Help Wanted: American Manufacturing and the Looming Skills Gap

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A skills gap is the US manufacturing sector’s Achilles’ heel, with nearly 3.5 million jobs at stake over the next decade. It is no longer a short-term issue of filling current hard-to-fill open positions, or one that can reasonably be expected to be solved in time by government policy-makers.

The future of manufacturing has been a topic of debate over the past decade.

RACE AMONG NATIONS

Manufacturing is crucial to the US economy: For every dollar spent in manufacturing, $1.32 is added to America’s economy; 9 percent of the workforce is directly employed in manufacturing; and American manufacturing supports more than 12 million workers directly and 17.4 million jobs in total.7

At the same time, the United States isn’t the only nation that recognizes the economic importance and value of manufacturing. Developed and emerging nations are focused on improving their manufacturing competitiveness, attracting companies, and creating jobs, and as a result, they are challenging America’s position as a globally competitive manufacturing nation. Over the past few decades, emerging countries have taken advantage of their low labor costs and coupled them with incentives and enabling policies to support the growth of their manufacturing base and middle-class jobs. Over the last 20 years, manufacturing, which used to be concentrated in a few developed countries in North America, Europe, and Japan, has gradually moved to emerging, more cost-competitive markets, leading to an eightfold increase in exports from emerging economies in the last two decades.8

Deloitte Consulting LLP and the Manufacturing Institute polled a nationally representative sample of manufacturing companies about the state of talent in the US manufacturing industry. Eighty-four percent of manufacturing executives agree there is a talent shortage in US manufacturing, and they estimate that 6 out of 10 open skilled production positions are unfilled due to the shortage.

Report is written by

Ben Dollar is a principal with Deloitte Consulting LLP’s Human Capital practice.

Bharath Gangula is a manager with Deloitte Services LP and a subject-matter specialist with the Manufacturing Competitiveness Initiative.

Michelle Drew Rodriguez is a senior manager with Deloitte Services LP and a senior sector specialist for Deloitte LLPs US Automotive practice.

Help Wanted: American Manufacturing and the Looming Skills Gap

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