Manufacturing in the U.S. has had its fair share of struggles in recent decades, but innovation and automation hold promise for the future. That was a recurring sentiment from CompanyWeek's 2017 Manufacturing Growth & Investor (G&I) Conference held Sept. 20 at Space Gallery in Denver.
The event brought together a swath of industry executives and veterans who have seen the decline of U.S. manufacturing over the past few decades, some of whom are launching startups, like Roy Slavin, CEO of Wonderware Corporation and former president and CEO of Siemens Industrial Automation. Others are quickly growing their businesses in Colorado.
Slavin, who keynoted the event, keenly observed the drop in U.S.-based manufacturing when compared to peers in Europe: "In Germany -- and in Europe, generally -- the percentage of manufacturing jobs as a percentage of overall employment has remained constant at about 22 percent. In the United States, it's declined over a third over the same period of time."
Slavin attributed the sharp drop-off to a number of factors, including a lack of government support in the U.S. and limited protections against predatory dumping. "That policy alone, that utter failure on the part of the government, has cost the U.S. at least 6 million jobs," he said. Slavin predicted it will take a generation to regain manufacturing knowledge in the U.S., which will require training infrastructure.
There's still an absolute need for U.S. manufacturing in the aerospace industry and defense contracting. "We need to have products made here," explained Heather Bulk, CEO and co-founder of Special Aerospace Services. "The requirements and regulations in our industry are so intense that we don't have the luxury . . . specifically for DOD and NASA . . . that we can't get it from China."
Meanwhile, her Boulder-based company, which has 26,000-pound machines, also has problems not just finding qualified candidates for operating machines, but those that can pass a drug test, increasingly difficult given Colorado's legal marijuana.
Bulk was on a panel of manufacturers that echoed the need for more training infrastructure in the U.S. They agreed apprenticeship programs were critical.
"The workforce issues that we face over time have just intensified, whether it was a good economy or bad," echoed Noel Ginsburg, president and founder of Intertech Plastics and Democratic gubernatorial candidate in Colorado. "Years ago, apprenticeships were big. There was an ecosystem for our schools and community colleges that brought people forward in our industries."
There's a push to bring them back. "In Colorado, one of the things we've been looking at is the Swiss model of apprenticeship," said Ginsburg, who said nearly 50 leaders from Colorado visited Switzerland to learn how other countries develop their workforce. He noted some apprenticeships in Switzerland start early as middle school, and about 30 percent of the workforce there has four-year degree, while 70 percent have an apprenticeship.
"From that inspiration and seeing that work, we raised over $13 million in the last few years to launch the first statewide youth apprenticeship system in the country, here in Colorado," said Ginsburg of CareerWise Colorado. The goal is to have 20,000 apprenticeships per year in Colorado, he said.
Another theme of the conference was the importance of advanced manufacturing from 3D printing to the increasingly omnipresent Internet of Things (IoT). Humayin "Hugh" Rashid of Xavor Shanghai related how a $3 clamp on his yacht broke causing $50,000 of damage; an IoT sensor would have been a cheap insurance policy. "I'd pay $100 for a clamp that let me know when it's going to break," he said.
While some companies have been using 3D printers for decades, the low cost of new versions are bringing them to whole new user groups. Some bigger companies are ordering up 30 of Aleph Objects' LulzBot 3D printers, allowing their engineers access to them to speed prototyping. But Aleph President Harris Kenny said he's seeing a lot of use from newer groups like libraries and schools using them as a practical educational tool.
"What's really exciting is the lower end," Kenny said. "People that go from a prototype into Kickstarter and . . . go right to market. That's really a exciting trend, where you go: 'That's our manufacturing floor, a 12-square-inch cube . . . and they're printing thousands of units and widgets."
But advanced technology can be a double-edged sword. "The thing that keeps me up at night is the people working on machines," said Steve Savage of 1908 Brands, a Boulder-based food and beverage company. To stay competitive in the marketplace, the company has installed a lot of automation. "I can't think of a machine that I've bought where the return on investment hasn't been less than a year. But getting someone to fix it in a timely manner is really the critical thing." Even while speaking at the conference, he'd observed that a machine that went down that morning meant that four people were sitting around for about for four to five hours until it could be fixed.
To keep U.S. manufacturing growing on a broader basis, Xavor's Rashid offered one overarching strategy: innovation. "We've got to be invested making something no one else can make. All the pieces are here," he said. "But somehow the pieces need to be reconfigured and part of that is the investment side. How do you get the investors and VCs excited about the manufacturing base?"
One way to get investors interested is a pitch fest like the one that capped the G&I event. The 14 companies pitched products ranging from better batteries to edible insects, competing for a $2,500 prize.
While many of the participants were high-tech, the winner was decidedly analog: Comsero manufactures mcSquares, innovative dry-erase boards designed to foster collaboration. "They dramatically improve collaboration in businesses and schools," said founder Anthony Franco. "Where they really shine is collaboration in large group environments. They turn meetings from boring lists into group brainstorming where an individual can comfortably contribute in a team environment."
Though currently mcSquares is an analog solution, Comsero knows it needs to take the technology digital to make it even more collaborative. That’s why a new, patented version will be “an Internet-connected display that can change the way people collaborate with digital content.” Franco says. But to bring that to market the manufacturer needs to keep raising funds.