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Published: January 20, 2014
 / Spring 2014 / Issue 74

 
 

America’s Real Manufacturing Advantage

To succeed in advanced manufacturing workplaces, workers need to possess the production skills to set up, monitor, and control the manufacturing processes, and the process design and development skills to continuously improve them. They will need strong computer skills, the ability to understand sophisticated production processes, and the knowledge of how to work effectively in teams.

A number of pilot programs are under way today that show how the training gap can be closed. Siemens is a partner in an apprenticeship program in North Carolina, along with Apprenticeship 2000, Central Piedmont Community College, and six other technology corporations. High school graduates joining the program alternate between studying at the college and working at Siemens’s advanced turbine plant in Charlotte. Students are paid while training and attending school for three and a half years, and upon graduation are offered full-time jobs at competitive salaries—higher, in fact, than the average salaries for graduates with four-year liberal arts degrees. Best of all, they have an associate’s degree in mechatronics (a multidisciplinary field that includes mechanical, electrical, control, and computer engineering), a journeyman’s certificate recognized by thousands of companies, and a job, with no loans to pay off. IBM’s P-Tech initiative, launched in 2011, is another example. (P-Tech stands for “Pathways in Technology Early College High School.”) The program starts in ninth grade, offering an integrated high school and college curriculum focused on STEM subjects, along with workplace skills such as leadership, communication, and problem solving. Students receive both their high school diploma and an associate’s degree in computer information systems or electromechanical engineering technology, and are first in line for entry-level positions at IBM.

Programs like these are models for the kind of experience-based educational paths that must be expanded nationwide. These programs are similar to Germany’s youth apprenticeships, which have helped enable that nation to maintain a leading position in manufacturing and to boast the lowest youth unemployment rate in the European Union. At 7.5 percent, the jobless level among young people in Germany is less than a third of the E.U. average rate of 24 percent, and less than half the U.S. rate of 16.2 percent. An extensive, well-supported apprenticeship system, and other programs through which people receive hands-on experience coupled with academic training, will prepare young Americans for the jobs that advanced manufacturing will offer: skilled, well-paid, and secure jobs that can support a new middle class. Developing such programs will require a partnership among government, educational institutions, industry, and labor—and will provide a collective power no single sector can match.

The Case for Optimism

Public perception about manufacturing has been changing for the better in the U.S. over the past few years. From the 1980s through the 1990s, many policymakers and prominent economists had argued that the decline of manufacturing in the U.S. was an inevitable evolution, and that the expanding service and financial sectors would continue to provide growth and prosperity. The dot-com bust in the early 2000s, the housing and financial debacle later in the decade, and the worsening employment situation for workers in the U.S. have revealed the weaknesses of that argument.

Today, policymakers and consumers are becoming more receptive to the idea that manufacturing is an important source of jobs, competitiveness, and economic strength and security, even if some are basing their expectations of a manufacturing renaissance on the wrong factors. The federal government has been hands-on in convening business leaders and researchers to create new programs to foster manufacturing, focusing school curricula on STEM subjects, providing funding for community college grants to expand job training, and proposing new programs such as the Advanced Manufacturing Partnership and institutions such as the Digital Manufacturing and Design Innovation Institute.

 
 
 
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Resources

  1. Robert D. Atkinson and Stephen J. Ezell, Innovation Economics: The Race for Global Advantage (Yale University Press, 2012): Why the U.S. needs a coherent innovation policy to remain competitive, from two officers of the Information Technology and Innovation Forum.
  2. Peter Cappelli, Why Good People Can’t Get Jobs: The Skills Gap and What Companies Can Do About It (Wharton Digital Press, 2012): The director of Wharton’s Center for Human Resources makes a case for changing the way talent is developed, recruited, and retained.
  3. Kaj Grichnik and Conrad Winkler, Make or Break: How Manufacturers Can Leap from Decline to Revitalization (McGraw-Hill, 2008): Former Booz & Company consultants show how top companies are reinventing themselves to compete in a new world.
  4. Andrew N. Liveris, Make It in America: The Case for Re-inventing the Economy (Wiley, 2011): The chairman and CEO of Dow Chemical makes the case for manufacturing in the United States.
  5. Gary P. Pisano and Willy C. Shih, Producing Prosperity: Why America Needs a Manufacturing Renaissance (Harvard Business Press, 2012): Two professors at Harvard Business School show why manufacturing really matters in an innovation-driven economy.
  6. Harold L. Sirkin, Justin Rose, and Michael Zinser, The US Manufacturing Renaissance: How Shifting Global Economics Are Creating an American Comeback (Knowledge@Wharton, 2012): Analysis and recommendations for U.S. manufacturing from the Boston Consulting Group.
  7. Vaclav Smil, Made in the USA: The Rise and Retreat of American Manufacturing (MIT Press, 2013): An authoritative history of U.S. manufacturing by a noted business historian and author.
  8. Gene Sperling, “The Case for a Manufacturing Renaissance,” speech delivered at the Brookings Institution, July 2013: The director of the National Economic Council discusses U.S. competitiveness in advanced manufacturing.
  9. For more thought leadership on this topic, see the s+b website at: strategy-business.com/operations_and_manufacturing.