National Academy of Engineering: U.S. Must Take Action to Strengthen Manufacturing Innovation, Productivity, and Workforce Training
James Anderton posted on March 04, 2015 |
U.S. companies, government, and educators should partner to strengthen workforce training and improv...

Globalization, technological advances, and changing business practices are dramatically transforming employment and operations across the board in manufacturing. U.S. companies, government and educators should partner to strengthen workforce training and improve innovation and productivity, says a new report from the National Academy of Engineering.   

Manufacturing can no longer be considered separate from the value chain, the system of research and development, product design, software development and integration, and lifecycle service activities performed to deliver a product or service to market.  Businesses focusing on the entire system help make value for their customers and are less likely to be disrupted by new technologies or increased competition from emerging economies around the world.


While technological advances offer companies new ways to understand customers’ needs and in turn increase demand for their products, automation and streamlined operations are likely to supplant an increasing number of workers in a variety of occupations, the report says.  By some estimates, almost 50 percent of U.S. jobs are at risk for disruption.  For example, due to advances in automation and computer-aided design, engineering, and production, an automobile manufacturing plant can now be run by one-third as many people as in 1965, while the quality, sophistication, and timely delivery of vehicles have dramatically improved.  


With reduced demand for production workers, total U.S. manufacturing employment dropped from approximately 19 million in 1980 to 11.5 million in 2010, according to the Bureau of Labor Statistics.  Manufacturing job losses were concentrated in the portion of the workforce without a high school diploma. 


“Advancing skills and creating skilled jobs are the best bet to aid the workforce that has been left behind by changes in manufacturing and the broader economy,” said Nicholas Donofrio, former executive vice president of innovation and technology of IBM, and chair of the committee that conducted the study.  “Access to higher education and training, including certification programs and flexible pathways to degrees, is especially important for lower-skilled workers, who are most affected by the changes.”


In the face of forces changing the manufacturing industry, companies need to find new ways to make value.  For instance, when the rise of digital photography changed the value of film, Fujifilm harnessed its expertise working with the antioxidant chemicals used in photography to develop antioxidants for cosmetics and optical films for use with flat-panel screens.  Although Fujifilm for decades created film and the materials to develop it, film now accounts for only a tiny percentage of its sales.  


Fujifilm's Grangemouth chemical  facility in Scotland

Businesses, economic development organizations, educational institutions, research organizations, as well as federal, state, and local governments all have important roles to play to ensure that U.S. manufacturing strengthens its capacity for innovation.  The committee made several recommendations as a blueprint for these actions, including:

  • Businesses should establish training programs to prepare workers for modernized operations and invest in advancing the education of their low- and middle-skilled workforce.
  • Businesses, local school districts, workforce organizations, community colleges, and universities should form partnerships to help students graduate from high school, earn an associate’s or bachelor’s degree, and take part in continuing education and training programs in the workplace.
  • Congress and state legislatures should create tax credits or other incentives for businesses to invest and be involved in education programs that provide students and displaced workers with the knowledge and skills needed for higher-paying careers.
  • Metro area and state governments, industry, higher education, investors, and economic development organizations should partner to create local innovation networks to foster the creation of new businesses and to connect entrepreneurs and new businesses to the individuals, investors, tools, and institutions in their region and around the world that they need to grow.
  • Federal agencies should facilitate industry and government cooperation to identify shared opportunities to invest in pre-competitive research in forward-thinking and costly fields such as next-generation batteries and biotechnologies, for which capital is scarce.
  • Businesses should implement programs to attract and retain diverse workers with respect to gender, race, and socio-economic background.


“We hope that this report will serve to inspire an understanding of the making value problem the nation faces and consequently stimulate action by government, industry, and education to deal with its consequences,” said NAE President C.D. (Dan) Mote Jr.  “By doing so, our economy will create high-quality, high-paying jobs for a prepared workforce and opportunities for the U.S. to prosper in the 21st century.”


NAE was joined in sponsorship of this study by Gordon E. Moore, Robert A. Pritzker and the Robert Pritzker Family Foundation, Jonathan J. Rubinstein, Edward Horton, and by a number of U.S. companies — Boeing, Cummins, IBM, Qualcomm, Rockwell Collins, and Xerox.  The mission of the National Academy of Engineering is to advance the well-being of the nation by promoting a vibrant engineering profession and by marshalling the expertise and insights of eminent engineers to provide independent advice to the federal government on matters involving engineering and technology.  The NAE, along with the National Academy of Sciences, Institute of Medicine, and National Research Council make up the National Academies.  They are private, independent nonprofit institutions established under a congressional charter granted to NAS in 1863.  For more information, visit  


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