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AN ~~ a Phyllis Eisen, Vice President The Manufacturing Institute National Association of Manufacturers (NAM) While it appears that everything has changed in our economy over the last two years, in reality some things have not changed. Productivity remains high despite the slow economy, and the demand for skilled work- ers in the high-tech world of manufacturing is still very real. In NAM's latest workforce survey of U.S. manufacturing employers, 80 percent of respondents said that they had a serious problem finding qualified candidates for the highly technical world of modern manufac- turing. Over 60 percent said they could not continue the levels of produc- tivity and satisfy customers with today's workforce. The lack of workforce readiness, math and science competencies, and ability to work in a prob- lem-solving, critical-thinking atmosphere was hampering their ability to stay competitive. In a disturbing response, manufacturers reported for the first time that the quality of their engineering and research profession- als concerned them. And always, their attitude about U.S. schools prepar- ing a future skilled workforce was negative and despairing. This was not a pretty picture. Certain powerful economic, social, and demographic forces underlie and contribute to the persistent skills shortages in the manufacturing workforce. These same forces will continue throughout the next two de- cades and beyond. First, the relentless advance of technology is immutable. New tech- nologies, primarily computers and the Internet, but also new materials and new processes, have infused manufacturing from design to produc- tion, inventory management, delivery, and service. These technologies increase both productivity and product quality. In most respects, manu- 134

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~~t ~~N OF MANUEAc~s ~ '5 few 1LJ~ factoring jobs are technology jobs, and workers at all levels must have a degree of technical competency required by their equipment and pro- cesses. The bar is continuously rising. Employees at all levels must be continually re-skilled, and students in the education system and new en- trants must be technologically prepared if the U.S. economy is to retain its competitive edge in a global economy. The good news is that manufacturers have been aggressively training and educating their employees in new technology skills during the last five years. The NAM survey was clear: Less than 45 percent said they need employees with computer skills, and the need for IT workers has significantly diminished. This was a big change from 1997 when over 70 percent said they were desperate for these skills. An important note is that the business community spent over $100 billion in workforce educa- tion and training per year over the last couple of years. No small chump change. The rub is that young people are taking less and less rigorous math and science, starting with middle school, than ever before at the same time that math and science and technical skills are increasingly neces- sary for the high-tech world of manufacturing. This is further compli- cated by the fact that engineering and manufacturing is an honored pro- fession in other parts of the global economy as it was in the U.S. post-World War II through the 1970s. We are hollowing out the core of what has been the mainstay of U.S. economic growth. This is a grave error. As a result, the NAM and the Department of Commerce, and now joined by the Department of Labor, created GetTech, a multimedia and education initiative to help guide young people, educators, and parents on the necessity of taking science and math to be prepared for the 21st century workforce. Please see for more information on this career exploration site. A second force is the demographic imperatives we all face. We are simply getting older. We know that the massive cohort born between 1946 and 1964 the so-called baby boomers are moving toward retirement. They have been the most skilled generation in U.S. history. By 2020, most will have left the workforce. Their retirements will peak in 2010 only seven years away. The average skilled employee in most manufacturing firms is between 55 and 60 years of age. What is less obvious is that the native-born U.S. population has, for all practical purposes, achieved zero population growth. As a result, current and near-term growth in the labor force will come from immigrants and their children. Some of these immi- grants are skilled; many are not. This is a numbers game with serious consequences unless we fill our workforce pipeline now. Finally, global pressures continue to dominate both our business and our personal lives. The rest of the world matters as never before. Although

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i36 PAN-~CANIZAHONAL SUMMIT manufacturing is still the greatest contributor to our growth and produc- tivity and U.S. workers are still the most productive in the world, in a global economy, manufacturers face unprecedented challenges. Even small companies in rural areas might now compete with, sell to, or receive supplies from companies and markets half a world away. To continue to succeed, U.S. manufacturers must compete less on cost than on product design, productivity, quality, and responsiveness to customer needs. These competitive mandates put a high premium on the skills, morale, and commitment of workers. The nation's fixation on four-year college attendance intensifies. An educated citizenry and workforce is a nation's greatest asset, and educa- tion is a key to personal and economic fulfillment. But manufacturers are not alone in pointing out that a fixation among high school teachers and counselors, students, and parents on a four-year university education immediately following high school makes young people shun other at- tractive options, leaving alternative career paths starved for attention and resources. While manufacturers strongly support a world-class university system (and pay heavily for research and scholarships) as well as work- based learning and internships, they also point out that many satisfying, remunerative jobs in the future will increasingly require a technical cer- tificate or an associate degree beyond a high school diploma. These op- tions deserve equal time from school guidance counselors and curricu- lum designers and equal consideration by students and parents. A more serious skills gap looms. These technical skills, with a strong math/science background combined with problem-solving, critical-think- ing, and teamwork skills are sorely needed by modern manufacturing as well as by other sectors. The challenge before us is how to close the gap. One way is to have more U.S. workers, native-born or immigrant, receive the right amount and level of training and education to enter and succeed in the workplace. Or we could bring more skilled immigrants into the U.S. or continue to take our jobs off shore. The choice is ours. And we do not have a choice. This is a national shame, which should be at the top of all our to-do lists. Until that changes, we will continue to tinker around the edge of workforce excellence in the U.S. and our domi- nant place in a global economy. The skills gap we have identified in our studies and surveys is the result of long-term forces. They will yield only to long-term solutions. Right now, the sluggish economy needs to be helped by policies that pro- mote economic growth. Economic growth is, of course, the predicate for a skilled workforce. In addition, people displaced by the slow economy need their traditional supports by our workforce and compensation sys- tem. But while these short-term responses are necessary right now, long-

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t ~~N OF MANUEAc~s term solutions must also be forthcoming if the U.S. hopes to achieve a real and lasting solution to the skills shortage. Next, it is imperative that our young people should expect and par- ents should demand a rigorous, disciplined K-12 experience with world- class standards. It is also a necessity to improve our technical training systems and attract jobs challenging careers in manufacturing with high pay and full benefits that require an education level between high school and a four-year college. A long-term vision of a skilled and productive technical workforce in modern manufacturing is what is required today from the government, from the educational system, from every company and every CEO and employees making the things that make America work. The U.S. economy has always rested on the bedrock of manufacturing: This remains so de- spite the fact that U.S. manufacturing is in transition in a global industrial economy. The choices made today in education and public policy will af- fect the competitive strength of the U.S. tomorrow and well into the future.