The Ghost of Manufacturing Past

By Evan Robertson, Senior Project Associate

I have fond memories of the excitement building up to the holiday season. As a child, it was as if the entire world was building up to a particular day or set of days where humanity slowed down, however briefly, for a moment. As an adult, you discover that there are a lot of people responsible for creating this air of mysticism around the holiday season. Retail employees and, increasingly, delivery drivers are the front face of the entire operation. 

What we typically don’t think about however is the cadre of individuals who were directly involved in the production of what we give or receive. Whether it is a new smartwatch or new gadget, there were a lot of hands that went in to making it. That may not be the case for much longer, especially if the product is stamped with the words “Made in the USA”. Increasingly manufacturers are turning towards automation to solve production issues and lower labor costs. We as economic development professionals have long talked about the new, automated face of manufacturing. But, you never really grasp the concept without experiencing it or seeing it first had. 

By happenstance I recently came across a video that perfectly exhibits the new face of American manufacturing. The video was release by Valve, a video game developer and digital distribution company. Valve hosts a popular video game marketplace called Steam® and recently decided to dip its toe into computer hardware with a video game controller aptly named “Steam® Controller.” A video game company entering the hardware market isn’t a huge story I’ll admit. But what struck me is that the company chose to produce their controller right here in the United States. What also struck me is how few people are actually involved in making the controller. From packaging to quality control, there is little human intervention in the production process. 

This only reinforces my experience at a KIA plant in West Point, Georgia a few years ago as well as numerous other manufacturing facilities I’ve had the opportunity to tour. Machines are everywhere, humans only dot the production line. As we debate and devise new approaches to revive manufacturing in the United States and attempt to bring back jobs lost during globalization, it is important to realize that cost above all else will determine the extent of the manufacturing sector’s capability to create jobs here in the United States. This is to say that reshoring manufacturing jobs here in America from China will not be a one for one trade. A U.S.-located Foxconn factory will not in any way resemble a China based Foxconn facility. If we are successful in bringing back manufacturing to the United States, who knows, the next iPhone you give or receive as a gift may not have ever touched a human hand.

Infrastructure Watch: It Begins

By Evan D. Robertson

Ah, post-election America: news breaks by the second, television is rapidly approaching peak pundit, and prognosticators are well, prognosticating. The central question on everyone’s mind is this: “what exactly does an America with Donald J. Trump at the helm look like?” It is anyone’s guess. Minus a few campaign positions declared during the election it is tough to know for certain where the executive branch will stand on any given issue. Take economic development for example: Trump recently reached a $7 million deal with Carrier to keep jobs in Indianapolis in which Carrier promises to keep approximately 800 jobs in Indiana. Next time you settle down to strike a deal with a prospect, you just might find the President, the Vice President, or a federal representative at the table alongside you. Like I said, no one can say for certain what America will look like over the coming years. One thing I am certain about, however, is that this nation will be talking about, and hopefully building, infrastructure. 

During the Thanksgiving Day holiday, I had the opportunity to read a recently published book by Rosabeth Moss Kanter entitled Move: How to Rebuild and Reinvent America’s Infrastructure. In the book the Harvard Business School professor, whom Mac quotes with regularity, painstakingly details the issues and opportunities embedded in America’s current infrastructure landscape. As I made my way through the book, I began to wonder whether America is going to get its future infrastructure investment right. What types of infrastructure are we going to invest in? Will it be intelligent infrastructure or more of the same concrete and steel roads, bridges, and pipes of yesteryear? Is America about to make a $1 trillion blunder? 

Take roads for instance. American cities have a deep and tenuous relationship with large federal infrastructure projects. The need for a federal highway system was often used as a guise for “urban renewal” which in most cases describe the process by which whole neighborhoods (usually poor) were destroyed in order to make way for new highways. It is no coincidence that many city centers throughout the nation have a highway either running directly through their downtown areas or somewhere nearby. It is interesting too to see numerous cities now trying to heal the old wounds wrought by the federal highway system. The most famous example is Boston’s Big Dig, a $15 billion project that relocated Interstate 93, which once ran through the heart of Boston’s downtown area, underground. Atlanta too has proposed its own solution called “The Stitch” aimed at building over the central highway artery that currently divides numerous communities throughout Atlanta’s Midtown and Downtown areas. Cities are just now mending the wounds of infrastructure built decades upon decades ago.

At the same time, entrepreneurs are rapidly developing new service delivery models and automating cars. Innovations which may obviate the need for significant road investment or, at the very least, alter the type of transportation investment required to secure America’s future competitiveness. As a regular patron of Uber, the company is making a strong case for ditching the car and exclusively using public transit and ridesharing services to get around. In the next 5 to 10 years, folks may begin to drive less and utilize ridesharing services more. In the next 15 to 25 years, car ownership might be viewed as unessential to American life, once again relegated to those privileged few who enjoy driving for recreation. Given the amount of money car companies are investing in autonomous technologies and artificial intelligence, we may not be driving at all. 

In an increasingly interconnected world, if America spends $1 trillion dollars on concrete and steel to build its infrastructure then America has wasted $1 trillion dollars. If a road doesn’t provide real time analytics on usage, self-identify potholes, respond appropriately to an accident (such guiding traffic around the accident by automatically closing lanes), or provide the baseline connectivity required for cars to operate autonomously, then our infrastructure dollars were poorly spent. If our drinking water infrastructure is unable to detect a water main break or leaks in the system, then we will have misappropriated $1 trillion dollars. If our transportation network does not provide seamless interaction between all modes of transportation (road, rail, public transit, and in some cases sea), then forgoing the investment may have proven a more effective use of our tax dollars. Tomorrow’s infrastructure should look markedly different than it does now, it should incorporate all the innovations that have been developed and are still developing in our technology-driven era. If we get this wrong, our future competitiveness on the global stage will assuredly suffer.

Election Raises Stakes for Native-Born Workforce

By Alex Pearlstein, Vice President

Regardless of your politics, it can be assumed that the results of last week’s election will likely not lead to an increase in foreign immigration to the U.S., and might have the opposite effect. For regions like Dayton, Detroit, St. Louis, and other places with little to no domestic inmigration that have launched talent initiatives targeting immigrants and refugees, this is going to make implementing these programs more difficult, or at least less viable for labor force replenishment.

Many American cities have already come out and pledged to remain sanctuaries for immigrants http://remezcla.com/lists/culture/sanctuary-cities-time-of-trump/, but this would largely serve those already in the country. Regions that currently count on influxes of foreign migrants to satisfy employer demands in one or more industries – or those aspiring to better tap this source of labor – will have to identify alternative means to provide a competitive complement of available workers.

An unanticipated impact of the election could therefore be a new primacy on domestic talent attraction and tapping into local workforce development pipelines. Regions like Atlanta, which imports the vast majority of its workers from foreign and domestic markets, will have to replace its complement of international talent with native-born and local labor pools. This will make the competition for footloose talent even more intense and create pressure to invest greater and greater amounts in talent marketing and prospecting.

Decreases in availability of foreign-born labor will also raise the stakes for pre-K to 20 training systems and institutions. This will be due to declining international student populations and applicant pools and also a pure numbers game that is already being seen in cities across the country: more jobs are available than there is talent to fill them. An alphabet soup of programs and “cradle-to-career” coalitions is already in place to ensure students are being trained for college and careers in local demand. Complementing these are initiatives to make regions more competitive for talent by enhancing quality of place amenities. Companies will need to redouble efforts to develop relationships and connections to training providers to expose students to career opportunities and hire them for available positions.

All this is to say that current talent strategies will need to be reassessed and potentially adjusted based on new migration realities. Communities would be wise to devise proactive solutions to labor force capacity issues and reach out to partners across the full education and workforce continuum to design and implement effective programs and processes.

How much does who you know depend on what they do?

By Matt DeVeau, Project Manager

In the course of facilitating community and economic development planning work around the country, one notices certain themes that are remarkably consistent from place to place. For instance, we commonly hear from executives and human resources professionals that it is difficult to get school-aged children in their community interested in a career in manufacturing. The story tends to the same in places large and small, in communities with a strong “blue collar” history and in service-based economies where manufacturing makes up a relatively small slice of employment.

I was thinking about this topic the other day in the process of developing a strategy and decided I would ask someone who works in manufacturing about how they got their start in the business. Then it hit me…

Wait, do I actually know anyone who works in manufacturing?!?

I thought for a moment and realized that, yes, I do but they are all professional contacts whom I have met through my work in community and economic development. Among my personal contacts, I couldn’t think of a single friend or family member who works in the sector. So next I did a nerdy thing that probably explains why my pool of friends isn’t bigger: I made a spreadsheet for fun.

I pulled up a list of every four-digit NAICS business sector and started placing tick marks next the sectors in which someone in my social circle works. To keep things manageable, I came up with a few conditions:

• I had to be close to 100 percent sure about where someone worked in order to classify them.
• I looked only at the roughly 160 personal contacts stored in my phone. Going through social media profiles of friends may have yielded better results but would have been too cumbersome through user interfaces.
• I assumed that everyone worked in their parent company’s main line of business (not a narrowly focused business unit that might be classified in a different subsector) and I only classified people into “Management of Companies and Enterprises” if I knew their job was in a corporate headquarters operation for a large firm with many locations.

I ended up sorting 85 friends and family members into 32 business sectors. I’ve shown the top 10 sectors in the following table. 

Looking at the table, I can clearly see the impact of the social networks I formed through my education. From my time in Western Washington University’s journalism program, I have multiple friends in public relations (5418). From Georgia Tech, I know landscape architects and civil engineers (5413) and people who work for community development nonprofits (8133). (I also know a lot of public school teachers for some reason.)

But, there are no manufacturing sectors represented in that top 10 – or anywhere on my list for that matter. Maybe that shouldn’t come as a surprise. My friends are mostly: 1) people who attended college with me, 2) people who attended college with my wife, or 3) people who are in a relationship with someone from those categories. Most are doing something related to our areas of study, none of which line up well with a career in manufacturing.

This is The Big Sort phenomenon to a certain degree – the idea popularized by Bill Bishop and Robert Cushing in their 2008 book. The idea is that Americans have “sorted themselves geographically, economically, and politically into like-minded communities over the last three decades,” and it now comes up around every big general election.

Beyond electoral politics, I think the “sorting” concept has interesting implications for community and economic development – too many to list here in fact. But, I wonder what would happen if we developed a social network visualization that somehow incorporated data covering the business sector in which each individual worked. I would assume that we would see a correlation between clusters of social connections and business sectors – most people probably have friends from work, at a minimum. But, might we see that certain sectors of the economy are fairly “isolated” from one another in terms of how connected their workers are to one another? Put another way, might data suggest that one of the reasons students are reluctant to consider careers in manufacturing is because their parents don’t know anyone in that field? I don’t know the answer, but it’s the type of thing I hope we can find out as new data analysis tools and techniques are applied to community and economic development.

K-12 Innovation

By Ranada Robinson, Research Manager

In December 2015, President Obama signed the Every Student Succeeds Act (ESSA), which replaces the No Child Left Behind Act (NCLB). Recently, Market Street staff participated in a webinar hosted by Association of Chamber of Commerce Executives entitled “K-12 Innovation and Accountability,” which featured three panelists who discussed their professional experiences in transitioning to the new ESSA standards. According to Alliance for Excellent Education, the following features set ESSA apart from NCLB:

• All students must be on a path to postsecondary education, and states have flexibility to design an accountability system that supports this
• States set their own ambitious goals and short-term measures of progress
• The Accountability System includes an indicator of “school quality or student success”
• Interventions for low-performing schools are locally-tailored in consultation with teachers, stakeholders, etc., rather than federally prescribed

The focus of the webinar was on what chambers can do to help states improve education policy and outcomes. In our work, we’ve seen (and encouraged) more and more chambers and EDOs doing more in the workforce development space and helping to create and make stronger the link between what schools are including in academic curriculum and special programs and what businesses need. Christopher Shearer, the Education Program Officer at the Hewlett Foundation encourages chambers to do the following to help states:

• Use their convening power to host stakeholder meetings for local education agency leadership and regional business leaders
• Ask state leaders if the state plan includes a career readiness indicator
• Discuss potential collaboration opportunities for work-based learning, internships for students, externships for teachers, guest speaking, mentorship, and job shadowing
• Be open to other ways state officials might be able to include the business community in implementation

A few of the notable programs that were mentioned during the webinar were the Louisiana Jump Start initiative, described by Liz Smith, the Director of Policy and Research at the Baton Rouge Area Chamber, and the L.A. Compact, described by David Rattray, Executive Vice President of Education and Workforce Development at the Los Angeles Area Chamber of Commerce. 

Jump Start – Jump Start Louisiana was rolled out in 2014 by state superintendent John White as a way to “restore the dignity” of career and technical education and to recognize that earning an undergraduate degree is not the only path to the middle class. Starting with the Class of 2018, there are two high school diploma pathways: (1) TOPS University, for students who want to attend college after graduation, prepares students to qualify for a TOPS scholarship, and (2) Jump Start Pathway, for students interested in college and/or career, which allows students to earn industry credentials that will help them attain entry-level employment after graduation and continue their education at a community or technical college. There are also opportunities for teachers, including externships, training for industry credentials, access to industry experts in any business sector in which they are interested anywhere in the United States, and stipends from the Louisiana Department of Education to develop course materials.

L.A. Compact – The L.A. Compact was first introduced in 2010 as a commitment by a broad range of community partners to focus on increasing graduation rates, ensuring that students are prepared for college, and providing more meaningful career opportunities to students. The partners included City officials, the Los Angeles Unified School District, the Los Angeles Area Chamber of Commerce, United Way of Greater Los Angeles, the Associated Administrators of Los Angeles, the Los Angeles County Federation of Labor, and 11 colleges and universities in the Los Angeles area. The Compact later won an Investing in Innovation Fund grant from the U.S. Department of Education for its proposal entitled “L.A.’s Bold Competition – Turning Around and Operating Its Low-Performing Schools.” Since then, the initiative has developed into a collective impact initiative with goals, workgroups focused on major components of those goals, and measurement tracking. 

As the nation moves into transitioning to implementation of ESSA, this is an opportune time for the business community to become more engaged in the workforce pipeline—understanding that starting early by making sure Pre-K – 12 programs are strong and will prepare students for their eventual careers or for continued higher education only helps to support businesses in the long-term. Talent has become and will remain the #1 issue for economic development, and teamwork across community partners will be vital to the betterment of our children and future working adults.

Who’s Voting?

By Katie Thomas, Project Associate

The 2016 election has certainly been one for the books. This week marked the last presidential debate in what has been considered one of the most divisive elections thus far. Given some of the topics and polarized views, and being the data nerd that I am, I thought it would be interesting to take a quick look at who will likely be voting in this year’s election and ultimately deciding who our next president will be. 

Turns out, this year’s electorate will be the most diverse one yet in terms of age, race, and ethnicity. According to the Pew Research Center, roughly one-third of eligible voters this year will be Hispanic, African American, Asian, or another racial or ethnic minority. Additionally, as of April of this year, the number of millennials that are of voting age is nearly equal to that of the Baby Boomer generation (69.2 million compared to 69.7 million).

Yet, despite population dynamics and the electorate becoming more diverse, the percentage of eligible voters that are actually voting is another story, and parties on both side of the aisle are concerned about voter turnout. The following headlines from various news sources reflect the uncertainty surrounding this year’s election.

• “The Lid: Both Sides Need to Turn Up Voter Turnout,” NBC, October 13, 2016
• “¡A votar! Latino Voters Can Make a Difference,” The New York Times, October 1, 2016
• “Will Millennials Decide Utah's Electoral Votes?” Utah Public Radio, October 13, 2016
• “As Voters Tune Out, Worries Grow About Turnout,” The Wall Street Journal, October 17, 2016
• “The Brief: Will a higher voter turnout spell trouble for the GOP?,” The Texas Tribune, October 17, 2016
• “A sharpened debate: Is it ethical to not vote this year for president?” USA Today, October 3, 2016
• “Voter turnout expected to rival 2008 election,” The Daily News, October 12, 2016

Historically, voter turnout has varied significantly among the different age groups, races, and ethnicities. Although millennials will soon account for the largest share of the eligible voters, they trail every other generation when it comes to voter turnout rates. Less than half of millennials eligible to vote in 2012 reported voting, while nearly 70 percent of Boomers voters turned up. Likewise, according to U.S. Census Bureau, 66.2 percent of black eligible voters and 64.1 percent of white, non-Hispanic eligible voters cast voters. However, voter turnout rates were lower among Asians and Hispanics; only 48 percent of Hispanics and 47.3 percent of Asian eligible voters reported voting in 2012. 

Across the U.S., the District of Columbia, Mississippi, Wisconsin, Minnesota, and Massachusetts had the highest turnout rates in 2012 according to the Census Bureau. Voter turnout among the five ranged from 75.9 percent to 70.8 percent. Meanwhile, West Virginia, Hawaii, Oklahoma, Arkansas, and Texas had the lowest, with roughly half of the total voting-age population having reported voting in 2012 in each state. Such a wide range of turnout rates among the states raises even more uncertainly about the electoral votes, certain battleground states, and what to expect November 8th. 

Beyond differences in opinions on topics and stances on issues, the ultimate outcome of the election will come down to who shows up at the polls to cast their vote. Obviously, the goal is for all voters to cast their vote in every election, but historically, this has yet to happen. Hopefully, turnout rates continue on their upward trend for this year’s election. Either way, for better or worse, this election will be over in a few weeks and we can hopefully all more forward as one.

Living at Work

By Stephanie Allen, Project Assistant

By now, we’re all more than familiar with the “live, work, play” refrain. But, a new trend on corporate campuses gives this idea a 21st century twist—or maybe it’s more accurate to call it a 19th century twist. 

As housing becomes more and more of an obstacle to attracting the best talent in some of the nation’s major markets, corporate employers have begun to add housing to their amenity-rich campuses. Facebook’s Menlo Park campus recently added almost 400 units of housing. Presumably, many of these employees already eat at one of the campus’s eleven establishments, relax in the plaza with free beer, work out at the on-campus gym or exercise on the climbing wall. So, they already work there and play there. Why not live there?

It’s an interesting move, but it’s not a new one—not exactly. In the 19th century, the US saw a number of “company towns” pop up surrounding large, industrial operations. Think Pullman, Illinois; Hershey, Pennsylvania; Oneida, New York; Kohler, Wisconsin. Company towns provided jobs, healthcare, schools, housing, markets, libraries, and even churches. They were designed to meet practically all of the needs of their employees.

Corporate campuses already chockfull of amenities that are now adding housing seek to do much of the same. It’s another perk like ping-pong tables, onsite haircuts, and doggie daycare. As recruitment for top talent gets more and more competitive, this is just one more perk to up the ante.

It’s not just corporate campuses that are investing in this living at work concept.

There are a few private developers who are adding residential units to their office parks too. The Davis Companies will add 271 residences along with high-end food service, indoor/outdoor collaboration areas, and a fitness center to a traditional Class A master-planned office park in Burlington, MA. The nearly 60 year-old Research Triangle Park in North Carolina, which is home to more than 200 companies, is planning a new 100-acre mixed-use development in the heart of the Park with restaurants, apartments, and shopping. Bike and walking paths will connect the new development with the existing office buildings and labs. 

And, WeWork, the recognized leader in the co-working space movement, is also getting in the game. Known for their artsy, glassed-in, community-encouraging co-working spaces with month-to-month leases and as much coffee, tea, and beer as you can drink, WeWork launched a new live-work concept last year, WeLive. The first location, in New York City, has 200 residential units above seven floors of co-working space. They call it a “community-driven living concept.” You can rent co-working space downstairs and community-driven living space upstairs.

Personally, I’m not sure I’d want to live at work. But, I work from home so perhaps that’s really not so different.