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They certainly do have skills. As you have guessed, this is a phony issue, but ...
Manufacturing by design: New skills needed to compete
George Leopold
2/29/2012 8:57 PM EST
OXON HILL Md. – Reviving U.S. manufacturing has emerged as such a hot election-year issue that an entire afternoon of an energy technology conference was devoted to the barriers to domestic manufacturing and obstacles to retraining the U.S. manufacturing workforce.
Those new workers will require design skills that are integral to modern manufacturing along with “soft skills” like critical thinking, leadership and collaborative abilities, experts agreed during an Energy Department conference this week across the Potomac River from Washington.
Corporate executives, educators, current and former bureaucrats and an ex-congressman all weighed in on the erosion of the American manufacturing base and how to return it to global competitiveness. Most argued that labor costs and energy usage aren’t the key barriers; what is needed is a revival of flexible, design-driven manufacturing and a new, modular approach to training the next generation of machinists, engineers and technical managers.
Throughout the preceding two centuries, the U.S. led the world in deploying disruptive technologies ranging from railroads and the telegraph to an electrical grid and communications networks. No more, argued market researcher Stefan Heck of McKinsey & Co. “Where we are lacking is the guts to deploy new technologies.”
Heck’s use of the word “guts” refers not only to the infrastructure needed to roll out new technologies by the willingness to take risks in order to reap the benefits of new energy and other innovations. He argued that much of the semiconductor industry has left the U.S. not because of labor costs - which account for only about 2 percent of the chip production costs - but because most U.S. chip makers “haven’t been willing to make the investment” in the capital equipment needed to operate advanced chips plants.
Heck, who worked closely with global chip companies before shifting his focus to cleantech, was among a range of experts addressing manufacturing and workforce issues during an Energy Department summit sponsored by the Advanced Research Projects Agency for Energy. Leo Christodoulou, program manager for DoE’s Advanced Manufacturing Office, noted that manufacturing currently accounts for 11 percent of the U.S. Gross Domestic Product, employs about 12 U.S. million workers and about 60 percent of U.S. scientists and engineers work in manufacturing-related fields.
Factory floor skills must be augmented by design expertise.
The Energy Department office is looking for ways to promote manufacturing clusters that leverage the local and regional characteristics of U.S. manufacturing (durable goods in the Midwest, high-tech in the Southwest). Further, Christodoulou’s office is attempting to identify the “keystone, foundational technologies” that the U.S. can exploit to revive manufacturing. Two, he noted, are a superior communications infrastructure and first-rate universities.
Identifying and developing new materials and manufacturing methods are among the next steps in forming regional and state clusters focused on value-added manufacturing, he added. Together, these advances could help transform American manufacturing into an agile, design-driven sector capable of thriving in a global technology competition that places a premium on being the first to deliver innovative products.
With labor-intensive manufacturing unlikely to return to the U.S., McKinsey’s Heck argued: “What we have to shift to is the kind of manufacturing that involves technology, involves automation, involves engineering skill sets, involves more complicated kinds of tasks…things that actually require design, require looking at 3-D CAD drawings, require particular skills to make sure the quality is high.” He offered as examples jet and rocket engines, products that are not only strategically important but require precise tolerances, very exact machining and control of temperature cycles during design and manufacturing.
Next: Manufacturing ecosystems
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junko.yoshida
2/29/2012 9:33 PM EST
A good snapshot where the United States stands today in its quest for bringing jobs back to the nation.
I was particularly struck by the following graph in this story:
"...Most argued that labor costs and energy usage aren’t the key barriers; what is needed is a revival of flexible, design-driven manufacturing and a new, modular approach to training the next generation of machinists, engineers and technical managers."
A year ago, most of us were almost unanimously in agreement that there is no way the U.S. could compete with other nations like China or India -- especially in manufacturing -- on the grounds of labor cost.
Now we are beginning to see a whole new debate unfolding in front of our eyes.
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Dave.Dykstra
3/1/2012 2:02 AM EST
Some very interesting points developed here. It is nice to see people realizing that labor costs are only one part of the equation, especially if productivity multiplies the actual labor results. But while there are tech jobs available, finding people to fill them is often difficult - in many cases, not because there are no skilled workers available but because the skilled workers are not where the jobs are and are not willing to relocate. This is a hurdle that must be overcome as well. With the proper education at the community college level and above, targeting skill training to an appropriate geographic area can help, but will always necessarily lag the requirements, often by a couple of years or more.
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garydpdx
3/1/2012 10:19 AM EST
Yes, there is a need for advanced expertise and management experience in 'emerging' (but some almost there) markets. And that is being fulfilled in part by returning expats (repats?), and by Americans who become expats. And George makes a couple of important points on 'why' some workers can't be mobile, but I have seen some compromise by commuting (their spouse and children stay back). Add to that, often the spouse has a relatively secure career in their home region (and may not be transportable, like real estate attorney - you basically start over if you move to another state).
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george.leopold
3/1/2012 11:42 AM EST
As the U.S. pulls together its manufacturing strategy, there will be a heavy emphasis on "manufacturing clusters," that is, state and regional ecosystems that can be tied in to community colleges, trade union training programs and the like. Some large companies like Dow Chemical are already focusing on this approach, but they want to pull in more small and mid-sized companies where the next big innovations in manufacturing may be percolating.
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george.leopold
3/1/2012 9:33 AM EST
You're are correct, Dave, you have to go where the jobs are. I was told by the high school career adviser I would work in the paper mills like my dad before me. That lit a fire under me.
Several panelists at the DoE conference noted that worker mobility is way down. The reasons range from not wanting to leave a "secure" job to being "under water" on a home loan. Still, if you are young, smart and willing to work, there are jobs out there.
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zeeglen
3/7/2012 7:51 PM EST
If you are older, established, and have a lot of baggage to move, and many posted jobs state "no relocation available", and you have already relocated twice and both times resulted in layoffs, you tend to be a bit more careful these days about relocating.
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george.leopold
3/1/2012 12:48 PM EST
Our friends at "Manufacturing and Technology News" report that the Obama administration's fiscal 2013 budget request includes a proposal to create a $1 billion public-private partnership "aimed at commercializing and manufacturing U.S. developed technologies." The partnership would be based on a similar program at Germany's Fraunhofer Institutes.
Here's a link to the story:
http://www.manufacturingnews.com/news/national-network-for-manufacturing-innovation-228112.html
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george.leopold
3/2/2012 8:04 AM EST
Bad news:
"As state funding has dwindled, public colleges have raised tuition and are now resorting to even more desperate measures — cutting training for jobs the economy needs most."
Full story here:
http://www.nytimes.com/2012/03/02/business/dealbook/state-cutbacks-curb-training-in-jobs-critical-to-economy.html?_r=1&ref=business
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chipmonk
3/2/2012 3:41 PM EST
2/3 rds of the US economy is for medium technoogy consumer products. The US cannot survive if these are outsourced to China. As we have seen in electronics, driven by rational self interest China will invest profit from making sneakers or assembling PCs ( low tech consumer products ) into Base Stations & Servers ( Huawei ) and so on. Since the fall of the Soviet Union, the US has become a house divided ( Wall St vs Main St ), arrogantly underestimating China and sending investment & technology to China for higher returns.
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george.leopold
3/2/2012 5:09 PM EST
Our advantage over China rests with out unmatched design capability, as the commentators at the Energy Department conference repeatedly pointed out. This capability must be integral to the (re)training of American workers so that we can build up flexible, regional manufacturing clusters that can leverage American know-how and superior productivity.
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elctrnx_lyf
3/4/2012 12:17 PM EST
I hope these seminars will help US to revive the manufacturing. But I'm not really sure how this is going to help. Government should encourage more and more manufacturing with tax incentives for the companies.
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agk
3/5/2012 1:19 AM EST
one point i noted is using automation can bring back the manufacturing from china. A lot of research and development in the area of robots which are more efficient than human can do it.Based on the population ratio of China to USA this can be achieved.1 US employee if he could complete the work of 20 China employees using automation can be paid 10 times salary of China and rest 10 times can be expended on the robot. This will create more jobs in USA.
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C VanDorne
3/5/2012 4:39 PM EST
George, idealistic platitudes are nice to ponder over beer but if "Most" argued this: "that labor costs and energy usage aren’t the key barriers" then I am more interested in what the "some" had to say. That is since they are probably the only non-bureaucrats in the room. You know...makers, the productive, people who actually pay the bills and balance the books, etc.. Will a report on their opinions be forthcoming from our friends at EE Times?
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george.leopold
3/7/2012 5:53 PM EST
Most of what is contained in my report was from "non-bureaucrats," so I don't know what "idealistic platitudes" you are referring to.
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C VanDorne
3/8/2012 5:01 PM EST
Really? I see two people who were given voice: a smarting "Cleantech" Market Researcher and a DOE Program Manager. So who were the "Corporate Executives" that were there?
As for the "idealsitic platitudes" I'd say the entire 7th and 8th paragraphs.
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george.leopold
3/7/2012 4:34 PM EST
Here's a training update from the Nation's Capital. Not much manufacturing in DC, but the more training, the better:
http://www.washingtonpost.com/blogs/dc-wire/post/district-to-pump-2-million-into-job-training-program/2012/03/07/gIQA2z1CxR_blog.html?wpisrc=nl_buzz
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george.leopold
3/21/2012 2:40 PM EDT
For those of you following this thread, I highly recommend this analysis of U.S. manufacturing productivity statistics. It is an article of faith among most economists that manufacturing efficiencies over the last two decades have contributed to steadily growing U.S. manufacturing output. But now some experts are challenging that view, saying computer and electronics manufacturing inflated that overall numbers and that U.S. manufacturing statistics fail to take globalization, e.g., the offshoring of manufacturing, into account.
The link below will take you to this excellent analysis:
http://www.washingtonpost.com/business/economy/economists-offer-more-pessimistic-view-on-manufacturing-in-upcoming-report/2012/03/19/gIQAKSpZNS_story.html
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TFCSD
4/5/2012 12:58 AM EDT
Here’s a question. What did employers and employees do back in the 1900’s when electricity was being introduced? I sure there was a huge skill shortage back then since it was newly invented with no similar technologies to draw compatible skills and how did they deal with it? The same thing is probably true with Steam engines (1800’s), automobile (1900’s), telephones (1890’s), televisions (1930’s), commercial mainframe computers (1950’s), and many others. So how come all of a sudden people do not have skills?
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http://www.lulu.com/spotlight/poconoarmchairreview
4/5/2012 3:16 AM EDT
They certainly do have skills. As you have guessed, this is a phony issue, but there are political and financial reasons for advocating it.
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http://www.lulu.com/spotlight/poconoarmchairreview
4/5/2012 3:28 AM EDT
This is the new America: http://bits.blogs.nytimes.com/2011/09/19/inside-amazons-very-hot-warehouse/
So when you hear reports about shocking conditions in Chinese factories that make iPads, remember, we have the same working conditions in the US. It doesn't matter if we are talking about a factory or a warehouse. The issue of bringing dignified work, let alone manufacturing, back to the US is not a matter of skills, not by a long shot.
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