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The evolving world of manufacturing May 3, 2006

Posted by Tom in Economic Development, Research, Workforce.

Two interesting pieces crossed my desk in the last couple days on the world of manufacturing and its workforce:

1. The Federal Reserve Bank of New York released a policy paper on "A Leaner, More Skilled Manufacturing Workforce." (Thanks to the IEDC's Karen SanClemente for the tip!)

The premise of the paper is that while America is losing manufacturing jobs on the whole, it is gaining high skilled manufacturing jobs at a strong clip – 37 percent since the 1980's. Take a look at this graphical demonstration of the author's premise:

This is very much in line with what I have been reading on the workforce front. It also mirrors one of my favorite studies, that of Manpower's Sydney, Australia office (Future Workforce Skills) – using the trends in the American workforce to determine future skill needs. Much as the Fed says that "high skilled" jobs are the overwhelming growth area in manufacturing, Manpower says that America's job growth areas over the last 30 years have been related to two key skill components: Expert Thinking and Complex Communications. Here's the Manpower chart to back up that assertion:

Another interesting point of the Fed study was that furniture manufacturing's share of skilled workers was booming, while transportation equipment's (including auto industry) share was shrinking. Furniture manufacturing surfaced early on during Northeast Indiana's Strategic Skills Initiative studies, but regional industry wages were insufficient to warrant further exploration. Perhaps, as skill levels are matched by wages in this industry in our region, it will bear further investigation by both workforce and economic development professionals.

The other element of the Fed study that I greatly enjoyed was the investigation in how manufacturing was realigning itself for this new age. Largely, realignment means retraining. (I only wish that they had drilled a little deeper on that front relating to the question of public versus private retraining investment. Are companies retraining their workers out of enlightened self-interest, or are they forcing their civic institutions to do that training for them?)

Regardless, it's a great paper and definitely worth reading.

2. Inside Indiana Business's daily report relayed Manufacturers' News' findings that while the number of manufacturing jobs in Indiana dropped by 6,711 in 2005, the number of manufacturing plants increased by 38. This shift in lower per-facilty employment can also be construed to represent an endorsement of the multi-skilled, high productivity employee mode of manufacturing that is taking place with the more successful manufacturers in Indiana. Here's the sound bite summary from Manufacturers' News:

"Manufacturing capacity utilization is at a four-year high, and production is climbing," said Tom Dubin, President of MNI, "Unfortunately, this hasn't translated into increased employment, as companies find ways to trim costs through technology and outsourcing."

Combining the two items together, we have a reasonably clear picture: If you have meaningful skills, you're probably in good shape in the world of manufacturing. If you do not have expert skills – and are not making an effort to improve your skills – you're in trouble.



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