By Adam Tobias | Wisconsin Reporter
MADISON, Wis. — The Wisconsin Economic Development Corporation will spend at least $150,000 this year taking its employees and local business executives on trade venture trips across the world — a practice some economists say rarely results in the desired return on investment.
LEAVIN’ ON A JET PLANE: The Wisconsin Economic Development Corp. is expected to spend at least $150,000 this year on global trade venture trips that some economists say rarely benefit taxpayers.
But the public information officer for the quasi-public state agency has declined to speak about other details of the program, which aims to accelerate the growth of Wisconsin exports.
When asked by Wisconsin Reporter to provide a full list of business executives who’ve participated in the subsidized trips, WEDC spokesman Mark Maley said in email, “At this point, I think you’re going to have to complete an Open Records Request.”
Matthew Mitchell, a senior research fellow at George Mason University’s Mercatus Center, believes the WEDC may be unwilling to talk specifics because he said similar programs often fail to yield economic benefits for taxpayers.
The WEDC did release the names of two business representatives who attended previous excursions, and both told Wisconsin Reporter Monday they have yet to land any new contracts on foreign soil.
But Glaselyn Miller, director of global sales and distribution for the Lucigen Corp. in Middleton, said her company has two “hot leads” in India that could materialize by the end of the year.
Kyle Weatherly, president of Solaris Inc. in West Allis, also hopes to have several distributors in India by the end of 2014.
Both admitted it’s still too early to tell if those agreements, if signed, will result in more local jobs.
“Unfortunately, I don’t have solid numbers,” Weatherly said. “I just have feelings.”
Mitchell told Wisconsin Reporter his colleagues are in the process of looking over 75 studies on targeted incentives such as the trade venture trips, and a strong majority have found the initiatives fail at providing widespread prosperity for entire states.
Companies or industries that receive “certain privileges” from their governments sometimes become “fat and lazy” because of a lack of competition, leading to lower-quality goods at higher prices, according to Mitchell.
“Most of the economics profession has come to the conclusion that consumers and taxpayers end up losing for the benefit of a few targeted producers when governments start doing these kinds of things, marketing for particular firms,” Mitchell said.
The WEDC has budgeted $80,000 for a global trade venture trip to Southeast Asia in August, with about 10 WEDC employees and local business executives planning to attend, Maley told Wisconsin Reporter.
The cost for each business official is expected to be $8,000, with the WEDC subsidizing about $3,000 for each private participant, according to Maley. The WEDC picks up the full tab for its employees, who assist attendees and partake in meetings to promote and find specific opportunities for Wisconsin businesses, Maley said.
The WEDC paid close to $39,000 for a trade venture trip to the Middle East in January and $29,000 for a stay in India in April. Another trip is planned for Eastern Europe in late 2014.
The cost for the Southeast Asia outing is more expensive than the Middle East and India trips because of more participants and higher hotel rates and other expenses, according to Maley.
Mitchell pointed out that many states could save their taxpayers money if they utilize modern technology and hold meetings through video conferencing programs.
Still, Mitchell doesn’t think the government should be stepping in if the market isn’t failing.
“Basically, what the state is doing here is it’s saying that the taxpayers ought to underwrite the advertising division for these firms,” Mitchell told Wisconsin Reporter. “Well, wouldn’t every firm love it if they could just take part of their costs and put them on the taxpayers?”
Contact Adam Tobias at firstname.lastname@example.org or follow him on Twitter @Scoop_Tobias