Surprising to some, but certainly not to Larry Pederson, Oregon remains a nationwide giant when it comes to bragging rights in manufacturing.
Various analyses confirm this, the Business Development Manager at the Oregon Manufacturing Extension Partnership (OMEP) says, including one published recently by the website 24/7 Wall St.
According to that report, which reflects data collected by the federal Bureau of Economic Analysis, Oregon’s percentage of manufacturing as a share of gross state product was 27.8 percent, second highest nationwide only to Indiana. The state’s manufacturing output, meanwhile, was $55.16 billion in 2012, 10th highest countrywide.
“We have a tennis match with Indiana. The No.1 ranking in manufacturing kind of goes back and forth,” Pederson tells Leo Rommel of Industry Today. “Sometimes we’re up 15-love. Sometimes they’re up 30-15. It’s pretty much Oregon and Indiana neck and neck.”
Furthermore, the report says $38 billion of Oregon’s manufacturing sector in 2011 came from computer and electronic product manufacturing.
“That output is behind California, but its percentage of total GDP was 20 percent, surpassing by far second place Idaho, where computer and electronic manufacturing accounts for only about 5.8 percent of total output as of 2011,” according to the 24/7 Wall St. article.
The fact that Oregon is regarded as a Goliath in computer and electronic product manufacturing did not surprise Pederson.
“What has a huge impact, obviously, on Oregon’s manufacturing environment is the fact that the single largest Intel site in the world is here,” Pederson says. “When you’re producing a tremendously high-value product, you’ll have a huge significant financial impact.”
But that’s not all the Beaver State is known for. Pederson adds that Oregon is a giant in footwear and apparel manufacturing.
“We’re the headquarters of Nike. Adidas North America is headquartered in Portland. Columbia Sportswear is headquartered here,” he says.
The state’s proximity to Boeing’s operations in the greater Seattle area is another advantage, he adds, as is the state’s influence in food manufacturing.
“Lastly, even though the industry has diminished in importance over time, we’re still a major player in forest products, particularly manufactured forest products and manufactured wood products,” Pederson says. “It’s interesting, if you look back at the last 30 years, from 1980 to 2010, the impact of wood products on Oregon’s gross state product almost flip flops. We were very much a timber and forest-products-dependent manufacturing environment that has flip-flopped over to a technology-dependent manufacturing environment.”
According to the National Association of Manufacturers (NAM), Oregon’s industrial sectors equate to 5,380 manufacturing establishments as of 2009, the most recent figures available.
Likewise, manufacturing’s share of Oregon’s exports was 84 percent as of 2011, according to NAM. Total employment related to manufactured goods in 2009 was 71,200.
“It’s an evolving ecosystem,” Pederson says. “We’ll continue to see strength. Intel is continuing to invest billions and billions in facilities in Oregon. That, to me, speaks well for our future when you have a global leader investing that much in your state.”
Pederson is the first to admit that Oregon lacks “that one superstar university,” like Cal Berkeley or Cal Poly, “yet we’re fortunate to have a statewide university system that boasts notable strengths in key areas for the manufacturing sector.”
He adds, “In addition, some of our players in the private sector are big enough that they’re almost like their own university. They have their own gravitational field. They have the ability to attract the best and the brightest talent.”
There is a reason why, he says: Oregon’s quite dazzling way of life.
“Oregon seems to have a lifestyle that does resonate with a certain type of person,” he says. “We have been an attractive place for thousands of very well-educated, younger folks who, in some cases, move here just because they want to be here. They figure out a job and career later. That’s a nice place for companies to be in.”
But Pederson says he “doesn’t want to paint too rosy of a picture” about Oregon’s depth. Worries remain.
“What we are lacking in is the entrepreneurial infrastructure that they have in Silicon Valley,” he says. “That’s where people say, ‘I’m going to out and put together a team and make some money by starting our own company.’ That is much less pervasive here than it is in Silicon Valley.”
That needs to improve, Pederson says. So, too, he says, does the talent pipeline, which, at least in terms of industrial talent, is not sufficiently cultivating the next generation of skilled workers – not just in Oregon, but nationwide.
“There is an inability to engage young people – those coming out of high school and two-year degree schools – with what manufacturing has to offer as a viable career path,” he says. “We’re collectively trying to grasp this whole issue about how you get younger folks interested in, engaged in, and working in manufacturing.”
The state of Oregon, in conjunction with various school districts, manufacturers, and local politicians, is working to stem the tide. Programs are now in place that encourage factories and plant floors to continuously open their doors for tours, to show children and parents – many of whom are iffy on manufacturing as a career path because they believe the sector is dirty and monotonous and continues to send jobs overseas – that modern-day manufacturing work is not only clean but also analytically driven.
Manufacturing is finally reemerging as a must-be-in profession, Pederson says.
“In the 80s, we seemed to be done being a maker society. Everybody else around the world was going to make things but not us, not the U.S.,” he says. “You can’t just disconnect innovation from making. Innovation and manufacturing have to work together to produce amazing results, and it’s happening, right here in Oregon.”
About the Oregon Manufacturing Extension Partnership
OMEP is a non-profit organization that aims to help Oregon manufacturers respond to the challenges of competing in an increasingly global economy. OMEP works with owners, executives, managers, and operators to assess company needs in all areas. OMEP moves quickly from assessment to implementation to ensure that the company’s efforts provide an immediate payback. Regardless of the starting point, OMEP’s goal is to unleashing a company’s growth potential.
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