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Archived: Study Says Manufacturing has Healthy Future in Massachusetts

Posted on September 14, 2012

“Manufacturing is alive and well in Massachusetts, and has a healthy future,” Professor Barry Bluestone of Northeastern University told some 200 industry and policy leaders as he unveiled a new report, Staying Power II:  A Report Card on Manufacturing in Massachusetts, at AccuRounds in Avon yesterday.  Bluestone heads Northeastern’s Dukakis Center for Urban and Regional Policy, which produced the report.

ManufacturingThe study is based on a survey of 700 companies across the state. AIM urged its members to participate, and a number did so. It updates an earlier version that used data gathered before the economy fell into recession. Massachusetts manufacturing, Bluestone noted, “��f anything, appears to be in a better position today than in 2007 to prosper in the future.”

Some key findings about Massachusetts manufacturing:

  • Manufacturing employment has stabilized after a sharp decline in the recession;
  • Manufacturing is the state’s six-largest employment sector ” and the second-largest (after health care) in terms of payroll;
  • Manufacturing’s share of gross state product has risen for the past two years, to 12.2 percent;
  • The number of manufacturing firms actually increased in 2011, for the first time in decades;
  • Manufacturing is more technologically intense than ever; in 1970 employment in low-tech sectors was twice that in high-tech, in 2006 they were equal, and by 2010 high-tech was 27 percent larger
  • Most Massachusetts manufacturing companies are small (72 percent have fewer than 20 employees), and most (again, 72 percent) are family-owned
  • Although most jobs in manufacturing are now “white collar,” only about one position in five requires a college degree

Although manufacturers may consider leaving Massachusetts because of cost issues, the survey found, the skills and work ethic of the state’s workforce are powerful reasons to stay.  Employers are already experiencing difficulty in hiring skilled workers, and an upcoming wave of retirements will create up to 100,000 job vacancies over the next 10 years.

This “recruitment challenge” is a serious concern, Bluestone said, noting that while manufacturers rely on the vocational-technical high schools to prepare workers, they make relatively little use of community colleges and workforce investment boards. Another challenge for the future is a low level of innovation among many smaller firms.

Looking ahead, Bluestone reported, 65 percent of manufacturing firms expect to see higher production levels in Massachusetts in five years, and 70 percent forsee expansion of employment in the state. These extraordinarily encouraging results can be realized, he said, only by facing up to the recruitment challenge by working proactively with educational institutions and training organizations, and promoting manufacturing careers.

This, he suggested, falls within the purview of the new Massachusetts Advanced Manufacturing Collaborative, an industry-lead group bringing together leaders from manufacturing, academia and government. AIM, an active member, believes that the survey results will greatly assist the Collaborative in carrying out its mission of addressing promotion of manufacturing, workforce training and education, technical assistance and innovation, controlling costs of doing business, and access to capital.

Governor Deval Patrick agreed, saying, “Professor Bluestone has given us a great story to tell, and we have to tell it ” together.”