Dean Barber

Manufacturing is Common Sense

In Corporate Site Selection and Economic Development on May 21, 2017 at 7:42 pm

Our ability to perceive, understand, and judge things that are common to most of us, well, that is common sense. It is central to civilization and probably why we’re still around as a species.

Remember that Common Sense, a pamphlet written by Thomas Paine in 1775–76 advocating independence from Great Britain to people in the Thirteen Colonies, forged a nation and that which became a world superpower.

As Americans, we hold common sense to be a great attribute, that is until we elect a person to public office. Then something very strange happens. That person, who previously exhibited a great abundance of common sense, becomes a politician.

As a result, common sense becomes a casualty, and our trust in our institutions erode. Notwithstanding this erosion of faith, I truly believe in the common sense of the common man. He may not understand immediately, but he eventually discerns the truth. He will get it.

Critical to Our Nation’s Future

Which is why I am heartened by a recent survey that show that an overwhelming majority of Americans see manufacturing as critical to our nation’s future prosperity.

It is only common sense to believe this. But now it is up to our elected officials to shirk off the D or the R from their shirtsleeves, and come together to enact common sense policies to grow manufacturing in this country.

I will offer up some ideas on that front, but first let’s take a look at that recent U.S. public opinion survey by Deloitte and The Manufacturing Institute. Among the findings:

  • 83 percent believe U.S. manufacturing is critical to economic prosperity
  • 81 percent feel it is important to maintaining their standard of living.
  • 81 percent believe trade and export of U.S. manufactured goods benefits the economy
  • 76 percent believe the U.S. needs a more strategic approach to developing its manufacturing base
  • 76 percent believe the U.S. should further invest in the manufacturing industry.
  • 71 percent believe the U.S. should ensure long-term, stable funding for programs that spur innovation and advanced manufacturing.
  •  88 percent expect future manufacturing jobs will require a higher level of technical skill

They Get It

In a nutshell, this survey confirms that most Americans correctly view manufacturing as vital to America’s livelihood and that we as a country should invest more in manufacturing.

They understand that manufacturing jobs will be more high-skill and less manual labor, and they know that manufacturing fuels job creation in this country. (Something that economic developers on the state and local level have long appreciated.)

Having grown up in a manufacturing family (my father was the president of a foundry) and having worked on factory floors, I have special affinity for manufacturing. Most of the companies that I have helped as a corporate site selection consultant have been manufacturers.

They like the fact that I am true believer in manufacturing and that the location of a future plant, to which I will help in finding, is critical to its long-term operational success. Factoring costs, which includes the good, the bad and the ugly, is the essence of corporate site selection process.

The Smart Factory Needs Smart People

One critical factor in finding that optimal location for a future plant, which should not be shock to anyone, especially economic developers, is the technical talent within an existing local (commuting distance) labor pool.

As I have written many times, we are in but the early stages of a digital industrial revolution. The “smart factory” of the future, employing digital technologies such as the internet-of-things, big data analytics, artificial intelligence and advanced robotics, will require smart people.

By the end of 2022, manufacturers expect that 21 percent of their plants will be smart factories, according to a new report by Capgemini’s Digital Transformation Institute. Sectors, such as aerospace and defense, industrial manufacturing and automotive, where people are working alongside intelligent machines, are expected to be the leaders of this transition.

To suggest that the shift to smart factories will transform the labor market in this country is an understatement. Companies see automation as a means to remove inefficiencies and low-skill jobs. In short, those manning the smart factory of the future must have digital skills.

Conversely, it also means that there will be more employment opportunities for highly skilled workers in automation, analytics and cybersecurity.

Some Companies Step Up

U.S. manufacturing job openings are quickly outpacing qualified candidates, resulting in a widening skills gap across the industry. Between 2015 and 2016 an average of two unemployed manufacturing workers existed for each open position, according to the U.S. Labor Department.

Some companies, seeing a way to lower costs and accelerate innovation, are stepping up to the plate by training their existing employees to use cutting-edge digital technologies. Capgemini found in its study that more than half (54 percent) of respondents are providing digital skills training to their employees and 44 percent are investing in digital talent acquisition to bridge the skill gap.

GE, which invests more than $1 billion in employee development each year, announced in March a “Brilliant Learning” curriculum that will include immersion boot camps on advanced manufacturing, additive and other digital technologies.

“Today, manufacturing is driven by productivity – and when combined with the merging of hardware and software, the need for a highly skilled labor force is becoming integral to the success and modernization of our industry,” said Philippe Cochet, GE’s Chief Productivity Officer in a prepared statement.

“At a time when the creation and retention of U.S. jobs in America’s manufacturing cities is more important than ever, GE is helping to secure these jobs through the execution of ‘Brilliant Learning,’ and we hope it becomes a model for the industry.”

Meeting the Needs of People and Companies

A 2016 Pew Research Center survey, “The State of American Jobs,” found that 87 percent of workers believe it will be essential for them to get training and develop new job skills throughout their work life in order to keep up with changes in the workplace. Again, the common man showing a lot of common sense.

A central question about the future is whether formal and informal learning structures will evolve to meet the needs of people who want to work and “stay current” and companies who want skilled workers.

Pew Research Center and Elon’s Imagining the Internet Center surveyed technologists, scholars, practitioners, strategic thinkers and education leaders in the summer of 2016 on the future of workplace training.

Seventy percent of the 1,408 respondents said successful programs would emerge to teach new skills at the scale that is necessary to help workers keep abreast of tech changes. But 30 percent said “no,” that they do not believe adaptation in teaching environments will be sufficient to teach new skills at the scale needed to keep up with changes in technology.

Some Communities Will, Others Won’t

As one who does economic development consulting for communities in addition to corporate site selection, I see a spotty record. Some communities will make a valiant effort to offer and keep up with what is essentially vocational training that begins in elementary schools and lasts a lifetime.

It is these communities that are preparing for a smart factory future by preparing their people with needed digital skills.

Sadly, I come across some communities that are not even thinking about this, much less doing anything about it. Now guess which communities are going to do well in the future with manufacturing and which ones aren’t.

It’s only common sense. I’ll see you down the road.

Dean Barber is the president/CEO of Barber Business Advisors, LLC, a location advisory and economic development consulting firm based in Dallas. BBA helps companies and communities. Mr. Barber is available as a keynotes speaker and can be reached at dbarber@barberadvisors.com

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