President Barack Obama’s administration has done “more for the advancement of manufacturing” than previous administrations, according to Dave Rowland, president and CEO of the Oklahoma Manufacturing Alliance.
Rowland was in Fort Smith on Oct. 7 to share some of his thoughts about the future of the manufacturing industry with attendees at the Fort Smith Regional Chamber of Commerce’s First Friday Breakfast. In comments to Talk Business & Politics after the event, Rowland gave Obama good marks for his encouragement of advanced manufacturing initiatives.
“I think the current administration has done more for manufacturing over the last eight years especially towards this particular strategy,” Rowland said. “They’re very supportive toward the technology institutes, the innovation institutes, the curriculum. So I think that particular profile is what we need to go forward.”
When asked to weigh in on the current Presidential election, Rowland said, “based on what we’ve seen from the Obama administration and the fact that Hillary and the Democrats are running on much more of the same, that is probably – at least as we understand things today – a positive platform for manufacturing.”
One point Rowland emphasized in his First Friday address was the need for lower tax rates and consistent reform for manufacturers in order to stay competitive with advanced manufacturing markets like China, Germany, and Japan. When asked if he had any concerns out of the two candidates on tax reform, Rowland said, “I could look at both parties and say, ‘You know the Republican side is going to reduce taxes to unforeseen levels.’ But there are some issues with that. Obviously, if it doesn’t raise enough revenue to continue the programs that we have, that’s a problem.”
He continued: “Frankly I haven’t seen any policy statements on the Republican side to continue this strategy going forward with advanced manufacturing. So if we understood their (Republican) policy a little better it would be helpful to know what direction we would consider going.”
MANUFACTURING IMPACT AND FORECAST
In his First Friday address, Rowland provided details on where U.S. manufacturing needs to go in the years ahead and what the administration has done to reinvigorate the industry following near collapse in 2009 and 2010 during the Great Recession.
“Back in 2010 President Obama launched a national manufacturing (initiative). It’s a network of technology and manufacturing hubs across the country. Each hub represents a collaboration of private companies, universities, non-profits and the federal government to pioneer breakthroughs in emerging manufacturing. Forty-five hubs have been approved to date,” Rowland said, emphasizing the importance of technological innovation, securing the right talent and improving the business climate as the “three pillars” of America’s manufacturing future.
While the effort has a way to go – just nine are operational – he believes the administration is on the right track.
“Manufacturing came close to collapse in the 2009-2010 timeframe, but I’m happy to say it’s a resurgent industry, and we’ve added 900,000 jobs since 2010, but we’re still falling short of what we need today and in the future,” Rowland said.
Even so, the industry supports more than 17 million jobs in the U.S., he said, and it accounts for $2.1 trillion of the U.S. economy and “roughly 10% of the nation’s GDP. … For each dollar a manufacturer puts out the back door, a $1.35 impact is created. Compare that to retail – 55 cents on the dollar. Finance and investments – 65 cents on the dollar. We need to be looking at how we can prop up American manufacturing.”
On the jobs front, one manufacturing job supports 2.5 jobs, but as advanced manufacturing grows, “it will support 16 additional jobs. So this is why manufacturing is the most powerful economic driver in the world,” he said.
Rowland spent most of his time on the topic of technology innovation. He forecasts the Internet of Things (IoT), CoBots, and additive manufacturing (aka 3D printing) technologies as three of the biggest focus spots for the industry moving forward. Rowland said he envisions a day when there will be millions of manufacturing facilities in the U.S. as opposed to “the hundreds of thousands that currently exist.”
Manufacturing “facilities” will take on a new scope, he said, with the Internet of Things (IoT) providing critical data to manufacturers for future sales, marketing and production needs. Customizable cars will be created through 3D printing technology instead of chosen from a pre-made selection and millions of dollars in inventory. Likewise, crown moldings and hearing aids will be fitted to the wearer and produced in back rooms over a short period of time instead of “something you have to send off for” or pick from a mass-produced selection. 3D-printed homes will even be on the table.
“It’s a little scary. It’s disruptive. But it’s where things are going,” he said.
AI AND THE SKILLS GAP
Rowland also emphasized artificial intelligence through the use of “CoBots” to help bridge the skills gap that will find the industry 2 million workers short by 2025 as baby boomers retire and the 1.4 million in the “talent pipeline” fall short of the 3.4 million workers that will need to be replaced.
CoBots “work 24/7, they don’t get sick, and they only cost about $50, or $60,000” rather than the ongoing expense of an employee.
“I hate to say it, but with the coming skills gap, it’s something we’ll have to take advantage of to supplement,” he said.
Rowland is a proponent of retraining employees toward higher-demand, higher-paying jobs in the manufacturing industry and to think “additive” instead of “subtractive” manufacturing. He also urges communities to talk more positively about careers in manufacturing, saying for too long “we’ve tarnished our image and taught our children careers in manufacturing are dull, dirty, and dangerous.”
“It has created the skills gap, and more than 80% of manufacturers report currently a moderate to severe shortage of workers,” Rowland said. Yet the average wage is $63,000 per year, he said, “and most pay benefits on top of that.”
“It’s not a bad career,” he added.
The much-needed “reeducation” on American manufacturing has taken on an organized front through National Manufacturing Day (the first Friday in October). It involves manufacturers opening their facilities to the public and providing an education on what modern manufacturing is all about, and it seems to be working. It began four years ago with 400 registered events. For 2016, that number has risen to 2,479 with Arkansas and Oklahoma hosting more than 100.