You hear a lot about how the nation's Rust Belt is shedding manufacturing jobs left and right. And in Ohio, Michigan, and Illinois, that's true. In 2004, the three states combined lost about 19,000 jobs, according to the Bureau of Labor Statistics. And yet Wisconsin -- whose economy is similar to those other states -- experienced the nation's largest surge in manufacturing job creation in 2004.

The numbers tell the story of a remarkable turnaround. Just a year after losing more than 13,000 manufacturing jobs, Wisconsin rallied to add more than 16,000 new blue-collar jobs through October 2004. By comparison, that's 7,000 more than runner-up Minnesota and 12,000 more than third-place Oregon.

So how did Wisconsin do it? Arguably, by supporting its small businesses. Under Gov. Jim Doyle, the Badger State has shifted its policy focus from large manufacturers to specialized small manufacturers. David J. Ward, president of NorthStar Economics, a think tank in Madison, says that Doyle, a Democrat, has cultivated these small producers by lowering taxes, stripping away outdated regulations, and arranging for $9 million in financing for these companies (in state and federal funds) through the Manufacturing Extension Program. "The governor has made all the right moves to promote manufacturing," says Ward, a former economic adviser to Republican governor Tommy Thompson.

As a result, modest-size firms in many sectors, including shipbuilders, truck companies, the makers of biotech machinery, and paper and printing outfits, began hiring. And then there's the cheese industry. Sales from the state's 117 cheese producers grew at a torrid pace in 2004, driving the creation of nearly 2,000 new food manufacturing jobs. By year-end, Wisconsin's cheese makers had churned out so much fromage -- a record 2.28 billion pounds of the stuff -- that it accounted for 26% of the national total.