Over the last few months, I've explored the changing global economic climate and its impact on central Illinois. Recently, I also discussed the workforce needs of businesses and the resulting challenges for our region.
Historically, central Illinois has developed a strong manufacturing sector, employing thousands of individuals and contributing substantially to the regional economy. However, the nature of manufacturing has changed drastically. In years past, manufacturing was regionally centered, utilizing labor-intensive processes.
Nationally, manufacturing employment reached its post-war peak in 1979. Since then, there's been a gradual loss of manufacturing jobs in America. Most recently, central Illinois has experienced an acceleration of this trend, with dozens of local manufacturing companies reducing employment or shutting down their local operations.
While manufacturing employment has decreased over recent years, manufacturing output has increased. Contributing factors include increased productivity, diversification, and globalization. However, some manufacturing sectors have added jobs and increased output by large percentages during recent years. These include the "electronic and other electrical equipment" and "industrial machinery and equipment." These two industries are both high-tech and incorporate substantial quantities of information technology into their products and processes. Both industries are also heavily knowledge-based, with engineering and intellectual capital driving their products and production.
Our "Twenty-First Century Workforce" research also identified several characteristics key to manufacturers prospering in the new global economy. These include:
Products that are competitive, high tech, high value added, and knowledge intensive.
Producers that can compete successfully in national and international markets with products that are cost-competitive.
Rapid innovation leading to decreased cycle times from product conception through design, manufacture, and replacement.
The importance of intellectual property as a key ingredient in product design and production.
Close proximity to customers, suppliers, and major universities or research centers.
This transformation of the manufacturing sector has a profound impact on workers and their communities. Globalization and the need to remain cost-competitive have led to low-skilled manufacturing jobs and processes moving to countries with large pools of available workers and low-cost labor. At the same time, manufacturers seeking to remain competitive in a knowledge-based economy have an increased need for knowledge workers with advanced education and training. These knowledge workers include researchers, engineers, designers, marketers, managers, and knowledge technologists. The term "knowledge technologist" includes positions such as computer technicians, software designers, analysts, and manufacturing technologists. In short, the emerging new jobs in manufacturing will require more knowledge, education, and skill development.
These structural changes in the manufacturing sector are having a profound impact on workers and traditional manufacturing communities like central Illinois. As hundreds of blue-collar workers are losing their jobs in the manufacturing sector in central Illinois, new employment opportunities are emerging in the knowledge workforce. How we reconcile these two realities will underscore challenges for our society for years to come. IBI