In Colorado we’re ruminating over two reports released last month that rank the state’s manufacturing sector poorly. Tim Heaton, president of the Colorado Advanced Manufacturing Alliance, follows up on a column I wrote about the Conexus Indiana 2016 Manufacturing & Logistics Report Card for the Unites States that gave Colorado a ‘D’ in overall health for its manufacturing sector.
Utah fared better, but not much. Despite ‘A’ grades in three of the eight categories, Utah’s overall grade was a ‘C’, placing it behind such manufacturing juggernauts as Connecticut, Kansas and Tennessee. Both states also did poorly in a Site Selection magazine ranking of ‘manufacturing investments per capita’, a measure of million-dollar capital investments in manufacturing facilities per million residents. Colorado ranked 47th, Utah 39th.
Both Heaton and I found plenty to grumble about, especially in the Conexus report, from dated data to questionable methodology. I suspect that when or if Todd Bingham at the Utah Manufacturers Association gets around to responding he’d have similar issues with data that’s almost three years old, or bias that tends to award legacy logistics and supply-chain infrastructure that today struggles to support emerging growth sectors.
But the data is not without merit. It provides meaningful perspective for those like us who aspire to develop world-class manufacturing ecosystems. Wanna know how far we have to go? Kentucky ranked 1st in per capita investment with 173 manufacturing projects topping $1 million in capital or involving 20 new manufacturing jobs. Colorado and Utah each had nine. Think rust-belt legacy doesn’t matter? Think again.
Colorado’s ‘D’ grade is also focusing the conversation on areas where indeed, the state’s logistics and support network undermines economic development and manufacturing investment. Transportation may top the list. Interstate 70 has a reputation that transcends the state. It's a lesson in inaction Utah policy-makers would do well to learn and not gloss-over.
Utah’s ‘A’s, in Worker Benefit Costs, Tax Climate, and Expected Fiscal Liability Gap, and a ‘B’ in Human Capital underscore its transparent workforce strength, a building block for success in manufacturing. Where other states are forecast to struggle mightily to train and equip a next generation of employees, Utah seems extraordinarily well-positioned in this critical area. Companies like JD Machine, profiled this week in CompanyWeek, are national models in adopting progressive workforce development strategies.
Ironically, Utah’s ‘B’ in Sector Diversity may play more to Conexus bias than communicate a true strength of the sector today. Yes, bioscience, aerospace and advanced manufacturing lead a fairly diverse sector that also boasts industrial food and energy stalwarts.
But manufacturing diversity in the future will also be defined by robust, dynamic artisanal sectors responding to changing consumer tastes that favor locally made food and beverage and lifestyle and consumer products; or feature a wave of start-up, technology-informed manufacturing companies that sustain world-class innovation in whatever form. Is Utah a hotbed of entrepreneurship and innovation in manufacturing, sustained by a progressive vibe that informs business environments in California, New York and even Colorado?
Yes and no. I’ve written extensively about Utah’s emerging leadership position as a hotbed of outdoor industrial development, namely Ogden’s growing ecosystem of lifestyle manufacturing companies and initiatives.
But at times, the cultural attributes that provide economic stability and offer sustained workforce advantages in Utah don’t translate into the state being a trend-setter. For example the natural and organic food tsunami of the past decade, a true revolution that’s changed the way America eats, has been slower to catch on here. It’s altered the economic landscape in neighboring Colorado and farther west in Oregon and Washington, where a food manufacturing renaissance is long underway.
Better late than never. We’re involved in a conversation with innovators in Utah’s natural food and products space to accelerate development of sector that’s simmering just under boil. More on this initiative soon.
On balance, other states like Colorado and California would likely trade manufacturing challenges with Utah as states strive to improve the sector. Workforce is a deep, systemic challenge that requires myriad investments -- and time. Standing-up resources to accelerate growth in promising new sectors feels less daunting. We’re about to find out.
Improving Utah’s ‘C’ grade will be a positive outcome.