Cover Story: State of the Industry 2017-2018

November 9, 2017 No Comments
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Changing Channels: Tomorrow’s Opportunities

by B Kyle


As the pace of transformation within the manufacturing industry accelerates – the digital and physical worlds converging and much of the skilled workforce retiring – manufacturers face a set of new and evolving challenges.

Primary among these challenges is the issue of talent – ranked by global manufacturing executives as the #1 driver of manufacturing competitiveness.(1) It is estimated that the U.S. manufacturing industry will face an expected shortage of two million workers over 2015 – 2025 due to factors such as:(2)

  • Availability of qualified workforce.
  • Changing dynamics of the skillsets needed for advanced manufacturing.
  • Perceived attractiveness of the industry among the general public.

We also are seeing a change in generations. Over $42 billion is changing hands from one generation to another … right now. More than any other time in history. Business owners are retiring, the next generation is taking over or companies are being sold to non-local, corporate entities.

The good news: business is good.

The challenge: how do we tackle the “next” industrial revolution ahead – that of employment and perception?

The results of Deloitte and the Council on Competitiveness, 2016 Global Manufacturing Competitiveness Index, clearly show the ongoing influence manufacturing has on driving global economies. From its influence on infrastructure development, job creation, and contribution to gross domestic product (GDP) on both an overall and per capita basis, a strong manufacturing sector creates a clear path toward economic prosperity.(3)


Down to a more granular level, manufacturing in Minnesota continues to grow. 2017 and 2018 both look to be solid years, certainly good news for the state’s economic prosperity.

  • In the August 2017 Manufacturing ISM® Report on Business®, the PMI® was at 58.8 percent. And the rate of month-over-month increase is growing. The overall economy grew for the 99th consecutive month. General comments from those surveyed indicate overall optimism about the market through 2018, and strong production levels.
  • As of September 2017, Minnesota’s unemployment rate was 3.7 percent. Nationally, that number was 4.2 percent (U.S. Bureau of Labor Statistics).
  • Nationally, the number of unemployed persons per job opening is at its lowest point since 2002, with 1.2 persons per job opening. In 2009, at the height of the Great Recession, that number was 6.6 persons per job opening (U.S. Bureau of Labor Statistics).
  • Minnesota has close to 8,000 manufacturers and 332,000 employees (13 percent of private sector jobs in the state) – and we are growing. Employment in this sector has risen almost over 10 percent since 2010. Nationwide as of August, manufacturers have added 155,000 jobs in 2017 (Minnesota Department of Employment and Economic Development).
  • Each manufacturing job supports 1.9 jobs in other sectors of the economy equaling 36 percent of all Minnesota jobs that are in, or supported by, manufacturing (Minnesota Department of Employment and Economic Development).
  • Manufacturing continues to represent the single largest private sector component of Minnesota’s GDP totaling $48.2 billion or 16 percent of Minnesota’s total GDP. That’s a full $10 billion ahead of the second largest sector, real estate (Minnesota Department of Employment and Economic Development).

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We are in a critical time for small manufacturers. Almost 3.5 million manufacturing positions will need to be filled over the next decade as Baby Boomers retire, and 2 million of those jobs could remain vacant because of manufacturing’s fading appeal to millennials, according to a 2015 study by Deloitte and the Manufacturing Institute.(4) This is up from earlier estimates of 600,000 unfilled jobs going forward.

What do we know about Millennials?

Millennials, more than any other modern generation, are entrepreneurial in their thinking and are looking for contract relationships to allow for more flexibility and independence:(6)
More than 77 million millennials are in/entering the workforce, representing approximately 25 percent of the U.S. population.

  • Millennials prefer jobs that are technology based. Generally, they consider manufacturing jobs “boring” or “outdated.”
  • Millennials value flexibility more than pay.
  • Millennials are more entrepreneurial, looking for future opportunities and how they can contribute to a company’s “big picture.”
  • Millennials prefer a casual workplace, and they don’t separate their personal and professional lives.
  • Millennials like a flat organizational structure that promotes collaboration, not hierarchy.

The casual nature of many manufacturing facilities would seem to be of value to this generation. The best news is that manufacturing careers can be both high paying and exciting. As indicated by an Industry Week Salary Survey, 87 percent of manufacturing professionals are satisfied with their careers and 42 percent are very satisfied. According to this same study, pay for managers in the manufacturing sector averaged $111,480 per year in 2016, which is an $8,000 increase over the previous year. So, millennials can get the best of both worlds – good pay and job satisfaction. (7)

According to the U.S. Chamber of Commerce Millennial Report,(8) manufacturers should change channels in terms of how we think about this next generation because they bring new skills while still supporting strong values:

  • Millennials are technology savvy, with a “digital sixth sense.”
  • They are optimistic: 41 percent of the people in this generation are satisfied with the way things are going in this country, compared to only 26 percent of those over 30.
  • Millennials excel at multi-tasking.
  • Similar to earlier generations, millennials care about those in need, and this population desires a strong family life.

Where is the Opportunity?

What we need to convey to the next generation is that manufacturing is an incredibly advanced industry. We are leveraging the disruptive technologies of – just to name a few – 3D printing/additive manufacturing, big data, mobile computing, and nanotechnology.

Figuring out how to engage millennials is truly the challenge ahead. This is our opportunity to continue fueling our emphasis on technology, innovation, and digitization – areas in which the younger generation more naturally excels.

  1. Can we embrace the technology opportunities brought by the younger workers, who have grown up in the internet/information economy? They want to use technology to socialize, multi-task, collaborate, and connect.
  2. Is there an opportunity to change channels in terms of how we work? Can we contract with millennials who want to hold onto their independence while providing fee-for-service work on a contract basis?


The Pratt Center for Community Development, in collaboration with PolicyLink and the Urban Manufacturing Alliance, recently launched a project called the Equitable Innovation Initiative (EIE), a multi-year project intended to help cities pursue more inclusive growth strategies in innovation and manufacturing.

Cities are finding that supporting manufacturing can help build the urban economy, improve economic equity, and support minority job creation. Government certainly likes this idea because urban manufacturing can help counter the trends in land use, global trade, and technology that are eroding middle class jobs.(9)

The opportunity for Minnesota’s manufacturers? No matter your location, the question of equity is a good one.  As manufacturers continue to struggle for new employees, exploring the opportunity from the perspective of equity could be interesting – are there other potential employee pools we are not tapping into for some reason? Is there an unconscious bias in terms of where we are posting for new employees and where we are not? Can we, perhaps, build new connections with a nontraditional workforce, with new people groups, who could be introduced to manufacturing – and trained internally?

YES. No doubt about it, the vast majority of Minnesota’s manufacturing workers are white males. But the change ahead should give us pause. The U.S. is in the midst of a profound shift in our economy and demographics. According to the U.S. Census Bureau, people of color will comprise a majority of the U.S. population by 2044. As of 2017, already 46 percent of all youth are of color.


Where is the Opportunity?

Manufacturing is an important industry of opportunities. This is a sector that can provide jobs with decent pay and benefits to people with less than a college degree. In fact, for non-college educated workers, the average wage in manufacturing across the U.S. is 10 percent higher than in non-manufacturing jobs.(10)

What is exciting for manufacturers participating in the equity conversation is the potential to create new employment opportunities for the community as well as new hiring pools for themselves. To my way of thinking, this is an economic imperative. The future is now.

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In previous issues, Precision Manufacturing has reviewed a host of new manufacturing technologies.  Their possible applications continue to dominate the news. Today more than ever before, disruptive thinking, changes, and innovation are required for manufacturers to keep growing. Indeed, never has there been a better time to try new things, rearrange your business, create your own disruptions. Because gone are the days when reacting to change is enough.

In part, this points back to the need to invest in this next generation of employees, and their completely disruptive way of approaching work. We can learn from them as we bring them in to harness the technology opportunities at our disposal. There is more at risk for those who choose not to participate, than for those who do.(11)

  1. 3D printing/additive manufacturing. Within a few years, the technology has evolved so much that it is now possible to produce almost any component using metal, plastic, mixed materials, even human tissue. It has forced engineers and designers alike to think very differently about product development.(12)
    This is changing manufacturing in other ways as well. With the next generation of entrepreneurial thinkers, those who want to run their own operations and who have a never-before-seen command of the internet, has grown a “maker movement,” driving on-demand design and manufacturing through an online supplier network. This is but one example of a new distributed manufacturing strategy, that could transform the traditional labor market. (13)
  2. Nanotechnology. The technology of the future, whose first generation is already here. It involves the manipulation of matter on atomic, molecular, and supramolecular scales; thus, bringing with it super-precision manufacturing. Currently applied mostly in space technology and biotechnology, it is going to play an indispensable role in every manufacturing industry in the future. (14)
  3. The Internet of Things (IoT). By connecting sensors and machines to the internet via software, they become part of an intelligent network that can automate information, solve problems, and optimize plant floor performance. This leads to predictive analysis that can improve machine performance, even identify upcoming maintenance issues before they occur. Manufacturers can achieve near-zero breakdown machine performance.(15)
  4. The Cloud. Connecting via the Cloud is speaking the language of the next generation. And it is the next logical evolution in applying lean manufacturing principles. Cloud computing is the practice of using a network of internet connected equipment to run operations and share information. Manufacturers can connect machines, improve quality control, and increase the speed of production. Training can be standardized and always available through online training. Engineers can share information via online networks and “institutionalize” the knowledge of those who soon may be retiring. Production managers can compare line performance on various machines, even establish an online troubleshooting library for users. No matter how you use it, the Cloud can lead to efficiency gains. (16)
  5. Next generation robotics. Increasingly capable robotics or robotics tools, with enhanced “senses,” dexterity, and intelligence, can take on tasks previously thought too delicate or uneconomical to automate. A primary example of the successful application of robots, of course, is in automotive manufacturing, where they are used extensively in welding, material handling, and painting processes. (17)

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Where is the Opportunity?
Employing emerging and disruptive technologies is one way to grow faster than the “new normal” of incremental growth. Take market share from more traditional players. Use digital platforms to find next generation employees. Institutionalize the knowledge of your senior employees so, when they leave, they don’t take all their experience with them.

Deloitte, the National Association of Manufacturers, and the Manufacturing Institute conducted their sixth survey in 2017 to gauge the U.S. perception of the manufacturing industry: A Look Ahead: How Modern Manufacturers Can Create Positive Perceptions with the U.S. Public. (18) The overwhelming conclusion? Manufacturing matters to the American public. But why are so many Americans not interested in pursuing manufacturing careers?

According to survey results: “In the mind of the average American, many of the current perceptions of manufacturing haven’t kept pace with advances in the industry, leaving a gap between perception and reality in terms of critical factors such as job stability, pay, and benefits.”

Indeed, the survey results indicate that, while eight in 10 surveyed continue to see manufacturing as vital for economic prosperity, fewer than five in 10 believe manufacturing jobs are interesting, rewarding, clean, safe, stable, and secure. And fewer than three in 10 are likely to encourage their children to pursue a manufacturing career.

This is despite an overwhelmingly optimistic view – among those same survey respondents – that future manufacturing jobs will require high tech skills (88 percent) and will be clean and safe (81 percent), as well as more innovative (77 percent). Given these findings, manufacturers can tap into this “future vision” to attract people to this sector today.

Where is the Opportunity?
We can work toward improving the perceptions of the industry and capitalize on this optimistic view of what’s ahead in manufacturing, to make manufacturing a preferred destination for top talent. We can:

  • Invest in programs directed toward skill development and certification programs. One example of this is the MPMA-championed Youth Skills Training Program.
  • Staff school advisory boards and curriculum committees, to guide future school programming. MPMA members do this work all across Minnesota.
  • Raise awareness of the benefits of a manufacturing career and opening your doors to the public. MPMA participation in Tour of Manufacturing events do this.
  • Look to new demographic groups like females, millennials, new people groups. Make them strong recruiting targets and, ultimately, brand ambassadors for manufacturing.

Don’t let prior knowledge be the enemy of what may be next.pm_endmarkblue-e1320337140493


  1. Deloitte and the Council on Competitiveness, 2016 Global Manufacturing Competitiveness Index.
  2. Deloitte and Manufacturing Institute, The skills gap in US manufacturing 2015 and beyond.

B Kyle is the editor-in-chief of Precision Manufacturing Journal, the past president of the MPMA, and the President/CEO of the Saint Paul Area Chamber of Commerce. She can be reached at

Copyright © 2017 Minnesota Precision Manufacturing Association. For permission to use or reprint this article please contact Nancy Huddleston, publications manager for Precision Manufacturing Journal.

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