Building the Next Generation Manufacturers

A few weeks ago, the Catalyst Connection, a Manufacturing Extension Partnership (MEP) Center in Pittsburgh, Pennsylvania

Ask any construction business professional or an architect if they suffer from tantrums when penning their contract drawings, and you are more than likely to hear an enthusiastically frustrated, “YES!”

Oh yes, the old 2D contract drawings, also called “plans” or “blueprints” or just “drawings”… They were bulky, hard to read, and difficult to be read through in between the construction site and the office. But even with all of this newfangled 3D modeling and the virtual or augmented reality devices, these blueprints continue to bring the construction industry down!

But actually, there’s one quite valid reason that they won’t go away anytime soon. It’s because they are a part of the contract for every entity involved with the project.

As construction professionals, we simply require at least one static version of a document, which clearly outlines our respective scopes of work. Subsequently, newer versions of these contract drawings emerge, as it happens for a majority of projects.

Unsurprisingly, we struggle to keep up with all those full-sized and half-sized sets of paper plans and in keeping them updated accordingly…

Although considerable focus has been devoted to America’s manufacturing skills gap, the United States is second only to Germany in terms of manufacturing-grade professionals talent today.

Cost competitiveness and workforce productivity are inferior factors, compared to manufacturing talent, but these two drivers of manufacturing competitiveness are especially critical. “In an era of slow economic growth,” the 2016 GMCI explains, “containing costs and increasing productivity to increase profits remains critical for manufacturers.” China trumps all of its major manufacturing rivals in terms of cost competitiveness, but the study warns readers against emphasizing one factor alone. Rather, a “mosaic” of factors or drivers is what determines a nation’s overall GMCI rank.

Executives ranked “supplier network” as the fourth most important driver of manufacturing competitiveness. Globalization has increased supply chain lengths, but top-ranked nations have their own strong and diverse supplier base. Importantly, these networks include “industrial clusters focused on R&D”. The 2016 GMCI doesn’t reference a 2015 Brookings Institution report about declining R&D as share of U.S. GDP, but perhaps it should. In that study, Brookings authors Mark Muro and Scott Andes described U.S. R&D as a troubled enterprise.

Past, Present, and Future

If the projections of Deloitte and the Council on Competitiveness are true, the United States will take the top spot in the Global Manufacturing Competitive Index (GMCI) in 2020. China, the manufacturing competitiveness leader in 2010, 2013, and 2016, will fall to second place as it transitions towards higher-value manufacturing and adjusts to rising material and labor costs. Germany and Japan are expected to keep their third and fourth spots, respectively, in 2020.

For the United States, reaching the top of the GMCI represents the logical next step in a steady progression from fourth place in 2010, third place in 2013, and second in 2016. Longer-term, however, issues such as the manufacturing skills gap and declining R&D spending (at least as a share of GDP) could affect U.S. manufacturing competitiveness.

For now, however, the four drivers of manufacturing competitiveness are propelling America towards GMCI primacy. In New York State, funding opportunities such as Global NY and START-UP NY are helping, too. It’s a great time for U.S. manufacturing – and the best is yet to come.