Articulating the solution to the workforce crisis
To solve the skills gap today for advanced manufacturing, we must first rethink the American higher education pipeline.
Recap
In Defining the workforce crisis, solutions today, and opportunities ahead, we articulated that the basic problem facing advanced manufacturing is clear, yet remains unsolved today: the supply of skilled workers is far below the demand to meet production requirements in the coming years.
We proceeded to outline the core elements of why this problem exists, and ultimately concluded that the basic solution framework to solve this supply shortage will have the following components:
Improve the perception and awareness of manufacturing roles.
Provide clear pathways for individuals to build careers in American manufacturing.
Reduce the cost and increase the efficacy of training to expand the overall skills base of the nation.
In this third and final installment in our workforce series, we will dive deeper into how we will achieve this outcome. Before proceeding with our solution, however, we want to introduce two core macroeconomic trends that are relevant to consider in parallel:
Rising Government Investment in Manufacturing: The CHIPS and Science Act (2022), the Inflation Reduction Act (2022), and the Infrastructure Investment and Jobs Act (2021) are all recent examples of accelerating US government investment in domestic manufacturing. Amid rising geopolitical tensions with China, it is unlikely that this funding trend will slow meaningfully in the coming years.
Rising College Debt Crisis: As of this writing, Americans owe an estimated 1.75 trillion in combined federal and private student loan debt. Enrollment has decreased about 1.5% each year since 2011, but realistically, given the debt numbers cited previously, this is not nearly fast enough, as higher education is completely misaligned financially with graduates.
Combining these macroeconomic trends with our prior analysis, we come upon a clear and unmistakable conclusion: if there existed a social acceptable and financially pragmatic route for American students to forgo college and instead enter the manufacturing industry, we would be able to close the skills gap and simultaneously slash rising student loan debt in one stroke. We will articulate how this strategy can be implemented below.
Improve the perception and awareness of manufacturing roles today
Companies like SpaceX, Tesla, and Anduril make the task of improved perception straightforward - for a person at the onset of her working life, if she wants to work on rockets, electric cars, or autonomous submarines, the quickest path to this career is through manufacturing, not college.
For awareness, there needs to exist a centralized jobs board by state for all open manufacturing roles, and a clear path to connect employers with apprentices who are willing and eager to learn. This jobs board should enable the apprentice to learn more about the company, and the company to learn more about the apprentice, in a seamless manner. In theory, this is what LinkedIn, Indeed, or countless other job boards do; in practice, these job boards do not work nearly well enough for manufacturing-specific roles, and this experience could be dramatically improved to reduce friction for both employers and job-seekers.
Provide clear pathways for students to build careers in American manufacturing today
A core issue with manufacturing, as it contrasts with a field such as software engineering, is that many individuals simply cannot imagine what their career arc will look like years or decades down the line. In other words, there are not clear mental models for career progression or success.
A good solution to this problem would be to curate career paths based on each individual’s unique strengths, interests, and ambitions.
For an entrepreneurial-minded individual, can you identify a strong micro-niche that will be important in the coming decades, gain experience at an existing firm, and then build your own firm using a combination of public and private capital?
For a more technically-minded individual, can you identify the problems most important to humanity today and which companies are solving these particular problems? By breaking down what specific education and experience you need to succeed at one of these firms, a clear career path can be charted.
Reduce the cost and increase the efficacy of training to expand the overall skills base of the nation
The greatest barrier to implementing such apprenticeship programs today is the cost of upskilling workers, especially due to high attrition from workers who do not understand what they are signing up for. If there were cost-effective ways to:
Filter out individuals without the necessary prerequisite attitude and willingness to work.
Provide continuous training and upskilling without requiring significant investment from instructors or senior team members.
Then firms could confidently invest more time towards in-person training for the candidates who pass the initial pre-screening, while also having a reliable means to ensure its employees are able to constantly grow their skills portfolio on the job. Under these conditions, a good training program would look as follows:
Digital Training for Pre-Screening: Training is digital, personalized to the trainee, and focused on providing the preliminary concepts necessary for performing on-the-job training. Candidates must complete the digital training to proceed to in-person training.
More Selective In-Person Training: Trainees are given more personalized instruction on the factory floor and hands on practice with the machines as they learn the skills necessary to complete the job successfully.
Continuous Learning Period: Trainees learn new concepts in conjunction with their day job, including how to operate more advanced machinery, troubleshoot difficult errors, or understand more advanced engineering concepts in a simulated environment. This period is optional per the employer’s preferences, but would demonstrate the firm’s willingness to invest in their employees and thereby bolster retention.
By implementing digital training programs as a screener for more in-depth in-person training, and then augmenting the training period with continuous learning opportunities, firms can maximize the productivity and loyalty of their employees.
Bringing it all together
We began by outlining a clear problem: by 2033, 1.9 million manufacturing roles are expected to go unfilled. We described the qualitative reasons why this problem persists today, and then spent this article outlining how we can resolve the issue. Put succinctly, our solution has four clear steps:
Improve Perception of Manufacturing: Leverage the example set by existing next-generation manufacturing firms such as SpaceX, Tesla, and Anduril to establish an attractive perception of the manufacturing industry and convince young people to defer taking on college debt in favor of building a more ambitious future.
Increase Awareness of Existing Roles: Create a centralized job board of roles to enable individuals to understand the firms they could work with, while providing firms a better understanding of the candidates interested in its roles.
Clear Career Progression: Create personalized career paths to enable job seekers to find roles which satisfy their broader skills, interests, and ambitions.
Digital Training: Leverage digital training solutions to establish a basic toolkit of fundamental knowledge and skills; more effectively filter out applicants to ensure your firm can double-down on in-person training with the most promising candidates; and continuously re-invest in these candidates to foster long-term growth.
This solution will in turn increase the supply of skilled workers, provide students and job-seekers a more affordable and durable alternative to college, and ensure that government funding directed towards onshoring manufacturing actually drives meaningful change.
What’s next?
Anyone who has read all three articles in this series will likely agree that the workforce shortage is a critical challenge, it must and can be addressed, and the solution presented is a meaningful step in the right direction. To conclude, however, we must ask very tactically: what’s next?
If we look first at why existing solutions have failed today, there are three clear reasons:
Government programs have been too broad and focused on a national scale, failing to achieve compounding returns to scale from early efforts.
Community colleges and apprenticeship programs lack the brand and distribution power today to convince students to take an alternative path in life.
Staffing companies are inherently misaligned with manufacturers, as their financial incentives optimize short-term extraction versus long-term value creation.
For this project to succeed, then, our task is clear:
Start with an extremely narrow niche in a region that has:
A high density of manufacturers.
A high density of people who are in school, unemployed, or underemployed.
Focus on implementing the end-to-end solution completely before scaling; when you scale, do so deliberately and methodically. Do not compromise quality for growth.
Validate that our outcomes are financially aligned with manufacturer’s outcomes — we win if and only if our customers win.
Our task now is clear: we must find the right region to build out the end-to-end solution in order to demonstrate a blueprint for a broader national solution.