December 6, 2007
Wisconsin's Strengths, Weaknesses, Opportunities, and Threats
By Steven Pigeon
A
common analysis taught at universities across the country is the S.W.O.T
analysis. The S.W.O.T
analysis is performed by organizations to identify their competitors,
Strengths, Weaknesses, Opportunities, & Threats. Recently, I reviewed several S.W.O.T analyses and debated
with colleagues about which category “government” should be placed if
a SWOT analysis was performed for a business in the State of Wisconsin.
It was agreed upon that government could only be classified as an opportunity if it were a customer of the particular business. Generally speaking, from a business’s point of view, government bodies can be classified as strength or weakness based on the area’s business climate that is, in part, created by an area’s government.
Several measures of
Wisconsin’s business climate - 39th according to the Tax
Foundation and 23rd according to the Milken Institute (behind
Illinois and Minnesota) - indicate that government bodies in Wisconsin are
more of a weakness than strength.
Beyond simply acting as a hindrance to businesses, Wisconsin government could be classified as a legitimate threat to them. The lawsuit against Wisconsin cranberry growers, enforcement of minimum markup law, and taxing business payrolls to fund universal health insurance can clearly be identified as threats to businesses in the state of Wisconsin.
The zealous prosecution of state cranberry growers by former Wisconsin Attorney General Peg Lautenschlager serves as an example to other businesses that an “us” (Wisconsin Government) versus “them” (state businesses) mentality is pervasive and can have an impact on business.
Another example of zealous regulation would be Menards having their attempts to expand operations in Wisconsin torpedoed by state regulators. This cost the Eau Claire area 700 jobs, and put other businesses on notice that the state government is not here to help. Even when local governments appear to be helping businesses they try to turn their backs on them. Just ask Cabela’s and the Washington County Board.
Government inaction is also a threat to Wisconsin businesses. Despite being deemed unconstitutional in October, Wisconsin’s minimum markup law remains. State legislators Bill Kramer and Leah Vukmir currently have a proposal that would repeal the minimum markup law. They are expected to face stiff opposition with this endeavor.
These threats may be overcome by businesses if they are diligent in obeying all the rules that are in place. However, the proposal to tax business payrolls to fund a universal health insurance program in the state of Wisconsin is a financial threat that could destroy businesses in Wisconsin.
The proposal, tabled in the state budget negotiations, will surely be revived in the near future, especially if the Democrats gain control of the state Assembly after the 2008 election cycle. The bill would create a 10.5% payroll tax on businesses. This would create a financial burden that would limit a company’s ability to provide raises to their employees, thus compete for talent, especially with out-of-state businesses. A company’s ability to expand their operations in the State of Wisconsin, and in some cases maintain their current level of operations will be put in jeopardy.
The Wisconsin State government needs to take actions that will place them in the Strength category of any businesses SWOT analysis. Lowering the tax burden on businesses, a friendly regulatory environment, and providing firms with business reasons, not just sentimental ones, are things government can do to convince businesses that Wisconsin is a great place to be. Businesses are not a threat to government, so let’s make sure that our government is not a threat to businesses.