Data Highlights Crisis in Manufacturing (Infographic)

By Dora Smith

guest blog post by Bill Boswell, senior director of partner strategy, Siemens PLM Software

Are we on the verge of a crisis in manufacturing? Three circumstances – a global aging workforce, increasing product and process complexity and an education skills gap – are converging right now. Each of these issues individually is a challenge but combined they could create a crisis in manufacturing.

See more details in the infographic and article below.

Global Aging Workforce

Every day, around the world, our global workforces are getting a little older. The statistics are startling. Since Jan. 1 of last year, every day, 10,000 baby boomers turn 65. That is going to happen every single day for 19 years. It is estimated that within five to 15 years the retirement of skilled baby boomers will create a workforce shortage of 10 million additional workers by 2020. This “trend” is not offset by a younger generation taking its place. How will we overcome the brain drain this creates? How will we keep older workers productive longer? How will we compete to hire the best younger workers for our companies?

A recent survey by Deloitte and the National Manufacturing Institute found “the hardest jobs to fill are those that have the biggest impact on performance.” Nearly 75 percent of survey respondents reported workforce shortages or skills deficiencies significantly impact their ability to expand operations or improve productivity.Manufacturers noted that access to a highly skilled workforce is the single most important factor for future business success – more important than new product innovation and increasing market share.

Increased Product & Process Complexity

Set aside the complexities of global economies and global supply chains for a minute and focus on product and process complexity. The products we design, build, test, manufacture, sell and use today are typically not just mechanical anymore.

They include electrical, electronics and software. They require systems engineers to design and put it all together. They require sophisticated materials, processes and manufacturing facilities to build them. This increased complexity means we need more technically skilled people. We need to go back to school and better align academia to industry.

Education Gap

Only 1.5 percent of 25-34 year olds in the workplace gained a higher education degree in a science-related field, putting the U.S. in the bottom third of developed countries. Projections indicate that by 2020 we will have 1.5 million too few graduates compared to employer demand.

Despite the worldwide economic slowdown in previous years, there still were 3 million engineering graduates needed in 2010 (the last year global statistics are available). There were only 2.25 million available. The shortage is not just engineers. It is the entire workforce that builds and supports complex products.

Just in the U.S., recently according to the president’s job council, there are 3.3 million job openings. Many go unfilled for months as roughly half of employers say they are having a hard time finding the right qualified workers to hire, especially in science, technology, engineering and math (STEM) fields.

STEM jobs are central to economic competitiveness and growth and are projected to grow at twice the economy by 2018. STEM jobs provide good wages for every level of education.

Given all these good things about STEM jobs, we need to redouble our efforts to train the next generation in technical skills.

Averting the Crisis

So how do we avert the impending challenges? Every one of us has to get more involved. There is opportunity to change this at every level.

The first, most immediate opportunity is with students already in the education system. Let’s engage those already interested in computers and math with strong applied skills programs.

Industry-focused real-world projects are where the rubber meets the road. Look at General Motors (GM) and the U.S. Department of Energy (DOE)’s EcoCAR 2 program. Managed by Argonne National Laboratory, EcoCAR 2 challenges collegiate students to compete in a three-year competition to develop energy-efficient technologies to help reduce the nation’s dependence on foreign oil. Many of those students are quickly recruited by program sponsors.

Let’s expand this to other industries.

Second, while this is a national and even global challenge, let’s focus locally. Community colleges are uniquely qualified to retrain workers. Look at what Iowa Western Community College (IWCC) did.

They created an advisory board of local manufacturers and developed an updated curriculum to address the skills gap. They are revitalizing manufacturing. We’ve worked with IWCC to now provide this same blueprint around the world. Graduates earn a complete two-year PLM associate’s degree.

Third, let’s do more to encourage women to pursue STEM. Although women fill close to half of all jobs in the U.S. economy, they hold less than 25 percent of STEM jobs. We need many more Sally Rides.

Finally, let’s increase our involvement with students from kindergarten through high school.

So I challenge you to get involved in one of these four areas. If each one of us working in engineering and manufacturing mentored just one young person to choose a STEM career, we would avert this crisis.

We’re not getting any younger, but we can sure work together and work smarter to avert this crisis. The infographic points you to two resources listed below from us. Additional supporting articles are referenced below.