A growing political consensus holds that America must restore its depleted manufacturing capacity, both to revive growth in family income and to preserve national security.
We're still moving in the wrong direction. U.S. manufacturers can't fill almost a million open factory jobs. The National Association of Manufacturers forecasts a shortage of 2.1 million factory workers by 2030. Meanwhile, hourly factory wages have fallen to just 78 percent of non-manufacturing wages today, from 83 percent 10 years ago. Manufacturing productivity also declined during the past decade at an average annual rate of -0.1 percent.
A lack of skilled labor hinders manufacturing investment, and a lack of investment erodes interest in skills training. To break this cycle of decline we need a new kind of partnership between industry and government. In Germany, Sweden, and Switzerland, an apprentice system offers young people advanced skills, on-the-job training, high incomes, and social dignity. A German auto worker earns nearly $70 an hour, roughly double the corresponding pay in the United States.
We can't clone the European system, but we can draw an obvious lesson from it. Governments need to provide an alternative to overpriced and often useless university education, and industry needs to provide curricula and teachers. There is no need to wait for the federal government to get its act together. Several states currently preside over systems of universities and community colleges that waste the time and tuition of many of their students. With a public-private partnership, the leading state university systems could be transformed rapidly into sources of skills for industrial excellence.
We are well into the first stages of a Fourth Industrial Revolution driven by robotics and artificial intelligence.
Computerized equipment dominates the work environment in every major industry, be it mechanical, chemical, medical, financial, or service-based. Logistics is a latecomer to automation. At Chinese or Saudi ports, robotic cranes load containers into autonomous trucks and deliver the contents to warehouses, where highly trained specialists guide robots to sort and pack products that once were moved manually by untrained workers.
Robots don't replace humans. Machines may do the actual work but human control guides their efficient operation. Modern manufacturing uses robotics in factories manned by trained people programming highly sophisticated machines.
A visit to a semiconductor chip plant illustrates the point. There, one enters an environment dominated by robotic equipment, where sensors provide feedback to workers to keep the system under control. Errors can cost many millions of dollars, so the quality of workforce training is key to profitable operation. This is not the blue-collar work environment of the past and of popular imagination. The shortage of qualified people is the biggest obstacle to American manufacturing recovery.
In addition to the northern European apprentice system, we can also take lessons from Israel, which follows a different model that is just as effective in providing skilled personnel for that country's high-tech industry. The government funds vocational colleges, and government experts—with help from industry—review their success on a five-year cycle. If a college falls behind in placing graduates in their chosen field, it will lose funds in favor of competitors that do a better job. That competition keeps the educational system dynamic in the fluid environment of changing technology.
In the U.S., the offshoring of manufacturing during the 1980s and 1990s left us without an educational system suited to address these needs. Great universities still train outstanding engineers and scientists, but the majority of colleges offer a general education that leaves graduates unqualified for the technology jobs that manufacturers are struggling to fill. One can graduate from most colleges without a single required course in science.
We need to refocus our tertiary educational programs to meet the needs of young people who do not aspire to the elite professions, but seek a remunerative and dignified career. Community colleges offer vocational training, to be sure, but focus for the most part on service jobs. The main function of community colleges at present is to teach students what they should have learned in high school.
To provide Fourth Industrial Revolution skills, the state university system needs private industry to identify the kind of skills it wants in employees, and to provide curricula, instructors, and—most important—work-study opportunities to help students pay for their education while they learn.
America won't clone the European model, which divides 16-year-olds into academic and vocational tracks. That isn't necessary. If community colleges provide advanced skills training, their students can earn a two-year degree in their trade, and choose either to earn a good living with their skills, or to apply their credits to a four-year degree in the future. We can have both well-paid industrial skills and the social mobility that distinguishes America from Europe.
Imagine a tertiary educational system that has three parts. One part trains professionals in disciplines requiring graduate degrees. We have no shortage of institutions of higher education that train lawyers or bankers.
A second part specializes in specific occupations, such as engineering or computer science. And the third offers certificate degrees in specific fields. Apple CEO Tim Cook has said he can't make an iPhone in the United States because we lack tooling engineers. A handful of community colleges do in fact offer instruction for tooling engineers. We need a lot more, with support from American manufacturers to ensure that instruction embodies the state of the art, and that students have confidence that their new skills will get them a high-paying job.
Our plan won't cost much. The resources already are in place. Consider the country's top-rated state university system—Florida, which has 341,000 students at 12 four-year colleges, and an additional 813,000 students in 28 community colleges. Some of these community colleges already offer vocational certificates, sometimes in partnership with large U.S. manufacturers.
By building on what already works, Florida alone could provide a high proportion of the skilled workers that American manufacturing lacks. Of course, Florida wouldn't be alone. If that state's system enlisted the support of industry to provide technical education on a large scale, out-of-state students would arrive in droves, and other state systems would strive to compete with it.
The community college system is already built out, and already doing many of the right things, although on far too small a scale. Instead of remedial academics, they can offer practical training. And instead of burdensome student loans or taxpayer subsidies, they can—in partnership with industry—offer work-study programs that allow students to segue into the workforce while learning.
There are many things that need fixing in America's industrial profile, including a tax system that discourages capital-intensive investment and burdensome regulation. But the greatest obstacle to industrial revival—the lack of human capital—is something that public-private partnerships can remedy quickly and at low incremental cost.
Henry Kressel is a technologist, inventor, and author. His most recent book (with Norman Winarsky) is If You Really Want to Change the World: A Guide to Creating and Sustaining Breakthrough Ventures (Harvard Business Review Press, 2015). David P. Goldman is deputy editor of Asia Times and the author of You Will Be Assimilated: China's Plan to Sino-Form the World.
The views expressed in this article are the writers' own.
