I recently spent two days talking to my counterparts from other states, and one of the subjects we covered was trends in manufacturing in different parts of the country. The people involved covered every region of the United States and included a diverse set of economies, from California to Pennsylvania, Texas to New Jersey, and all points in between.
One interesting contrast that emerged was that in our particular sector of the economy, manufacturing, there was a dichotomy in approaches by both the public and private sector to growing the manufacturing base. Some states are actively courting heavy manufacturing, while others barely provide a welcome mat. Case in point: Missouri recently convened a special legislative session over a weekend to design and approve $4.2 BILLION in incentives to attract a Boeing assembly plant, almost $500,000 invested for every job attracted to the state. At the same time, a significant number of states are not very interested in a Boeing, and actively avoid any kind of incentives to attract manufacturers, citing “quality of life”, or “high proportion of advanced degrees”, or “talented workforce” as the only incentives they believe are needed. I’m guessing the Missouris of the world may eventually win that battle, with the other states capturing and growing small to mid-sized manufacturers.
On another front, heavy bets are being made by states on creating manufacturing jobs in the so-called “advanced industries”. Biotech and clean energy are obvious and relatively sexy, but there are also states moving heavily into the nanotechnology, advanced robotics, and next generation electronics and information processing arenas. In these areas, there seem to be two kinds of states: those with existing solid research institutions, recognized intellectual leadership, and a strong established industrial base, and those who believe they can in some way create all of that quickly, and almost from scratch, with relatively modest amounts of money invested as seed capital as part of a public/private partnership. There is some thought that what will emerge in those areas is a national ecosystem that looks like major league baseball, with elite teams of companies and researchers in the regions with a current head start, and a “farm system” of smaller feeder clusters that produce innovations and talent that eventually are “drafted” and acquired by the elite teams.
It was particularly interesting to hear one area of commonality across the country: the way that states are abrogating the responsibility for workforce training and career education to industry. While the public college and community college systems remain important sources for new workers, funding is a challenge in every state. The result is that the quality of graduates is declining in both basic skills and even advanced subjects (including engineering), at the same time that industry is demanding and requiring a more capable workforce. Either explicitly through policy or implicitly through spending priorities, states across the country are saying, in effect, “Business, you want more? Okay, knock yourselves out training the people we send you. You know what you need better than we do, so have at it.” Leadership is reluctantly coming from businesses who see this as survival issue, but worry that the associated costs will be significant over the long term.
Overall, optimism is the order of the day for the manufacturing sector. There are challenges across the spectrum of industries and geographic regions, but overall my peers are seeing growth and investment on most fronts.