Allentown Economic Development Corporation

Monthly Archives: September 2017

Technology, artificial intelligence, and automation have collective impact on modern manufacturing and careers

As the famous song lyrics go “The times they are a changing,” and nowhere is that more evident than in modern manufacturing. Routine, repetitive tasks formerly done by humans have largely been taken over by machines thanks to technology, artificial intelligence, and robots.

But automation isn’t having as detrimental an impact on the U.S. workforce as many experts expected it might. If anything, there’s proof that automation is actually making better products at a more efficient rate, and leading to better jobs and quality of life for employees with advanced skill sets acquired through additional education and training. It’s a paradigm shift happening across the country and the world.

Technological advancements create fears

Over the past two-to-three decades as automation really came into its own, fears that manufacturing jobs held by humans would eventually be completely replaced by robots ran rampant. And while some low-skilled, low-wage jobs have been eliminated due in part to automation, new opportunities for those workers to be retrained in more advanced roles have emerged.

“Automation anxieties are hardly new, but each time those fears arose in the past, in the long run, technology innovations ended up creating more jobs than they destroyed,” according to a January 16, 2017 article for the MIT Initiative on the Digital Economy entitled “AI, Automation, and the U.S. Economy.”

According to a Forbes Community Voice blog post for the Forbes Human Resources Council by Gene Zaino, “While automation has transformed and will continue to transform many industries, it largely redefines rather than eliminates jobs… In the independent workforce, automation may actually increase demand for flexible workers who have skills and agility that machines are unable to provide.”

A June 25, 2016 article in The Economist entitled “Automation and anxiety” appears to agree. “… in the past, technology has always ended up creating more jobs than it destroys. That is because of the way automation works in practice… automating a particular task, so that it can be done more quickly or cheaply, increases the demand for human workers to do the other tasks around it that have not been automated.”

Instead of hiring workers to assemble widgets which can now be done efficiently by machines, manufacturers are hiring mechanical engineers, software developers, technicians, mechatronics technicians, which combines electrical and mechanical engineering along with computer skills, in addition to managers and salespeople. These skilled professionals build, program and maintain the machines, while other skilled employees operate and repair them.

In an Associated Press article from August 30, 2017 entitled “Future of Work – Running the Robots,” writers Dan Sewell and Christopher S. Rugaber stated, “… American manufacturers have actually added nearly a million jobs in the past seven years, and federal statistics show nearly 390,000 jobs open… More and more factory jobs now demand education, technical know-how or specialized skills.”

Training tomorrow’s technicians

The national shortage of skilled technicians is being seen in manufacturing the past decade since not enough young people are choosing trades as a career path compared to going the four-year college degree route.

An August 29, 2017 PBS Newshour program on the subject stated “… the decades-long national push for high school graduates to get bachelor’s degrees left vocation programs with an image problem and the nation’s factories with far fewer skilled workers than needed…. This had the unintended consequence of helping flatten out or steadily erode the share of students taking vocational courses.”

It didn’t help that misperceptions of manufacturing jobs in America as being dirty, loud, and even dangerous has kept parents, teachers, and guidance counselors from recommending careers in the industry.

According to the PBS Newshour article a survey by the State of California of its community college system “showed that families and employers alike didn’t know the existence or value of vocational programs and the certifications they confer, many of which can add tens of thousands of dollars per year to a graduate’s income.”

The AP article from August also stated, “…factory automation has changed what companies need from their employees. Assembly-line workers now need to run, operate and troubleshoot computer-direct machinery… Advance manufacturing – employing hand-held computers, scanners, using Google Glass – is a trend that will accelerate with growing use of robotics.”

“People with career and technical educations are actually slightly more likely to be employed than their counterparts with academic credentials, the U.S. Department of Education reports, and significantly more likely to be working in their fields of study,” per the PBS Newshour report.

“U.S. manufacturing workers, excluding managers, make an average of $44,000 a year, according to government data… a typical mechatronics engineer with a four-year degree can earn $97,000 a year; a typical software developer makes just over $100,000,” as reported in the AP article.

Retraining today’s manufacturing employees

With the retirement of many Baby Boomers looming, the employee shortage will only get worse with time. A push to retrain existing workers has become the focus of manufactures and community colleges and vocational schools across the U.S. Some have begun partnering to bring weekly classes to a company’s campus, while others schools have started tailoring their programming based on what skills local manufacturers tell them their staff members most need. Some companies offer partial or full tuition reimbursement for employees that undertake advanced training.

The lack of skilled technicians for automation-oriented jobs has even gotten the attention of politicians. According to the AP article, “…there are efforts underway to bridge the skills gap… Many political leaders and CEOs are promoting apprenticeships and other training programs as a way to help address the problem.”

What’s next?

In summary, the introduction of automation to U.S. manufacturing has brought with it change but also increased productivity. Products are being made in a more efficient manner, with fewer problems, and at a cost saving to the end user thanks to production line robotics and technology. But still, there is much that we need to do to ready our existing and future workforce to adapt to working with these machines.

In the October issue of our In the Zone newsletter, we will discuss how the worker shortage is being addressed through retraining of existing workers and the recruitment of future workers to the manufacturing industry. We will also profile a local company that builds automation lines for its clients, and interview a local company using automation in its manufacturing.

Increased Use of Automation in Manufacturing Leads to Need for Skilled Employees

Ask life-long Lehigh Valley residents where their parents and grandparents worked back in the day and they’re bound to list a number of large, local manufacturers. The factory jobs ranged from steelmaking to building trucks to spinning silk into garments. Many consisted of hard physical work over long days in dirty, loud, or even dangerous conditions.

Over the years, some of these manufacturers have closed and new ones have started up. And while the companies might have changed, manufacturing is very much alive throughout the region. But it isn’t like what your parents or grandparents experienced.

The modernization of manufacturing in America has led to the increased use of automation – machines that are custom designed to perform basic, and sometimes more advanced, repetitive functions that had previously been done by workers.

In the 1980s and 1990s automation was seen as the enemy, as factory workers feared it would take their jobs away. But for the most part the jobs that the machinery replaced weren’t lost but rather reallocated within the company. Workers had to develop new skill sets in order to work with the machines.

“Concerns about job loss due to automation were largely overstated back then,” said George Lewis, Director of Research and Analysis at Lehigh Valley Economic Development Corporation. “It was not apocalyptic at all. It just meant that companies had to rethink how to utilize their workforce differently, and employees had to be willing to undergo skilled training.”

Long-term impact of a cultural shift

Like the rest of the country, the Lehigh Valley is seeing a large decline in the number of trained technicians to do automated manufacturing work. This is due in large part to a cultural shift that happened many years ago, which placed a greater priority on attaining a four-year college education in order to secure a comfortable office job as opposed to laborious work in factories. So fewer students have been attending vocational or technical schools and instead, have been going the college prep route. That, coupled with a large number of older employees in manufacturing jobs who are starting to retire, equals a shortage.

“Parents, teachers, guidance counselors, and students often don’t have a realistic understanding of what manufacturing is like today, so there is pushback on suggesting it as a career path,” said Karianne Gelinas, Director of Talent Supply for LVEDC. “The expectations and demands are very different today. A completely different set of skills is needed to work in manufacturing now.”

“In the old days, you just had to have a strong back to get hired at a local manufacturer where you were trained on the job, and worked there for life,” explained Jack Pfunder, President and CEO of Manufacturers Resource Center. “Today it’s not a strong back that you need but rather a strong mind. And while some companies still offer on-the-job training to expand your skills, you still need to have a basic skill set to get hired.”

Today’s manufacturers are hiring highly skilled workers for jobs as maintenance mechanics and machinists who understand how a machine operates. Their mechanical aptitude allows them to not only run the machine, but also to troubleshoot when it breaks down, and even to repair it.

“The days of hiring three different people to do all those things are over,” explained Pfunder. “Today we need one employee that knows how to do all of it. That controls costs while minimizing machine downtime.”

To acquire the needed skills, an employee must attend a technical school or take classes at a community college. Some employers offer on-the-job training to help up-train their existing employees, and occasionally they can obtain workforce grants to help subsidize the cost.

Understanding the manufacturing workforce

LVEDC collects data from local manufacturers about the workforce and the types of skills and training they need from employees. Its last study in this area was done three years ago and a data refresh is planned for sometime in the near future.

“Our past studies consisted of data primarily from the region’s larger employers, but this time we want to focus on including the smaller companies with 50-100 employees so that our data is representative of the entire manufacturing workforce in the region, big and small,” said Lewis. “We want to know what skills their employees have and what they are lacking so we can learn where the gap is. Then we can communicate these findings to the larger educational community. These studies help us to get a better handle on the supply and demand in the local labor force.”

LVEDC also aims to keep an open communication loop with the area’s manufacturing stakeholders so they understand what kinds of training programs are available at the Lehigh Valley’s community colleges and technical schools. This can help to build a career pathway for students entering the workforce. “We get the stakeholders together to review our study’s findings and to discuss it. This keeps them engaged and at the table, working with us,” Lewis said.

Manufacturing in the Lehigh Valley today

In 2015, manufacturing was $5.5 billion of the region’s gross domestic product. It experienced 16.5 percent growth between 2011 and 2015. According to the fourth quarter 2016 U.S. Bureau of Labor & Statistics report more than 33,000 people are employed in local manufacturing jobs at between 600 and 700 manufacturers.

“Manufacturing is still growing here,” said Gelinas. “It doesn’t necessarily look like it did before but it’s still relevant. And most importantly, it’s a key target sector for LVEDC to attract companies into the Lehigh Valley.”

“The next generation in manufacturing is automation,” Pfunder said. “Companies need to use it to stay competitive and to modernize. We’re working on recruiting more young people who are soon to be entering the workforce to train for jobs in the industry, while also encouraging unemployed or underemployed workers to consider it as a career. And we also need to up-train today’s manufacturing workers to do these technical roles so they can keep their jobs and continue to grow.”

Pfunder summed up his view on the situation this way: “The bottom line is that skilled jobs lead to better income, and thereby a better quality of life. Who wouldn’t want that?”

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