summit.nereta.org - April 27-29, 2016 Kevin Hively Founder, Ninigret Partners Kevin Hively is the founder and President of Ninigret Partners (NP). Ninigret Partners is a business advisory & economic development consulting firm. On the corporate side, he has worked on business and product strategy in flexible polymers, photonics, building materials, defense electronics, marine trades, medical devices and biopharmaceuticals. His economic development experience includes projects in Youngstown, Muncie, Detroit, Grand Rapids, Hartford, Stamford, Pittsburgh, Boston, New Haven, Providence and Philadelphia. Somewhat unique among economic development firms, NP believes the talent question is the most overriding issue facing communities seeking to grow their economies. NP sees 2 big questions as communities’ grapple with technological change and the opportunities and challenges it presents. The first big question is creating and attracting the right types of talent. The second big question is how to give current residents a shot at the emerging opportunities whether they are tech-related or becoming neighborhood entrepreneurs. Before forming NP, he was a member of the Global Leadership Management Team for Telesis, the strategy consulting arm of Towers Perrin. Prior to Telesis, Mr. Hively was Director of Policy for the Governor of Rhode Island. He is a graduate of Brown University.

1. Manufacturing’s Future
and What It Might Mean
for the Workforce
1

2. A FEW CORE BELIEFS: 1. Manufacturing is reemerging and
will become more important if
communities prepare themselves
2. We need to maintain places for
people to work and make things –
we all can’t live and work in a mixed
use world
3. We will need to help people create
their own jobs – which means
changing the risk profile of
economic development
4. We will need to get serious about
job training
2

3. WHAT IS MODERN INDUSTRY? CAN IT THRIVE IN THE U.S.?
3

4. MANUFACTURING IS NOT THIS ANYMORE
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5. NOR THIS
5

6. IT’S MORE LIKELY TO BE THIS
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7. OR THIS
7

8. OR EVEN THIS
8

9. AND TAKE PLACE HERE...
9

10. OR HERE
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11. AND QUITE POSSIBLY HERE SOMEDAY
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12. 12
WARNING!
CONSULTANT JARGON
FORTHCOMING !

13. Advanced Manufacturing
Digital Manufacturing
Industrial 4.0
13
THE MANUFACTURING RENAISSANCE

14. 14
TRANSLATION
Source: DFKI (German Research Center for Artificial Intelligence), 2011

15. 15
Computing power
Communication network speed
Cheap data storage
Digital to physical conversion technology
New materials and electronics
Human - Computer interfaces
Data visualization
WHAT IS DRIVING THIS ?

16. 16
ARE JOBS GOING TO DISAPPEAR ? DEPENDS ON WHERE YOU STAND

17. 17
ARE JOBS GOING TO DISAPPEAR ? DEPENDS ON WHERE YOU STAND
BCG Study for Germany – Impact of Industry 4.0
Source: BCG Perspectives Sept 2015

18. 18
ARE JOBS GOING TO DISAPPEAR ? DEPENDS ON WHERE YOU STAND
BCG Study for Germany
Source: BCG Perspectives Sept 2015
 Loss of 610k production related jobs (production (4% of production jobs),
quality control (7%), maintenance, production planning)
 Gain of 210k new jobs related to new technology deployment, integration and
support
 ROBOT COORDINATOR
 Additional gain of 700k+ jobs from new product opportunities related to
intelligent machinery, and more custom products
 Net gain of 350k jobs

19. 19
WARNING!
MORE CONSULTANT JARGON
FORTHCOMING !

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OPPORTUNITIES WILL EMERGE THAT ARE HARD TO FORESEE
MICRO PLANTS
POP UP FACTORIES
DECONSTRUCTED VALUE CHAINS (INDUSTRIAL
ECO SYSTEM)
HYPER SPECIALIZED SUPPLIERS
and a new jobs yet to be defined – ROBOT
COORDINATOR

21. Additive Manufacturing
THE FUTURE OF MANUFACTURING IS ALREADY HERE
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 $6b to $10.8b by 2021 (Wolters)
 Aerospace major mover in metals
 Materials advances making it more
practical

22. DIGITAL HAS ALREADY IMPACTED MANUFACTURING
PRINTING: YESTERDAY
PRINTING: TODAY
22
At one time this was a growing industry
Now commercial printing facilities are ….
Challenged due to technology

23. 23Credits to Chris Anderson
BUT WAIT – THERE’S MORE – THE OTHER MFG RENAISSANCE

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“FOR PROFIT”MAKER ACTIVITY MORE PREVALENT THAN MOST REALIZE

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FROM MAKER TO PRODUCT ENTREPRENEUR

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Firms
Employees
IT’S REAL AND MAKING AN IMPACT
Massachusetts

27. RE-INDUSTRIAL
TOOLBOX
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Land & Buildings
Supply Chain
Access & Mobility
Talent

28. LAND & BUILDINGS THAT “FIT” ARE CRITICAL
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Old industrial building – notice column
structure & ceiling clearance
Modern high bay building – notice
column structure & ceiling clearance

29. TEST FIT YOUR LAND AND ROADS
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30. CONTEMPORARY INDUSTRIAL SPACE REFLECTS CHANGES IN MANUFACTURING
PROCESS AND LOGISTIC REQUIREMENTS
SOURCE: images Northeastern University Urban Manufacturing Design Studio, 2014
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31. SUPPLY CHAIN DEVELOPMENT IS AN INCREASING FOCUS
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32. UNDERSTAND LABOR SHED TO UNDERSTAND ACCESS AND MOBILITY
ISSUES
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33. “WE HAVE A WORKFORCE PROBLEM”
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Industry says…
We can’t find
anyone qualified
Workforce system
says…
Tell us what you need
and we can provide
the training
They can’t
define the skills
they need
I can train them
– I can’t find
people who can
pass the initial
screen

34. MANUFACTURING WORKFORCE THOUGHT EXPERIMENT
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City of Philadelphia
Sample of Production Worker Age & Percentage of Occupational Category
Age 55
to 64
% of Total
Occupation
Electromechanical Equipment Assemblers 33 23%
Team Assemblers 318 17%
Computer-Controlled Machine Tool Operators, Metal and Plastic 36 21%
Extruding and Drawing Machine Setters, Operators, and Tenders, Metal and Plastic
29 21%
Cutting, Punching, and Press Machine Setters, Operators, and Tenders, Metal and
Plastic 54 20%
Machinists 149 25%
Multiple Machine Tool Setters, Operators, and Tenders, Metal and Plastic 32 22%
Chemical Equipment Operators and Tenders 53 23%
Production Workers, All Other 24 16%
Laborers and Freight, Stock, and Material Movers, Hand 1096 13%
 1824 production workers in these sample categories are over 55
Source: Philadelphia Manufacturing Strategy - 2013

35. HIRING PROCESS ATTRITION
35
COMPANY A
1053 applications requested
562 applications received
524 take pre-employment
exam
227 pass exam
20 invites to highest
test scores
10 offers
COMPANY B
780 pre-applications completed
Notified drug test would be required
475 completed full application
430 took employment test
75 passed test
75 Group Dynamics test
29 Interviewed
15 offers
Source: Philadelphia Manufacturing Strategy - 2013

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OBSERVATIONS ON THE WORKFORCE PROBLEM
Some of the attrition is reflective of broader social issues
Some is tied to lack of basic skills in math and literacy
The remainder are “classic” workforce issues
In other words 70%-80% of the “workforce problem” is not one
the workforce training system was designed to solve but owns
the policy “baggage”

37. HOUSTON, WE HAVE A PROBLEM – OR DO WE?
 Based on present yield rates from
cases it would take 30,000 to
60,000 candidates over 10 years
to fill those jobs
 Conventional wisdom says for
manufacturers to survive:
 either workforce system will
need to become more holistic
to address social and basic
literacy issues to ramp up
 dramatic gains in productivity
as well as increased
automation will be required to
replace these workers
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Or does industrial 4.0
address the production
worker problem?
Will job losses caused by 4.0
be actual dislocation?
Will we be spending limited
training resources on jobs
that may not exist in 10
years?

38. IT’S PROBABLY NOT PROGRAM AVAILABILITY – IT’S TAKE UP
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• Community College of Philadelphia engineering technologies did not issue any degrees or certificates in
manufacturing related fields
• Camden County and Delaware County offer programming
• For Allegheny County as an illustration take up rates are still low in manufacturing oriented fields
• 4 industrial production technologies
• 2 mechanical technologies
• 6 electrical engineering
Source: Philadelphia Manufacturing Strategy - 2013

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THE IMAGE ISSUE MUST GET FIXED
PART OF PROBLEM IS
THERE IS NO SUCH THING
AS “MANUFACTURING”
MAKING SHOES AND
MAKING STEEL ARE
ABOUT AS DIFFERENT AS
IT GETS

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AND THEN THERE IS OWEN

41. MANUFACTURING’S 4.0 FUTURE SUGGESTS A NEED FOR OWENS
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NUMBER IS GOING UP

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HIS FRIENDS NOT SO SURE ABOUT THIS INDUSTRIAL THING

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PARENTS ARE OLD SCHOOL MANUFACTURING
Sledgehammer

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FOR COMMUNITIES ACROSS THE COUNTRY OWEN MAY BE A DOUBLE-
EDGED PROBLEM

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YOU MAY NOT HAVE ENOUGH OWENS WHICH MEANS YOU NEED TO
BUILD A PIPELINE

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YOUR PIPELINE MAY NOT BE BIG ENOUGH WHICH MEANS YOU NEED
TO RECRUIT

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AND NOW YOUR ENTERING A WHOLE DIFFERENT ZONE OF
COMPETITION – BUILDING A DESTINATION COMMUNITY
GROWTH IN CREATIVE & INNOVATION-BASED ENTERPRISES IS DRIVEN BY TALENT
And
TALENT IS ATTRACTED BY A COMBINATION OF OPPORTUNITIES & LIFESTYLE
Therefore,
TO WIN AT THE TALENT RECRUITMENT GAME YOU NEED TO BUILD A DESTINATION
COMMUNITY - THE TYPE OF COMMUNITY WHERE TALENT EITHER WANTS TO LIVE OR
WANTS TO WORK FOR CAREER REASONS AND IDEALLY DOES BOTH

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BUT OWEN DIDN’T NECESSARILY NEED TO GO TO COLLEGE
 Talent might be in your backyard
 But need to rewire job market
 Have structures and programs to build credentials to overcome degree bias

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PARTING THOUGHTS
Manufacturing is changing
The impact is unclear but it will be real
Many levers are needed to bring it back to your region
Manufacturing’s talent needs are changing
Balancing the legacy job market needs and emerging needs is a
major issue
Offering programming isn’t enough; must help drive demand

50. THE END
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