As New England’s recovery from the Great Recession continues, attention often turns to which sectors will be the future economic drivers. A recent conference of the New England Economic Partnership, sponsored by the New England Council, examined the role of advanced manufacturing in the region’s future. The central question, given New England’s deep traditional manufacturing history and its demise in recent decades: What is the outlook now for a transformative revitalization of this sector?
In the overall economic picture, the region is clearly recovering, although the pace varies significantly among the six states.
Massachusetts and Vermont are experiencing the strongest economic performance, while Rhode Island and Maine lag. Rhode Island and New England continue to be affected by external factors, such as vulnerabilities in the European economy and the fiscal drag from sequestration of federal funding.
The region is expected to continue to grow slowly, with overall employment growth averaging 1.4 percent a year and regional gross product increasing 3.3 percent each year over the next three years.
Rhode Island is expected to grow slightly above the regional average, but it has significantly higher road to climb to recovery than other states in the region. In employment growth, all six New England states are expected to remain below the national average, due in part to lower overall labor-force growth in New England.
Nonetheless, Massachusetts has already recovered the jobs lost in the recession, and Vermont will soon follow. There’s some optimism on a regional level, though Rhode Island continues to struggle. In Rhode Island and across the region, manufacturing resurgence would have a strong impact on the economic outlook.
Traditional manufacturing has declining for the last three decades, both here and across the nation. New England lost about 60 percent of its manufacturing jobs over the last 30 years, while the U.S. lost 40 percent. The impact of these losses has been manifest in the lower total employment growth in New England over this period — fully 50 percent lower than the U.S. average.
While this is a negative reality, it also highlights the significant impact that a turnaround in manufacturing could have on New England. This is especially true given the broader effect of manufacturing as an economic driver; it is a sector that generates significant exports and pays relatively high wages.
We have a number of opportunities to facilitate the reemergence of manufacturing as an economic driver for the region. Throughout our six states, there are educational institutions, nonprofits, companies, towns, cities and states focused on the efforts to revitalize the existing manufacturing base, and pave the way for exciting new manufacturing capabilities to take root in the region. Some common themes emerge from their collective work.
New England can generate enormous manufacturing gains if the research and development capabilities are leveraged as a network to support and drive new manufacturing capabilities. Home to high concentration of academic and private-sector research facilities, this region can bring together the talent needed to focus on manufacturing, particularly the emerging advanced and precision manufacturing that is replacing the traditional types of production. Compared with other parts of the country and globally, the ingredients for a highly competitive manufacturing sector are in close proximity in New England, which can help promote collaboration and accelerate manufacturing innovation.
The entire manufacturing sector would benefit from clear messaging about how different today’s manufacturing environments are — often pristine, highly innovative and creative work settings that involve challenging, complex processes. Given the reality of that emerging work environment, a particular emphasis on workforce development is required; these are high-paying jobs that require advanced computer and other technical skills.
This is particularly important in Rhode Island, where only 43 percent of Rhode Islanders 25 to 64 have a two- or four-year college degree. Workers with only a high school education face increasing difficulties to find and retain jobs in a global and highly competitive economy.
However, given the high-quality and abundant educational resources available in the region, including the robust community college networks, there is ample opportunity here to equip tomorrow’s workers for the emerging manufacturing environment. If we do, we could dramatically change the region’s economic prospects.
James T. Brett is the president of the New England Council, a business lobbying group, and Ross Gittell is the vice president and New England forecast manager for the New England Economic Partnership and chancellor of the Community College System of New Hampshire.
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