Talent is the Key to Success

By Randall T. Kempner

Manufacturers face a growing challenge.  Even though the old adage of the factory floor as dark, dirty, and dumb has given way to the new reality of safe, sanitary, and smart facilities, many manufacturing intensive regions now face a labor shortage.  Most manufacturing firms that survive have invested in productivity-enhancing technology instead of more labor.  Jobs in manufacturing now pay more and are less physically demanding.  But while there is less need for manual labor, the increased need for technology-savvy laborers is increasingly hard to meet.  

Over the past few years, the Council on Competitiveness has conducted interviews with hundreds of employers across the country as part of projects designed to support regional competitiveness.   In regions from Spokane, Washington to Rochester, New York, employers offered a common refrain when asked about challenges to their future success: “We have the skilled employees we need today, but are not sure about the ones we need tomorrow.”

There is little reason to doubt that talent will continue to drive both individual and regional economic prosperity.  According to the U.S. Employment and Training Administration, 26 of the 30 fastest growing jobs over the next ten years in the United States will require at least some post-secondary training.  Between 2004 and 2014, approximately 46 percent of all job growth is expected to be generated in professions (management, technical, high level sales) that require a college degree.  For the highest-paying jobs, an even greater percent will require college training. 

With no end in sight to the technological advances that enable the growth of knowledge based industries, the need for skilled workers in unlikely to abate.  Even entry level jobs will require basic knowledge of computer skills.  Higher level jobs throughout the economy will require significantly more capabilities, from technology comprehension to advanced management techniques to manage globally dispersed workers.   

As the U.S. baby-boomer generation retires and more global regions upgrade their ability to support high-value added industry, U.S. metro areas will find the competition to retain highly skilled workers intensifying.   As we look to the future, it seems increasingly clear that the level of education in the workforce will be the difference between regions that succeed and those that stagnate.

Excerpt from “The Talent Imperative for Older Industrial Areas“

Open Letter to Presidential Candidates

Dear Presidential Candidates:

Energy is the defining challenge and economic opportunity of our time.

The competitiveness and economic growth of the United States hinge on our ability to craft and implement a comprehensive strategy for increasing energy security and sustainability. In an age of competing global demands for energy and unstable sources of supply, our prosperity is linked to the kinds of energy we use and how efficiently we use it.

The economic toll of the exponential increase in global demand for energy has rippled across our economy, adding to the cost of doing business and squeezing the pocketbooks of ordinary Americans. Securing access to energy supply, increasing the nation’s energy productivity, maximizing the economic value of each unit of energy consumed and minimizing environmental impact – each of these issues must be addressed if the U.S. is to remain competitive.

To ensure our leadership in the global economy, we must act now. Energy security cannot be achieved without a comprehensive national strategy. This certainly includes reducing U.S. dependence on foreign oil, but an energy strategy must encompass more. Redundancy of supply and diversity of source are essential if the U.S. is not to be overly dependent on any one energy source or supplier in the marketplace.

The match-up of appropriate energy source to sector of use must be optimized – whether supplying energy to heat homes, to transport goods, to light cities or to power enterprises. Each of these elements must be supported by innovation: technological innovation, policy innovation and innovative global collaboration.

To date, key energy issues have been almost entirely absent from the presidential debates, even though energy is a driver of U.S. competitiveness in the global marketplace and is a key focus of business enterprise worldwide. There has been little discussion about the role of government in creating the environment for progress in energy security. There has also been limited debate about how to create the conditions necessary to stimulate innovation in the energy arena, or about the steps necessary to ensure an adequate energy workforce to meet the needs of the 21st century.

We represent a cross-section of private sector leaders – from business, labor and academe – who see the tremendous potential for the creation of new energy markets, technologies, industries and good jobs ahead if we properly harness our resources. The economic boom that would accompany these energy advances would drive our economy for a generation. Our institutions and companies are already acting to capitalize on and shape these opportunities.

The Council on Competitiveness Energy Security, Innovation & Sustainability (ESIS) Initiative Steering Committee – comprised of more than 40 corporate CEOs, labor leaders and university presidents – is developing recommendations for both public and private sector action to improve

U.S. competitiveness by addressing these energy challenges. By way of this letter, we share with you proceedings from our initial dialogue in Define. The Energy-Competitiveness Relationship.

But we cannot do it alone. We urge you to use the power of your candidacy and your office to communicate and act upon the tremendous urgency, economic opportunity and national importance of transforming the U.S. energy system. We ask that you assign the highest priority to creating the enabling conditions that will stimulate the investment and innovation required for a sustainable and secure energy future.

Meeting our global energy security needs will only be possible with strong national leadership and a solid base of public understanding and support. Toward that end, we invite you to join with us in working to elevate the national discussion on these critical energy issues. We have outlined three key questions which we welcome your comment on in the remainder of the primary and general election cycles.

We are committed to guiding our nation on a path toward a more secure, sustainable and competitive energy future. By harnessing our national innovation capabilities, we can continue to drive our economic growth and enhance the standard of living for this and future generations.

We welcome you to consider us as a resource in this undertaking.

Human Capital is a Competitive Differentiator

By Debbie Van Opstal

For advanced economies, the competition is heating up at both ends of the skills spectrum: low-wage, low-skill as well as higher-skilled scientists and engineers. But there are no predetermined victors—or losers—in the global skills race.

In its recent report, Thrive, the Council on Competitiveness identified four key areas of opportunity to create skills to enable American workers to compete against anyone, anywhere in the world.

Middle skills: One of the biggest untapped opportunities for the future will be for technology workers in jobs that require less qualification than a BA degree, pay relatively well and do not offshore easily. The importance of these workers to the economy is growing in lock-step with the sophistication and fragility of the technology infrastructure.

In manufacturing, for example, the loss of production jobs, often due to technology substitution, is offset by an increase in maintenance jobs that are increasingly high-tech enterprises themselves. And that may be one reason why the Dutch are launching a Maintenance Valley, in anticipation that world-class maintenance capabilities will be a magnet for investment.

Service skills: Many people think of service jobs as low-wage, dead-end jobs. But it is time for a reality check. The service economy is the engine of wealth creation and now accounts for the majority of jobs in most economies.

The high-value competition in the future will be for high-end (and tradable) services in which creativity, problem-solving, communications, computing and teamwork will become must-have skills. Yet there has been little attention or investment in service science—how to accelerate rates of innovation and productivity in the service sector—as well as a lack of interdisciplinary curriculum to create the skill sets workers need to succeed in the service economy.

Scientists and engineers: With the growth in science and engineering degrees worldwide, simply graduating more scientists and engineers cannot be the answer for advanced economies. What they will need are scientists and engineers who bring a higher value skill set to the table.

More than having simply a narrow knowledge of the discipline, this new class of Renaissance scientists and engineers will understand business value and will be as comfortable with an Excel spreadsheet as they are with a pocket protector.

Green skills: Sustainability promises to be the game changer in the decade ahead. Carbon considerations are already beginning to alter corporate investment decisions. Consider that Procter & Gamble is putting its first domestic greenfield manufacturing plant in the United States in more than three decades proximate to consumers.

Ironically, most of the attention has been on “green collar” jobs which are usually relabeled middle skills jobs. But, getting ahead of the curve on sustainability will demand even more profound changes in professional education – embedding principles of resource productivity and low-or-no carbon footprint into core curriculum. While some institutions are experimenting with new programs, these have yet to become widely available or common practice for MBA’s, architects, engineers, chemists, and other key professional groups.

The bottom line for advanced economies is this: When everyone is successfully copying the old model, it is time to invent a new one.

Featured in The Economist online debate series, Workforce Talent 2020.