employees; upscale, modern bars and restaurants seemingly open weekly. New technology business are cropping up to take advantage of all the brainpower in the city.

When Gov. Scott Walker argues a new Foxconn plant will be “transformative” to the state’s economy, the Epic example is what he may have in mind. Luring the Taiwanese technology giant to southeastern Wisconsin could have ripple effects throughout the area, modernizing the state’s culture and reputation in the same way Epic has done for south central Wisconsin.

Fifteen years ago, no one could have quantified the impact Faulkner’s business would have on Madison. Mere numbers on a page couldn’t have captured the city’s economic and social progress between 2002 and 2017.

This is why the analyses being offered showing limited economic benefit to the state from the Foxconn deal may fall well short of reality. For one, a dry economic estimate doesn’t reflect the dynamic cultural changes that take place when a large employer grows and employs thousands of people.

Further, current estimates don’t factor in the rhetorical advantage Foxconn would bring to southeast Wisconsin — as Walker has said, a new $10 billion plant would “put Wisconsin on the map” as a leader in technological manufacturing. If the state proves it can get this right, businesses may begin to cluster in the area, leading to far more spin-off jobs than the 10,000 to 22,000 estimated by various analyses.

Those arguing for the Foxconn plan also note that the $3 billion price tag may be inflated. For one, many of the tax credits only materialize if Foxconn provides the good-paying jobs it has promised. Additionally, these prospective analyses are necessarily speculative; the estimate conducted by the Legislative Fiscal Bureau, for instance, assumes the factory will be up and running at full capacity in 2022, with no further job or wage growth for the next 23 years.

It’s certainly possible the company may be slower than expected in meeting its employment or wage goals — but it is also definitely possible that in the next quarter-century Foxconn will be able to hit its employment target and those workers will get raises over time, increasing tax revenue to the state.

And, of course, it’s impossible to predict what type of magnet Foxconn will be for other spin-off companies looking for skilled workers. In fact, to see this possibility, one must look no further than Epic Systems, which has tempted other businesses into locating in the Madison area. Among them just happens to be a huge electronics manufacturer looking to expand in Dane County.

It’s named Foxconn.