Welcome to Our Changing Gears Live Chat

September 23, 2010 | 1:28 PM | By Changing Gears

FILED UNDER: Innovation, News, Changing Gears

Welcome to the first live chat from Changing Gears, a new public media project that looks at the future of the Midwest. We kicked off on the air this week, with reports on The Film Factory, Sandusky, Ohio, Reversal of Fortune and Brownfields. But this is a two-way conversation. And now we want to hear from your ideas.

We’re discussing Big vs. Small — What’s the Future of Our Great Lakes Cities? Vince Duffy, the news director at Michigan Radio, is your moderator. Listen along to our call-in show at 3 pm ET/2 pm CT on WBEZ, Michigan Radio and ideastream, and post your thoughts below. Rules: keep it clean, keep it thoughtful.

Changing Gears Live Chat

Lori Dick

One way we can start “thinking differently” is to recognize that not all kids are destined for college, and to bring back vocational training to our high schools. Manufacturing (along w/ other industries) is facing a severe skilled labor shortage, and we need to feed the pipeline for our future workforce.

Lori Dick

Society of Manufacturing Engineers
Lori Dick

By the year 2012 it's estimated the U.S. will be three million skilled workers short. A recent survey found 22 percent of American businesses say they are ready to hire if they can find the right people.

Lori Dick

Society of Manufacturing Engineers
Vduffy

Lori, given the budget difficulties states are facing in the Midwest, how would you propose that school districts pay to create those programs and classes?

LDick

Industry should be part of the solution. There are companies like Haas that will supply some of the machining equipment for educational use. But even changing the discussions around what makes for a good job would be a help.

Lori Dick
Society of Manufacturing Engineers

Tucker Lebnoch

Like Dr. Grimes comments about urban areas and the link to the “knowledge economy” – makes it crystal clear that the fate of Detroit effects us all, like it or not.
Lori Dick

The repetitive assembly manufacturing jobs are not likely to come back. The maufacturing workforce today and into the future needs to have technical, math, scientific skills, along with problem-solving and communication skills.

Lori Dick

Society of Manufacturing Engineers

Bpung

This is exactly why creating affordable continuing education will become even more important than it is now. Access and Affordability are two key challenges identified by the Spellings Commission on the Future of Higher Education that will slow the move to create more knowledgable workers as oppsed to purely knowledge base industry.

Vduffy

But Tucker, in many parts of Michigan it seems like the residents and even the politicians just want to ignore Detroit. They often claim that any investment made in Detroit is throwing money away. How do we bring cities like Detroit into this “knowledge economy?”

Tucker

We have NO CHOICE, we MUST fix Detroit, period. Those that ignore that fact, hold us all back. Don't think that this mentality hasn't effected everyone in Michigan, it has and will continue to be a major factor in any attempts at diversification.

Lori Dick

Because they laid off so many workers — more than two million since the end of 2007 — manufacturers now have a vast pool of people to choose from. Yet some of these employers complain that they cannot fill their openings. Plenty of people are applying for the jobs.

The problem, the companies say, is a mismatch between the kind of skilled workers needed and the ranks of the unemployed.

EconomyWatch, July 22, 2010

Lori Dick

Society of Manufacturing Engineers
Michel

Why are we requiring college, when a majority of jobs could be done with 6 months to 2 years of vacational educations. Is it right that we are forcing kids to go 80K+ into debt with less than a 50% chance at a job. Or that if they do get a job it will pay so poorly that they can can't afford to pay the loan. I feal like we are truely becoming wage slaves.
Chris

The service economy idea is severely flawed, and not really representative of what is going on out there. If we are truly moving towards a service economy, why are more and more companies setting up technology centers in countries like India and China? These are facilities that employ hundreds of engineers and technicians. Highly educated people losing their jobs to places perceived as “low-cost” labor sources.

One big problem that people do not talk about enough is that the government has failed, and continues to fail, to manage international trade. As long as the government encourages lop-sided international trade, we will be in trouble…and it will only get worse.

Rlross

I agree. We don't want a service economy. We cannot possibly create prosperity by selling insurance to each other. We can have a manufacturing economy, but we have to realize it will be a different form of a manufacturing economy.

We had a good run on fossil fuels and large corporations like those in the auto industry. Now we need to diversify our energy supply as well as our manufacturing sector. Instead of three huge companies manufacturing cars, we need to transition to more and smaller companies making a more diverse range of goods and components of those goods.

For example, Dow Corning manufacturers silicone in mid-Michigan. They spun off a company named Hemlock Semiconductor that uses silicone and manufacturers semiconductor and photovoltaic cells for solar systems. As Hemlock has grown, the number of small suppliers and customers buying their products has been growing as well. This is the type of business cycle we need to promote.

Also, in addition to diversifying our manufacturing sector, we also need to diversify the types of business models upon which the newer smaller companies will be based. We created great prosperity in the last century through the creation of large publicly traded Corporations. That business model is inherently 'greedy'. It is constantly under pressure to reduce costs and maximize profits or risk a loss in value for disappointing Wall Street. That has resulted in the outsourcing and job losses that we see today.

Smaller, privately held companies do not have those same pressures. We should consider promoting different forms of companies such as employee-owned and co-operatives. Those structures will assure that workers will receive livable wages. In exchange, as owners, workers will be very motivated to help their companies succeed.

The biggest problem these smaller companies face is obtaining funding. Venture capitalists want to invest in Corporations that will eventually go public because that is how they maximize their profit. Smaller companies also cannot raise funds by selling stocks or bonds. They have to rely on either small individual contributions (e.g., from employees starting an employee owned business) or from banks. Unfortunately, big banks are still not lending to small companies. Some community based banks are trying to fill the void, but they are very risk averse and concerned about lending to small startups.

Many people have been asking about the proper role of government — they can make more funds available to small businesses. Not in the form of bailouts, but in the form of loans. If banks wont loan, then the government should loan directly. And some of these smaller businesses can get started with relatively low initial capital investments — particularly if they can work out alternative agreements with their vendors and customers.

There are solutions to the problems we face today. Unfortunately our government officials have demonstrated that they are completely incapable of providing any leadership. Coordination and leadership will have to come from another sector. At this point, it seems that academia may be the best place to start. Academia has led other revolutionary changes in technology and the economy and they can do so again.

Vduffy

Lori – do you think companies and private businesses would be willing to pay more in taxes if they knew it would be used to train future workers?

Lori Dick

Interesting question. I think there are too many political barriers to answer that question yes or no. But if the business community doesn't do something to support educating their future workforce, they will be crying for lack of workers as the 76 million baby boomers retire.

Lori Dick
Society of Manufacturing Engineers

Glen

I am a product developer and patent owner. When I look for manufacturers I have no problem finding partners in China, Australia, Europe, you name it, but I don't waste my time looking for U.S. manufacturers. Chicago is full of foreign trade offices that match developers to manufacturers — because they want all the manufacturing work they can get. There is no equivalent in this country. That's where the rubber meets the road — right there. Local economic development offices and domestic incentives are just no match to what is available oversees. I'd like to help the economy by manufacturing and exporting from here, but there is no connection between the innovation pipeline and the manufacturing base. It's unfortunate, but that's just the way it is.
Dan Pepper

Should Rick Snyder win the governorship Michigan, his ability to seed and grow tech companies could usher in a new dynamic. Think of the redeveloped Pfizer campus facility becoming “incubation central.” This would allow Michigan to retain more of its graduates.
Mister

@Chris – Agree with your comment, just what has the service economy done for the UK that lost control of it's manufacturing? From what I can see people still use cars, refrigerators, power transformers, computers, etc.
Vduffy

Glen – what, specifically, could domestic chambers of commerce or companies do that would improve their chances of winning your business?

Glen

The U.S. Patent office issues about 150,000 patents a year. Not all of those are new products, most are improvements on existing products, but can you name one new mass market American product (like you would buy at Wal-Mart) made here? Probably not. That's because years before the patent issues, the owner (like me) has already made manufacturing deals with foreign manufacturers. You have to understand how it works. If you're a Chamber of Commerce and you want to attract manufacturing jobs from the American owners of intellectual property, the only way you would know about it is when it's published (made public) by the patent office. Even then, the owner can file a non-disclosure so no one will see their innovation. By then it's way too late. Patents are only good for 20 years, so all the manufacturing work has to be set up ahead of time (to maximize value). The Canadian foreign trade office is doing a great job for me right now. Using my specs, they find manufacturers in Canada who can build one of my inventions. Under NAFTA, that will cover the U.S., Canada and Mexico — everybody wins! As an innovator I love it. There are 500,000 manufacturers in this country. I do not have the time to interview all of them. The foreign trade offices will do all that work for me. My partner in China is thrilled to export product back to the U.S. I asked him once why China was so much more successful than the U.S. He explained it this way, “we (China) are a developing economy, we need all the technology we can get, you (the U.S.) are developed already, you are not as hungry as we are”. The work that is going to Canada is a really big project, 500,000 units a year for export back to the U.S, but there is no one here that will find domestic manufacturing capacity for me — no one. All that talk about training and reinventing cities is just a bunch of hot air. Like I said before, where the rubber meets the road is when the intellectual property owners look for manufacturers. I have tried the Illinois Commerce Dept. and asked them, “have you ever matched a new product to a manufacturer”? They said no, never. They had all kinds of reasons why, but other countries don't have all those barriers, they just care about the work and I just care about getting my products to market. If there are 500,000 manufacturers, there are just as many Chambers of Commerce. I don't have time to interview all of them either. But the foreign trade office is one office for the whole country. I tell them, I need a facility that can do this, and this, and this. They give me a list of, say 5 companies willing to do it. If I had to go to every Chamber of Commerce it would take forever. The U.S. Commerce Dept. is supposed to help, they have all kinds of economic development programs, but if I told them to find me a manufacturer, they would go the the Manufacturers Association, only the Manufacturers Association is opposed to anything President Obama does, so they are in no hurry to help HIS Commerce Dept. See how it works? I don't know if this helps. ake it from someone who lives it everyday. There is just not enough cooperation in this country. There was another post here about all the IP going to India, that's 100% right. There is just no incentive to keep the work here. You asked about specifics, if there are 500 Chambers in the Great Lakes, that's too many. There can only be 1 (maybe), if Washington is not going to help. If there was one per region maybe that would be manageable. As it is, there are way too many, plus all the tax districts. Then do what the foreign countries do. Every time there is a U.S. Patent Office Conference in the area, set up a booth so IP owners will know there is 1 source (not 2 or 500) 1 source that will match product developers to manufacturers. Now really big companies, like Proctor and Gamble have their own in-house IP acquisitions dept., but every small manufacturer cannot all interface with every innovator, somebody has to coordinate it. I hope that answers your question and gives you a little inside perspective. I really do hate to see the work go out of the country, but I am hardly the only one that uses that system. Why do you thing there are so many foreign trade offices in every major city? One more thing, all that work they do for me — it's free! If I used the Commerce Dept., they would charge me hundreds of dollars. Good luck!

Vduffy

Dan – Snyder could do that as a private businessman. Can anyone do that from the Governor's mansion?
Galo Rob

Can someone please list the phone number again? I'm a 24-year-old who would love to call in the show.
Tucker

:China and India don't 'own' the intellectual property to all this stuff they are making for us, but they are getting it – the R&D and the educated people too. Doesn' make sense to stay on our current path to info workers, many of which were already outsourced anyway.
Eric Snyder

Knowledge workers do not have as bright a future as you think. I was one – in a big way. Very few programmers are needed to create products which eliminate the jobs of thousands. Outsourcing is a relentless drain on programming jobs. Once out of work, ageism in the IT world makes it next to impossible for the older worker – mid 40s and up – to get a job. Americans have been fooled into thinking that working as independent contractors is the way to go. The contractor is powerless against the huge corporation, having no union affiliation of protection, they are disposed of at will for no other reason than it is cheaper to bring on a newer, cheaper model.
Vduffy

Rob – the phone number is 888-968-7677
http://pulse.yahoo.com/_X2BFJAXEPEYMBWYXGE7QJ3SZKQ rafael

For starters, the USA has to come down in their standard of living. The amount of resources consumed by the USA is incredible. To wit, instead of buying a pair of shoes every other month, one pair a year should be the norm. And this will require a higher quality item, made by artisans, instead of cheap mass produced throw away items made by semi slaves some where in the east.

Greetings from Yucatan, Mexico.
Vduffy

If you had high school aged students in your home, what advice would you give them today? Learn a trade or go to college?

Bpung

The two are not mutually exclusive. My son is 4, I used to teach high school and I currently teach at community college. My adivce in the past has been, and will continue to be, get the education you need to do what you are good at and someone will pay you to do. Trade schools and community colleges are best for some occupations, but not others. If they don't know what to do, going away to college can be a great way for them to explore some academic options through their general education requirements. Community college can also offer this option at less cost, but sometimes staying at home can inhibit the exploration through peer interaction and the campus life experience.

BPung

Faculty, Washtenaw Community College
Lori Dick

It still depends on the child's interest and abilities, but trade or skilled labor jobs should be part of the options. More importantly, children need to be engaged by science, technology, engineering and math subjects (STEM). Without a background in STEM subjects, a high school graduate reduces his/her job opportunities for the rest of his/her life.

Lori Dick
Society of Manufacturing Engineers

Rlross

We cannot sacrifice the big cities and expect that sacrifice to benefit smaller communities. We need a mix of both. We need the population density and concentration of wealth that we see in bigger cities in order to support major research hospitals and Universities as well as to support and maintain our infrastructure, e.g., water treatment, sewers, roads, etc.

For example, most of the smaller communities surrounding Detroit depend on the city's infrastructure for water and sewage treatment. It would not be cost effective for each community to run these systems.

But we need to encourage smaller communities to stop competing for business (e.g., with tax breaks and incentives for large businesses) but instead get communities to start coordinating their economic plans. Cities have long had land use planning, they need to develop more effective and coordinated economic planning in their communities.

We are actually starting to see this in some of the smaller cities in Michigan. For example, in mid-Michigan, Dow Corning manufacturers silicone which is a key component in solar cells. Now we have a very successful company nearby, Hemlock Semiconductors which takes that silcone and manufacturers the photovoltaics for solar cells. We are also seeing other solar related companies sprouting up in the area to complement and support these industries.

The shift is not from Big Cities to small communities, but from huge corporations employing hundreds of thousands of people to smaller more specialized companies. These companies still need managers and engineers and accountants, but they also still need skilled labor and workers. Not everyone needs a college education, but some of these industries do require different skills than an auto plant and we need to retrain those workers.

In addition to manufacturing, we also need to recognize the potential job creation that could result from changing the way we view our agricultural system. We have tremendous waste products from our current agricultural system. We can take convert what we currently call waste into useful products. They have done this very effectively in the little town of Hardwick, Vermont. The New York Times had an article on this town a few years ago: http://www.nytimes.com/2008/10/08/dining/08verm.html. There is also a short video online about how entrepreneurs in the community are creating their own ecological and economic system.

Rhonda Ross

Assistant Professor

Saginaw Valley State University

We can all learn a lot from Hardwick
Vduffy

Rhonda – Great points. They've been trying to do that type of regional cooperation in NE Ohio for years, but it never seems to work well when it comes down to actually helping another community get the jobs you want for your community.
Tucker

Great show, look forward to many more with some new thoughts and ideas.
Bpung

One of the challenges in a “switch” to knowledge economy is overcoming perceived class differentials between knowledge based industry folks and manufactering based jobs. An earlier caller indicated knowledge jobs as “sales and marketing”. Part of the challenge is in defining what exactly this looks like. Many manufacturing jobs historically paid much more than knowledge jobs.
Vduffy

As of 4:00 pm ET, this discussion is no longer being actively monitored, but please feel free to continue the conversation.
Mark S

Just listened to the program, and though I missed a big chunk in the middle, I didn't hear any talk about the radical decline in available energy that is in progress as we have just entered the era of dwindling oil supplies. By most accounts, we are going to have a fraction of the energy available that we have (as well as a fraction of other resources such as minerals and water), even if we immediately ramp up renewable energy sources.

One of the biggest transitions implied by this is transition in the agricultural economy. In our current agricultural system, we are basically eating oil. Food is fertilized with oil, treated with oil-based pesticides, transported and processed with oil, and cooked with oil. With declining energy resources, we will need to drastically shift our agricultural system to accomodate increases in human labor as we will no longer be able to rely on cheap petroleum. We are seeing the waning of industrial agriculture as such centralization no longer becomes possible. Richard Heinberg, one of the foremost researchers on Peak Oil, claims that we will need to train almost 50 million farmers in the next 20 years. Any look at the exploding organic and local foods sector shows that this is an area of extreme growth, and is very promising and helps build regional identity and economy. How come nobody wants to talk about farming and its future?

-Mark Shipley
Sustainable Food Advocate
Chicago, IL
Bpung

The problem outside of “changing gears” ( as an appropriate metaphor for changing the way we think) is to make sure that the teeth of these gears interact to provide motion and action. A gear in isolation works much harder than a group of gears to accomplish the same task. The same can be said for a more regional approach to this challenge. Cities like Ann Arbor and Madison have a high degree of diversity of industries that are supported by the fact that they house colleges and universities. The opportunies for continuing education other than a bachelors degree help maitain this variety of employment. Another factor contributing to the success of these two cites is their interaction with the surrounding smaller communities. This interaction enhances the arts, farmers markets, and smaller cottage industries in the surrounding towns as well as provides a rotating non-residential influx of people to the city.
Jmkptmba

On your show Fri 9/24 one of your callers and the hosts talked about breaking away from the “corporate” jobs. One of the answers floated was to start small businesses and break away from the “norm”. I love it except, where are people going to get their health insurance???? We have workplace based healthcare plans. The Obama plan may or may not be the answer-it doesn't get fully implemented until 2014 and I'm not sure it is going to be affordable. And I find it interesting that many of your callers want government to fix the lack of jobs but I would guess some of them don't want government in their healthcare.

As a Physical Therapist I would love to open my own practice but cannot because of the healthcare issue. My husband and I both have pre-existing conditions so we have to stay in group healthcare plans. I'd like to say that I don't think we are going to fix the job problem in any part of the country with the present healthcare environment in this country. If we have affordable healthcare, perhaps government funded like a Canada system, then perhaps people can start those small businesses and get our region back to work.

Thank you for allowing me to speak my mind.
Tony, a software developer

I think there are two flaws in our thinking:

a) 'Knowledge Economy' new

b) Manufacturing is not knowledge work

America always led the world with a stonger knowledge base. We had an edge in car making knowledge, but now its “commodity.” But that doesn't make manufacturing a 'non-knowledge' activity. According to Society of Manufacturing Engineers, we have a shortage when it comes to manufacturing talent…not surplus.

To Chris's point below, I think one of the reasons for establishing tech centers in India is that certain elements of writing data processing software is turning into a “commodity a activity.”

So IMHO, we must:

a) continue investing in basic research (such as NSF projects)

b) invest in knowledge intesive industries (let's not try to bring back car making…it won't work)

c) build an education system that is tailored for the knowledge economy. It doesn't mean every one needs a masters degree to survive. It's our ability to churn out high tech technicians

http://www.sme.org Lori Dick

Tony — I do want to point out that when we say that there is a shortage of manufacturing talent, we are talking about “skilled workers” — not the guys on the line doing repetitive assembly jobs.

Lori Dick

Society of Manufacturing Engineers