Review time that I spent in the manufacturing industryOverview of what I will talk aboutEmployment trendsChallenges the industry facesPossible solutions and calls to action
Why does the RAEDC care so much about the manufacturing industry?
Just some of the reasons manufacturing is so important to any regional economyComment about my role on the Workforce Investment Board
Where does the RAEDC fit within this model? Chambers? Other organizations impacting economic development
Rockford is following the national trend of declining manufacturing employment. Reasons include:Productivity gainsRe-classification of jobs from manufacturing to serviceOutsourcing (but even China’s mfg numbers are declining)We find that when economies industrialize, manufacturing employment and output both rise rapidly, but once manufacturing’s share of GDP peaks—at 20 to 35 percent of GDP—it falls along with its share of employment. As wages rise, consumers have more money to spend on services, and that sector’s growth accelerates, making it more important than manufacturing as a source of growth and employment. (McKinsey)in the long run, manufacturing’s share of employment will remain under pressure: ongoing productivity improvements, faster growth in services, and the force of global competition, which pushes advanced economies to specialize in activities requiring more skill
Differentiate between overall industry employment and replacement needsThe competition for talent will intensify!
2011 Skills Gap report from Deloitte and the Manufacturing Institute
Cyclicality puts pressure on employers to retain their skilled workersNegatively impacts the image of manufacturing as a stable work environmentCapital intensity makes the industry more susceptible to economic downturns
Manufacturing Industry is not homogenousLabor-intensive industries will almost always follow the path of low wages, but others, with more complex needs, must weigh factors such as access to low-cost transportation, to consumer insights, or to skilled employees.
Reference Innovator’s Dilemma book … need to consider innovative new products or services or someone else will deliver them.There is a tendency to focus on efficiency at the cost of innovation…ROI focus drives to shorter-term investments
The world is changing…do you understand the impact on your supply chains and customers?India’s national manufacturing policy adopted in November 2011 calls for setting up national manufacturing zones, creating 100 million new manufacturing jobs and raising manufacturing’s contribution to GDP from 16% to 25% by 2022
How is the RAEDC and its partners working to create a more competitive environment in our region?
Material from an ED Partner Event in September 2012There is more
The new career academies in District 205 need your support and engagementOther school districts in the region are looking for partnerships
Rockford Region Manufacturing - There's Gold in Thar Hills!
Rockford Region Manufacturing - There’s Gold in Them Thar Hills!Women of Today’s ManufacturingJanuary 10, 2013
About the RAEDCThe primary role of the Rockford Area EconomicDevelopment Council is to enhance wealth creation inthe Rockford Region by marketing the area andhelping employers retain and create quality jobs.The RAEDC works closely with many partners to serveas a one-stop resource for clients, to improve thecompetitiveness of the region, and to engage thecommunity in the work of economic development.
Did You Know? (Source: National Association of Manufacturers)• U.S. manufacturing produces $1.8 trillion of value each year, or 12.2 percent of U.S. GDP. For every $1.00 spent in manufacturing, another $1.48 is added to the economy.• Manufacturing supports an estimated 17.2 million jobs in the U.S.—about one in six private sector jobs. Nearly 12 million Americans (or 9% of the workforce) are employed directly in manufacturing.• In 2011, the average U.S. manufacturing worker earned $77,060 annually, including pay and benefits. The average worker in all industries earned $60,168 (28% higher than average)• U.S. manufacturers are the most productive workers in the world (2.5X Service Sector), far surpassing the worker productivity of any other major manufacturing economy, leading to higher wages and living standards.• U.S. manufacturers perform two-thirds of all private sector R&D in the nation, driving more innovation than any other sector.
McKinsey Global Institute – November 2012As a new global consuming class emerges indeveloping nations, and innovations sparkadditional demand, global manufacturers willhave substantial new opportunities—but in amuch more uncertain environment.
Regional Economic Success Focus AreasSource: Purdue Center for Regional Development
There is help!• Incentives• Financing• Workforce• International Trade• Energy• Growth Partners
Help Yourself and the Industry –Take the Pledge!www.themanufacturinginstitute.org/Image/Manufacturers-Pledge/Pledge/Pledge.aspx
Don’t Forget the ―Golden Rule‖Those who have the gold, make the rules!