2016 Manufacturing Report Card, Indiana

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WELL-EDUCATED AND WORK-READY LABOR FORCE OF HIGHEST IMPORTANCE FOR HEALTHY ADVANCED MANUFACTURING IN REGION 2 AND INDIANA, RESEARCHERS FIND

A-4trans weWorker in advanced machine shop in Northern Indiana.ll-educated and employment-ready workforce in Region 2 and throughout Indiana matters more than any other single factor in the economic health of advanced manufacturing firms, Ball State University (BSU) researchers concluded in a report for Conexus Indiana.

In evaluating the size, growth and composition of advanced manufac- turing in the United States from 2004 through 2014, the researchers discovered that advanced manufacturing employment has grown, but such job gains have been clustered in STEM (science, technology, en- gineering & math) as well as white-collar employment. “Blue-collar employment in advanced manufacturing has either declined or re- mained unchanged since 2004,” wrote Srikant Devaraj, research assistant professor at Ball State’s Center for Business and Economic Research (CBER), and Michael Hicks, CBER director and an economics professor at BSU’s Miller College of Business.

“Examining the correlates of this growth, we find, as virtually every study before has found, that growth in advanced manufacturing is highly correlated with levels of educational attainment,” the coauthors wrote in “Advanced Manu- facturing in the United States; the Shift toward Diversified Industries & an Educated Workforce,” issued in June 2016.  The study was produced on behalf of Conexus Indiana.

While other factors are important, such as tax and regulatory climate as well as availability of research universities, “over the long run, a well-educated and ready workforce matters more than any other single factor in the health of advanced manufacturing firms,” explained Devaraj and Hicks.

Quote and image of worker.

Indiana's Educational Outcomes for Workforce Concern Researchers; Signal Much Work Ahead

Nonetheless, in a nationwide, state-by-state comparison of how workforce educational outcomes have impacted advanced manufacturing, Indiana placed in the middle tier with a “C” grade. “Indiana’s educational attainment ranks no better than average for the skill areas in which advanced manufacturing depends,” the Ball State researchers said.  “Continued growth and strength in advanced manufacturing will depend on how effectively the K-12 and higher education systems perform in transitioning students into potential employees for these sectors,” they observed.

In related areas examined in the research, Indiana and Region 2 (composed of five north-central counties:  Elkhart, Fulton, Kosciusko, Marshall and Saint Joseph) performed at high levels.  For instance, the state maintained an “A” grade in 2015 manufacturing in light of a record production year (using inflation-adjusted measures). Moreover, Indiana holds an “A” score in global reach and tax climate blueDash18 both of which have assisted in powering the state’s robust manufacturing sector.

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In empowering information, Indiana’s grade in productivity and innovation rose to “B+” by advancing two notches from “B-.” In addition, “advanced manufacturing appears to be very diverse in Indiana, and hence these sectors could with- stand cyclical changes better than most states,” Conexus Indiana said in “2016 ManufState level advanced manufacturing employment share.acturing & Logistics Report Card for Indiana.” All told, the research considered 35 industries as comprising advanced manufacturing.

Moreover, the Hoosier state’s large advanced manu- facturing share is expanding. For instance, Indiana experienced growth of 1.8 percent in advanced manu- facturing employment share between 2010 and 2013.  “This places the state in the top quarter of all manu- facturing growth rates. During the same period, the median growth across the nation was only 0.5 per- cent,” Devaraj and Hicks noted.  top-right-4