Wednesday, October 27, 2010

Innovation and Job Opportunity in Manufacturing

One of the central points in my new book, 2011 Career Plan: The Best Moves Now for a Solid Future, is that it’s important to upgrade your skills if you want to compete in the economy of 2011. The book has many specific suggestions for how to do this. But maybe you’re wondering why a high level of skill is so important.

It’s because of the current nature of our economy. The days are long past when an American kid fresh off the farm would be put in front of a machine that stamps out auto parts (or something comparable), could learn how to use that machine in a few minutes or hours, and would take home a comfortable paycheck at the end of the week. Those hayseeds-turned-factory-workers are now working in China and other low-wage countries.

But does that mean manufacturing in America is dead? Not at all. Manufacturing was actually one of the first industries to bounce back from the depths of the recession. It has seen its growth slowing in recent months, but no more so than almost all other industries. This week, Ford Motor Company reported that it just had its most profitable quarter ever, netting $1.69 billion and paying down it debt faster than planned.

Innovation is what has kept American manufacturing successful and will allow manufacturing to continue to provide jobs. It’s particularly striking to see how manufacturing compares to other industries in a study (PDF) by the National Science Foundation that looks at innovative products and processes. NSF surveyed 1.5 million for-profit companies and asked them about their practices for the years 2006–08.

The study found that “22% of the manufacturing companies introduced product innovations (one or more new or significantly improved good or service) and about 22% introduced process innovations (one or more new or significantly improved method for manufacturing or production; logistics, delivery, or distribution; support activities).” Compare this to the mere 8% that is reported for both kinds of innovation in the nomanufacturing industries.

I’m particularly interested to note that the 22% figure applies to both kinds of innovation. It indicates that the high level of innovation is motivated by more than just the need to compete with low-wage overseas workers. If wage competition were the only issue, American manufacturers would simply be upgrading their processes--for example, using more robots or economies of scale. But American manufacturers are being equally innovative in the products they offer. New products open new markets and draw new purchases from existing markets.

What does this mean for job opportunities? If all the innovation were happening only in manufacturing processes, most of the resulting jobs would be for engineers and engineering technicians. But new product development (NPD) is a multidisciplinary field that also involves marketing managers, technical writers, artists, commercial designers, logistics specialists, cost estimators, and perhaps even anthropologists. (Not long ago I did a presentation for an NPD team, and the most effective presenter that day was an anthropologist.) NPD work is highly collaborative, so it requires excellent people skills and communication skills. It also requires a high level of creativity.

So America’s most innovative industry sector is going to need a wide variety of highly skilled workers. This drives home the most important point in 2011 Career Plan, that today’s economy requires you to hone your skills.

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