Two caveats. One, not noted by the newspaper, is that even the production function for Indian engineers is subject to the Law of Increasing Opportunity Cost. Another, incompletely noted, is that many of the benefits of a research-intensive university are appropriable private benefits.
For the cost of one engineer in the United States, a company can hire 11 in India, according to the National Academies, a U.S. government advisory body. And the Organization for Economic Cooperation and Development, a Paris-based multinational think tank, last year announced that China spends more on research and development as a share of its economy than Japan and became the world's second-highest investor in R&D after the United States.
[Milwaukee chancellor Carlos] Santiago points to a continued loss of jobs throughout southeastern Wisconsin. But he notes that Milwaukee still has an opportunity to retain its cluster of "advanced manufacturing" companies, which require a steady stream of technology workers, software engineers and research and development investment. UWM in January announced that Rockwell Automation Inc. will help UWM build a technology research program to support the region's advanced manufacturing sector.
If the region loses the advanced manufacturing sector, Santiago said, "then we lose the competitive advantage in manufacturing."
It's not simply a matter of a few anti-intellectual legislative types finding an opportunity to stiff the university system. There's still a balance between the potential spillover benefits, including keeping educated Wisconsin residents in Wisconsin without an indentured-servitude tuition provision, and the entirely appropriable private benefits, such as entry-level engineers for Rockwell who don't have to be taught on company time how to properly wire a starting circuit.
Santiago, an economist, argues that no big metropolitan area has transitioned into the 21st century knowledge-driven economy without a research-based university at its core. He told the newspaper that he has spent weeks lobbying politicians and flying around the nation to meet with big-dollar donors from the private sector.
Past UWM construction projects have taken eight to 13 years, Santiago said, adding that he's unwilling to settle for anything longer than six to eight years for the entire engineering school expansion.
"His timetable is aggressive, but it's necessary for the metro economy to keep pace with the world marketplace," said Thomas Hefty, retired CEO of Blue Cross Blue Shield United of Wisconsin and an economic-development activist who co-chaired Gov. Jim Doyle's Economic Growth Council from 2003-'05.
But at this point, Santiago freely admits that he still doesn't have the money he needs, doesn't own the land, and has not yet begun expanding the 60 engineering-school faculty members to 100, as he plans.
One potential hitch that could derail the UWM project lies in the Madison statehouse, where some lawmakers for years have opposed increases to the state's higher-education spending.
Doyle, who endorses UWM's expansion, has earmarked an additional $10 million in the state's 2007-'09 budget for the project. If Doyle and the UW System fail to push their UW "growth" budget through the Legislature, then Santiago cannot hire new faculty, donors will go away, and the UWM project will lose momentum.