America's growth depends on manufacturing, says survey
Written by Eileen Markowitz, President, ThomasNet
Twenty years ago, Matt Eggemeyer never dreamed that he would become wedded to manufacturing for the rest of his life. Newly minted with a bachelor’s degree in history, he thought a desk job in banking awaited him. But when his mother urged him to give his family’s custom manufacturing business a try, he honored her wishes and never looked back.
Today, he is Chief Operating Officer of Keats Manufacturing just outside of Chicago, and his greatest pleasure is engaging young people in the career that has become his passion.
In the decades since Matt waded into the family business, technology has invigorated his company, and enriched his professional life, in ways he could never have imagined. For example, this year, Keats is investing in a system that can provide 100 different views of the precision metal parts they make so that their production is virtually flawless. This kind of technology not only gives Keats another competitive advantage; it makes every day an exciting learning opportunity for Matt and his colleagues.
Matt is far from an isolated example.
The 1,200 American manufacturers responding to ThomasNet.com®’s latest Industry Market Barometer® survey on their growth and outlook are effusive in describing how technological advances are improving their companies and invigorating their work life. As a result, they are growing, hiring, and increasing their production capacity to meet future demand. These manufacturers say their employees, market leadership, technology, and innovation will help them continue to compete. Nearly seven out of ten (67 percent) will focus on introducing new or innovative products/services this year.
But at a time when innovations like additive manufacturing or robotics are opening new opportunities for manufacturers, a crack is slowly forming in this positive picture. Our research reveals a lack of talent from new generations that threatens this sector’s future.
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The companies that we surveyed are representative of today’s manufacturing workforce, which is heavily populated by employees who are 45 and older. With Generation Y (18-32 years old) expected to make up 75 percent of the workforce by 2025, and Baby Boomers retiring in droves, manufacturing’s “biological clock” is ticking away.
Indeed, a closer look at our findings reveals a disconnect between the growth of these manufacturers, and their lack of urgency recruiting fresh talent to learn the business before older generations exit. Eight out of ten manufacturers report that Generation Y represents a small fraction of their workforce, and most don’t see this changing soon. The findings point to a need for a collective “succession plan” for the manufacturing sector—starting yesterday.
Todd Berg, President and CEO of Liftomatic, knows firsthand why this matters. Todd’s Chicago based company makes drum- and barrel-handling equipment for customers like Smucker’s, Campbell Soup Company and DuPont. This year, one of their clients tapped them for a lucrative job full of technological complexities that they would have had to turn away five years ago. This time, with a new crop of tech-savvy employees, they were able to handle the job, and sold the product for five times the price of their average order.
For Todd, this is just one example of why companies need to look for new talent at every turn. With decades of experience in manufacturing himself, he is amazed at how requirements for success have changed in a few short years. Now inside sales and customer service staff need to understand social media and web analytics to excel.
Contract manufacturing managers must be adept at the latest supply chain management and logistics software. By complementing the judgment and experience of long-term staff with the fresh perspective of entry-level employees, he is able to take Liftomatic to new heights. Last year, sales of Liftomatic’s core products grew almost 10 percent.
Matt Eggemeyer, too, knows that nurturing fresh talent is fundamental to his company’s future. He is constantly persuading neighbors and “friends of friends” in career transitions to give Keats Manufacturing a try. “I don’t find trained manufacturers; I make them,” he says, and his creative approach pays off. Last year, Keats hired and retained fifteen new staff members (average age 25), bringing the total number of their employees to 106.
For Matt and his peers, these efforts aren’t always easy. Most of the respondents to our survey (73 percent) believe that young people still have negative perceptions that deter them from considering manufacturing jobs. They wish they could draw back the curtain, and show the naysayers what they know so well: that the rewards of manufacturing are unparalleled. These manufacturers are vocal about the satisfaction they gain from creating something tangible, working in an environment of constant change, making a difference to customers from around the globe, and contributing to their country’s economic well-being.
Many of these manufacturers have developed partnerships with schools to engage their “best and brightest,” and they consider educators important for their future. They continue to call on high schools to offer more skills training, and to increase their emphasis on science, technology, engineering, and mathematics (STEM).
These strategies, though, are just the tip of the iceberg. Rising generations need more than STEM knowledge; they need to understand why the companies that will value their backgrounds will nourish their lives and their souls.
As a foundation of our economy, the manufacturing sector is strong, and technology continues to give companies more opportunities to grow. For example, manufacturers’ websites are their number-one business-building tactic, online or offline.
The hard truth, though, is that changes in workforce demographics threaten to override these gains. For the manufacturing sector to benefit most in this era of innovation, those who love the industry need to step up efforts to share their passion with the next generation.
Whether we’re talking with our children about their dreams at the kitchen table, taking them on plant tours during Manufacturing Day events, or bringing manufacturing speakers to schools during career fairs, we need to wear our hearts on our sleeves.
A few words from Matt Eggemeyer’s mother changed the course of his life, and made him fall in love with his career. With a similar approach to engaging the next generation, starting at the grassroots level, we can grease the wheels of this $1.9 trillion sector, carrying it toward an even more vibrant future.
About the author
Eileen Markowitz is President of ThomasNet, an information and technology company that connects buyers and sellers in industry and manufacturing. To download a free copy of ThomasNet.com’s Industry Market Barometer, go to www.thomasnet.com/imb.
How innovation is transforming government
According to Washington Technology’s Top 100 list, Leidos is the largest IT provider to the government. But as Lieutenant General William J. Bender explains, “that barely scratches the surface” of the company’s portfolio and drive for innovation.
Bender, who spent three and a half decades in the military, including a stint as the U.S. Air Force’s Chief Information Officer (CIO), has seen action in the field and in technology during that time, and it runs in the family. Bender’s son is an F-16 instructor pilot. So it stands to reason Bender Senior intends to ensure a thriving technological base for the U.S. Air Force. “What we’re really doing here is transforming the federal government from the industrial age into the information age and doing it hand-in-hand with industry,” he says.
The significant changes that have taken place in the wider technology world are precisely the capabilities Leidos is trying to pilot the U.S. Air Force through. It boils down to developing cyberspace as a new domain of battle, globally connected and constantly challenged by the threat of cybersecurity attacks.
“We recognize the importance of the U.S. Air Force’s missions,” says Bender, “and making sure they achieve those missions. We sit side-by-side with the air combat command, intelligence surveillance, and reconnaissance infrastructure across the Air Force. There are multiple large programs where the Air Force is partnering with Leidos to ensure their mission is successfully accomplished 24/7/365. In this company, we’re all in on making sure there’s no drop in capability.”
That partnership relies on a shared understanding of delivering successful national security outcomes, really understanding the mission at hand, and Leidos’ long-standing relationship of over 50 years with the federal government.
To look at where technology is going, Bender thinks it is important to look back at the last 10 to 15 years. “What we’ve seen is a complete shift in how technology gets developed,” he says. “It used to be that the government invested aggressively in research and development, and some of those technologies, once they were launched in a military context, would find their way into the commercial space. That has shifted almost a hundred percent now, where the bulk of the research and development dollars and the development of tech-explicit technologies takes place in the commercial sector.”
“There’s a long-standing desire to adopt commercial technology into defense applications, but it’s had a hard time crossing the ‘valley of death’ [government slang for commercial technologies and partnerships that fail to effectively transition into government missions]. Increasingly we’re able to do that. We need to look at open architectures and open systems for a true plug-and-play capability. Instead of buying it now and trying to guess what it’s going to be used for 12 years from now, it should be evolving iteratively.”