How can we ensure innovation, competitiveness, increased income and a better quality of life? The answer, surprisingly, lies in manufacturing. The sector proclaimed dying in western economies could still be the vehicle to improve living standards.
The link between manufacturing and economic growth is critical. Every dollar in final sales of manufactured products supports $1.33 in output from other sectors—this is the largest multiplier of any sector. Manufacturing investments create ripples across the economy, creating jobs and growth in other industries.
But how can we support the manufacturing sector, and therefore the broader, economy at the dawn of the fourth industrial revolution? Our research indicates three crucial factors: a focus on skills, continued innovation and technology, and more public-private partnerships.
A focus on skills. As we enter the fourth industrial revolution and the role of technology increases, the skill set needed to work in the manufacturing industry increases – but many workers don’t get the chance to learn new skills and fill the void. As early as four years ago, the skills gap left 10 million manufacturing jobs worldwide that cannot be filled, and that number seems only to have increased since. The implications of such a shortage are significant; they can have a material impact on both workers’ employment and incomes, and manufacturers’ growth and profitability.
But the situation can be reversed. CEOs and manufacturing executives around the world already identify talent-driven innovation as the number one determinant of competitiveness. Manufacturers are looking to recruit highly skilled workers and are willing to pay more than the market rates in workforce areas reeling under talent crisis. If the skills gap can be closed, both workers and manufacturers can once again thrive.
Continued innovation. Innovation creates new opportunities for manufacturing and the growth of the industry. In order to make the industry globally competitive, manufacturers must leverage new technology. We need to be innovative, adaptable, and accountable in order to take control of our future. By reinvesting in manufacturing, both small and large manufacturers will be positioned to create thousands of high-paying manufacturing jobs, as well as spin-off jobs in other sectors of the economy.
Public-private partnerships. A skilled and educated workforce, or rather the lack of it, is the greatest influence in global manufacturing. The key to closing this growing skills gap is public-private partnership – where the education system provides industry-based training, and is aligned to private sector standards, combined with on-the-job learning, and supported by public policy leaders and civil society. Aligning manufacturing education with industry standards sets high expectations and establishes an effective and critical talent pipeline. It is essential that policy-makers advocate for education and job training policies that strengthen the manufacturing workforce.