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Guest Columnist: Jack Healy

Opportunities for Growth in Manufacturing

By Jack Healy, Of Counsel
[email protected]

"It has been noted that after a decade of decline (2000-2010), the United States Manufacturing Sector has now added 800,000 jobs since February 2000 and remains the most competitive today for jobs and investments, when compared to recent decades."

VIDEO: Why some manufacturers are returning to the U.S.

Unfortunately, this positive statement does not pertain to the New England Region, which, along with the state of Massachusetts, is still struggling to reach pre-recession levels of productivity.

In a Bureau of Economic Analysis annual survey of Massachusetts manufacturers, they compared metrics from 2014 to 2007, the year prior year to the recession. The results clearly illustrate how far we still need to go just to get even.

Metric Comparison  Variance from 2007
Employment – 23 %
Production Workers Hrs. – 22 %
Cost of Materials +  6 %
Total Value of Shipment –  2 %
Total Value Added –  7 %

It should be noted that, prior to 2014, Massachusetts Manufacturing was making a respectful recovery, increasing overall value added by 14%, only one point lower than IndustryWeek’s "Best Plants" average for a similar three-year period.

The lack of sales growth and subsequent recovery path is similar for all of the New England states and was accompanied by a contraction in employment levels.

Last month’s MassMEP Next Generation Manufacturer News asked the question, "Why didn’t German manufacturers have the same employment losses as a result of the recession?" The answer, in part, is that the small to medium-size German manufacturers dominate the manufactured product sectors in which they operate. A 2007 study found that over 1,130 small to medium-size German manufacturers held the number one or number two position in the world markets for their products, or the number one position in the European market. The question for this month is how many of our own manufacturing enterprises could duplicate a similar market performance?

There is now a general awareness, given our high-cost operating environment, that enterprises in low-skilled tradable manufactured goods are now seeking new innovative products and or new market opportunities in order to survive.

This was demonstrated in the results of the recent Boston Consulting Group 10th annual global survey of the state of innovation. They found that "79 % of the respondents ranked innovation as either the top priority or top three priority of their company." The survey also indicated that science and technology continues to be seen as the essential underpinnings that will enable such innovation. 

When close to 80% of the large manufacturing firms surveyed listed Innovation as a growth strategy, you can expect that there will be a similar response throughout the supply chains of these large firms that will require the majority of suppliers to improve their overall technical capabilities.

Support for this evolving Innovation Strategy is being well positioned by the new historic transformational public private initiatives of the National Network of Manufacturing Innovation

These Innovation Institutes are successfully developing organizations and services:

"From the very first manufacturing institute pioneering novel 3D printing technologies in Youngstown, OH, to the most recently awarded institute pushing boundaries of advanced fiber and textile technologies in Cambridge MA, each of the now nine institutes is part of a growing innovation network dedicated to securing the U.S. technological leadership required to win the next generation of advanced manufacturing."

These Institutes, each led by manufacturing experts renowned in their field, have attracted nearly 1,000 companies, universities, and non-profits as members. The Federal government’s commitment of over $600 million to the current nine awarded Institutes has been matched by over $1.2 billion in non-Federal resources from across industry, academia, and state governments. Together, these resources are providing a unique opportunity for manufacturers to differentiate their products and processes, and position their companies to compete globally.


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