A Deloitte/World Economic Forum report reveals that 10 million global manufacturing jobs are currently unfilled, further exacerbating the manufacturing skills gap problem plaguing the United States. Despite the high unemployment rate in many countries where companies are struggling to fill these jobs, the companies cannot attract, develop and retain the highest skilled talent.
The future nature of global manufacturing will be competition for talent, according to a report released in late April by the World Economic Forum and Deloitte Touche Tohmatsu Limited (DTTL).
The report (“The Future of Manufacturing: Opportunities to Drive Economic Growth”) estimates that 10 million manufacturing jobs worldwide cannot currently be filled due to a growing skills gap. This shortage of highly trained workers and engineers is pervasive despite the high unemployment rate in many developed economies where companies struggle to fill manufacturing jobs. At the same time, emerging economies cannot fuel their growth without more workers in the skilled production category.
“In the race to future prosperity, nothing will matter more than talent,” says Craig Giffi, vice chairman and Consumer & Industrial Products Industry leader at Deloitte LLP, who helped write the report. The skills gap, he says, will not likely close in the near future. That means companies and countries that can attract, develop and retain the highest skilled talent—from scientists, researchers and engineers to technicians and skilled production workers—will come out on top.
Innovation Leads to Differentiation
Innovation will play a key role in determining which countries and companies can succeed in global manufacturing two decades down the road, the report reveals.
“Companies regarded as more innovative grew net income nearly two times faster from 2006 to 2010 than their non-innovative counterparts,” says John Moavenzadeh, the World Economic Forum’s senior director for Mobility Industries. “Meanwhile, countries that are more successful at fostering innovation performed better when it comes to both gross domestic product (GDP) and GDP per capita.”
Bottom line: Manufacturers must innovate to stay ahead of competition. They must also be enabled by infrastructure and a policy environment that better supports university and research lab breakthroughs in science and technology.
Priority: Surging Energy Consumption
The report also looked at the role energy will play in the future of manufacturing. Manufacturers and policymakers must prioritize affordable clean energy strategies and effective energy policies. “By 2035, the US Energy Information Administration expects world energy consumption will more than double from a 1990 baseline,” says Tim Hanley, global leader for manufacturing at DTTL. “Manufacturers will need to seek new energy-efficient ways of manufacturing, from energy efficient product designs to more efficient production and logistics. Collaboration between manufacturers and policymakers will increasingly be an imperative to solve the global energy puzzle.”
The report results from a year-long effort combining primary and secondary research, including a review of academic and industry literature, interviews with more than 30 manufacturing business, academia, and policy leaders, and virtual task force meetings. In addition, industry, policy, and academic stakeholders provided valuable input to the report during seven face-to-face global workshops.
One theme recurs frequently throughout the report: Collaboration between governments and private sectors will be critical. “With competition increasing for so many resources and capabilities—and with the prosperity of nations hanging in the balance—policymakers will be actively looking for the right combination of trade, tax, labor, energy, education, science, technology, and industrial policy levers to generate the best possible future for their citizens,” Giffi emphasizes.
The full report is available at www.deloitte.com/futureofmanufacturing. (Click on the “Download attachments” button.)
Deloitte Touche Tohmatsu Limited is a UK-based private company limited by guarantee. Its Global Manufacturing Industry group is comprised of around 2,000 member firm partners and more than 13,000 member firm industry professionals in more than 45 countries. For more information, visit www.deloitte.com/manufacturing.
About World Economic Forum
Established in 1971 and based in Cologny, Geneva, Switzerland, the World Economic Forum is an independent international organization committed to improving the state of the world by engaging business, political and academic leaders in shaping global, regional and industry agendas. For more information, visit www.weforum.org.