Washington, DC (The Information Technology and Innovation Foundation, June 2014): This recent report from the ITIF identifies the broad elements that make up a national innovation system, including a description of the innovation success triangle, which measures the business environment, regulatory environment, and innovation environment of a nation, and is used to predict the success of an innovation system in promoting technological development and economic growth. Click here for a downloadable copy of the report.
It then uses this framework to analyze the U.S. national innovation system and assess the strengths and weaknesses of individual components and whether those components are improving, stable or deteriorating relative to our competitors.
Unfortunately, in many areas the U.S. national innovation system falls behind its global competitors, hampering its ability to foster the innovation that is imperative for success in the 21st century economy. As nations compete to win the global innovation race, the effectiveness of their national innovation systems will be a key factor in deciding the winners and the losers. Thus, the challenge for the United States going forward is whether it can make the needed changes to its innovation system to keep up with the international innovation leaders and remain a key player in the innovation economy. The future health of the nation will depend on the answer.
Madison, WI (manufacturing.net, June 27, 2014): The Manufacturing Jobs for America campaign, helmed by U.S. Senator Chris Coons (D-Del.), has announced that the U.S. Senate has approved bipartisan legislation that will strengthen the nation's manufacturing workforce training programs and help fill the skills gap that many manufacturers are coming up against. The Workforce Innovation and Opportunity Act (WIOA) eliminates 15 unnecessary programs and includes five skills-training provisions from Coons' Manufacturing Jobs for America campaign to help prepare the current workforce for the high-technology manufacturing jobs of today.
The Senate approved the bill by a vote of 95-3. The three dissenting voters were Thomas Coburn (R-Okla.), Mike Lee (R-Utah) and Ron Johnson (R-Wis.). The bill will soon head to the House of Representatives for approval.
In a statement, Senator Coons said, "America's manufacturing sector helped build our nation's middle class, but the advanced manufacturing jobs of today require higher-skilled workers than ever before. We have to align our workforce development programs with the needs of America's manufacturers, and the Workforce Innovation and Opportunity Act takes important steps to do just that."
The five skills-training provisions from the Manufacturing Jobs for America campaign include:
- The Adult Education and Economic Growth Act (S. 1400) would increase investment in adult education via expanded access to technology and literacy skills for adult learners. State workforce development systems would be more deeply integrated with adult education.
- The America Works Act (S. 453) seeks to prioritize federal funding for job training programs that offer portable, national and industry-recognized credentials. In theory, this would promote job-training programs that match with the needs of local employers, with the aim of improving employment prospects.
- The On-the-Job Training Act (S. 1227) requires state workforce investment boards to disseminate information about on-the-job training opportunities and to boost incentives for employers to participate in these programs.
- The SECTORS Act (S. 1226) requires state and local workforce investment boards to establish sector-based partnerships between employers, educators, and local workforce administrators to train workers.
- And finally, the Community College to Career Fund (S. 1269), which aims to create partnerships between businesses and schools that facilitate effective job training.
Arlington, VA (Manufacturers Alliance for Productivity and Innovation, July 9, 2014): The era of constrained labor supply is just beginning, and the decreasing share of populations that are in the working age cohort will keep human capital a front-burner issue for goods producers for decades, according to a new Manufacturers Alliance for Productivity and Innovation (MAPI) report.
In An Aging, Urbanizing World, Senior Economist Cliff Waldman notes that global population growth has been slowing dramatically since the mid-1960s. In the latter half of the 1960s, average growth was 2.07 percent per year. The rate decelerated over the decades to an estimated 1.15 percent per year for the 2010-2015 period and is projected to fall below 1 percent after 2020.
Noting that demographics are no longer an academic matter, Waldman writes that "Population shifts are being felt very much in the present and are having a direct impact on the slow world rebound. Manufacturers must understand how dramatic demographic changes intersect with economic activity, and the resulting reshaping of the business climate in ways that would have been unimaginable just a decade ago."
Regional differences are revealing. For instance, for the 2010-2015 period, the average population growth in Africa will be an estimated 2.46 percent compared with 0.81 percent in the United States and 0.08 percent in Europe.
For the world as a whole, the 60 and older cohort share is climbing, from 9.2 percent in 1990 to 11.1 percent in 2010. Between 1990 and 2010, the share of this cohort in the more developed regions rose from 17.7 percent to 21.8 percent.
Commensurate with the aging population, people have shown a general tendency to concentrate. In 2011, 52.1 percent of the population resided in urban areas, including nearly 78 percent in developed regions. Urbanization is trending up in less developed regions, with the 2011 rate of 46.5 percent expected to rise to 51.3 percent by 2020.
Madison, WI (IMPO, June 27, 2014): The manufacturing skills gap. It seems you can't go a week without a politician, media outlet or industry leader wringing their hands over this issue, perhaps because it's just so confounding. In an industry that has yet to recover the jobs lost in the recession, we're dealing with vacancies in the skilled trades that threaten to derail production growth and sector expansion.
According to Manpower Group's latest "Talent Shortage Survey," skilled trades positions are the most difficult to fill, and have ranked #1 for the past four years. According to Manpower Group's report: among the more than 1,000 U.S. employers surveyed, respondents say they are having difficulty filling open positions because candidates lack technical competencies/hard skills (48 percent); candidates lack workplace competencies/soft skills (33 percent) and because of a lack of/no available candidates (32 percent).
Why Not Manufacturing?So what are the factors that keep this skill schism at such a meaningful size that we're all still talking about it?
"There are significant opportunities and jobs within manufacturing that are not being filled. It's about training and matching those skills with the jobs that exist," says Bob McCutcheon, U.S. Industrial Products leader for the professional services network PricewaterhouseCoopers (PwC).
"It's also a perception issue," he adds. "These are still some of the most technologically sophisticated jobs that we have, and many of these jobs are actually sitting in front of computer terminals, but public perception is still a few decades old. I think some manufacturers have work to do to change public perception, in order to attract and retain the talent."
While the perception problem isn't a new one, it's now coupled with an aging baby boomer demographic — a group that's well represented in manufacturing and retiring at a rapid rate. In a way, manufacturers are being held hostage by a Millennial generation that doesn't find the industry appealing. Dan Campbell, 2014 chairman of the American Staffing Association and CEO of the staffing and professional recruitment organization Hire Dynamics, thinks there is a prevailing stigma that has resulted in Millennials being reticent to enter into some industries. "But these are outdated views," he says. "We have thousands of open trades jobs at the same time as millions of jobless Millennials — who are facing twice the national unemployment rate."
New York (Associated Press, June 24, 2014): Some comforting news for recent college graduates facing a tough job market and years of student loan payments: That college degree is still worth it.
Those with bachelor's or associate's degrees earn more money over their lifetime than those who skip college, even after factoring in the cost of higher education, according to a report released Tuesday by The Federal Reserve Bank of New York. The study, by economists Jaison R. Abel and Richard Deitz, also found that a degree is still a good investment for college grads whose jobs don't require college. About a third of all college graduates remain underemployed for most of their careers.
A person with a bachelor's degree can expect to earn about $1.2 million more, from ages 22 to 64, than someone with just a high school diploma, the report said. And someone with an associate's degree will bring in $325,000 more than someone with a high school education. The study used data from the U.S. Census Bureau and the Bureau of Labor Statistics.
Rising tuition costs, surging student debt levels and an increase in unemployment rates among new grads since the recession have caused some to question the value of higher education. The New York Fed study is just the latest to say that a degree is a good investment. A Pew Research Center report from earlier this year said young adults with college degrees make more money, have lower rates of unemployment and are less likely to be living in poverty than those with just a high school education.
The New York Fed report said that between 1970 and 2013, those with a four-year bachelor's degree earned an average of about $64,500 per year, while those with a two-year associate's degree earned about $50,000 per year and those with only a high school diploma earned $41,000 per year.
Brownstown, PA (Lancaster Online, July 8, 2014): Making nigiri isn't on the top of every middle school student's to-do list.
But transforming candy into a treat that looks like a beautiful piece of sushi? That's something most kids can get behind (and then devour).
About 80 students recently attended STEM camps — that's short for science, technology, engineering and math — at Lancaster County Career and Technology Center's Brownstown campus. Billed as a career camp, the sessions provided kids from around the county hands-on learning experiences designed to get them interested in culinary arts, manufacturing and renewable energy.
In Tina Arnt's classroom, students such as soon-to-be ninth-grader Dzenis Alagic worked Tuesday with 3-by-6-inch beds of marshmallow cereal treats to create sushi rolls. Fillings included fruity cereals, fruit rope and sprinkles that resembled roe. Manheim Township's Dzenis and his friends noted that the dry ingredients were easier to maneuver than the sticky, stretchy candies.
Using chopsticks, the students arranged their creations — some with chocolate syrup as soy sauce and molded red Tootsie rolls as pickled ginger. The emphasis was on presentation, but earlier in the day, Arnt's students learned about the scientific reaction that helps create homemade marshmallows.
Zurich and New York (McKinsey & Company, July 2014): After years of large-scale outsourcing and offshoring, a number of onshoring initiatives in both the manufacturing and service industries have left many executives wondering if a major trend reversal is occurring.
The answer, according to our analysis, is simply that many leading companies now have a broader set of options when they source. To do that optimally, they define bundles of activities that should be sourced consistently and select the best option for each bundle: offshoring, nearshoring (locations in neighboring countries), farmshoring (lower-cost locations in the company’s home country), or onshoring. Today, sourcing strategy focuses increasingly on value-creating factors that go beyond labor costs, which was the primary driver of sourcing in the past.
Diversified sourcing modes
Our review of major onshoring initiatives reported by media in the past two years highlights diverging sourcing trends for manufacturing and for IT and business processes. The vast majority of onshoring initiatives were in manufacturing. This development is primarily due to a rebound in domestic demand for goods such as machinery and automobiles that are typically assembled close to final demand. In addition, a two-thirds decline in the US price of natural gas since 2008 is attracting some manufacturing industries that use gas as direct fuel or feedstock.
In contrast, only about 20 percent of onshoring concerned IT and business processes. Corporate sourcing leaders that we interviewed said they find that strategic offshoring of IT and business processes retains the promise of reducing costs, hedging production risk, and increasing access to talent by employing a network of offshoring locations.