Manufacturing looks up, but skills shortage adds complication

In good news for the manufacturing sector, the electronics manufacturing services (EMS) market is projected to grow 14.8% globally and 10.2% percent in North America this year, according to a study released by IPC — Association Connecting Electronics Industries. According to IPC, “The study reveals a reduction in spending on automated assembly equipment this year compared to 2010, but an increase in capital equipment spending overall in North America.”

It's worth noting that despite the relatively good news, the North American market trails the global EMS market in growth this year. IPC hasn't commented on why that is, but one factor affecting manufacturing in general may be a skill shortage among North American workers, as reported recently in the Financial Times. However, one pundit, writing in the Wall Street Journal, contends that if indeed there is a skill shortage, manufacturing companies may have only themselves to blame. And whoever is at fault, at least one institution is maneuvering to close the skills gap.

According to Hal Weitzman writing in the Financial Times, “US manufacturers have 600,000 unfilled positions because of a lack of qualified skilled workers, in spite of stubbornly high unemployment rates and a plethora of new training programmes, according to a report by Deloitte, the consultants, and the National Association of Manufacturers (NAM), an industry body.” A survey showed “moderate to severe” shortages of machinists, operators, craft workers, distributors, and technicians. Further, 56% expect the shortage to become more severe as skilled baby boomers retire. Emily DeRocco, president of The Manufacturing Institute, a division of the NAM, attributed the problem to a lack of industrial policy in the U.S. to build manufacturing competitiveness.

However, the “plethora of new training programmes” cited in the Financial Times article may be illusory, and lack of competitiveness among U.S. manufacturers due to skills shortages may be the manufacturers' own fault, suggests Peter Cappelli, the George W. Taylor professor of management at the University of Pennsylvania's Wharton School and director of Wharton's Center for Human Resources, writing in the Wall Street Journal.

Cappelli says employers are quick to blame schools for not giving kids the right training, but he lays the blame at employers themselves: “To get America's job engine revving again, companies need to stop pinning so much of the blame on our nation's education system. They need to drop the idea of finding perfect candidates and look for people who could do the job with a bit of training and practice.”

Cappelli also notes that many complaints among employers are that they can't get qualified workers at the wages offered. That, he correctly notes, represents an affordability problem, not a skills-shortage problem.

He also cites a lack of flexibility on the part of employers: “Finding candidates to fit jobs is not like finding pistons to fit engines, where the requirements are precise and can't be varied. Jobs can be organized in many different ways so that candidates who have very different credentials can do them successfully.” He further notes that only about 10% of the people in IT jobs during the Silicon Valley tech boom of the 1990s had IT-related degrees. And he notes that college students are increasingly pursuing vocationally oriented courses that could make them amenable to minimal on-the-job training.

One university that's looking to expand its offerings of vocationally oriented course work is Northeastern University. The Boston Globe reports that the Boston-based institution “plans to open a regional campus in Charlotte, N.C., today and a similar outpost in Seattle within the year, with hopes of eventually planting flags in Austin, Minneapolis, the Silicon Valley area, and beyond. The campuses will offer graduate degrees tailored to the workforce needs of local economies….”

A program to be offered in Charlotte is a health informatics master’s program, developed in Boston, which targets Charlotte's growing health care industry.

In a related but discordant note, the government of South Korea seems to be discouraging students from getting a college education. Reports Fred Hiatt in the Washington Post, “…South Korea’s government has decided that too many people are going to college. It is working to restore the luster of a high school diploma as a stopping point for some and to establish a vocational track for others.”

Hiatt adds, “And that has to be sobering for anyone who has assumed that education will be the antidote to the downward-mobility pressures of globalization.” He concludes, “An educated population will still fare better than an uneducated one. But if you think everything will be okay if we can just be a bit more like, say, Korea—well, ask a few Koreans what they think about that.”

Posted 10/31/2011 2:29 PM. Go to top of the “Rick's Blog” main page.

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