Nearly two decades into the 21st Century, it is clear the global marketplace will continue evolving, meaning that businesses and the workforce alike must remain flexible in adapting to this ever-changing economic environment. However, as business demands shift and more modern technologies come online, the demand for high-tech engineering and manufacturing talent is becoming greater than ever. That is why in Michigan, the question of talent and how to strengthen our state’s pipeline has been a No. 1 priority over recent years as new workforce needs emerge. But this challenge is not limited to our state alone.
Workforces across the nation are facing a looming talent shortage. Based on a report from the World Economic Forum, 65% of children entering primary school today will work in positions that currently do not exist. What’s more, over the next three years alone it is estimated that 54% of the current workforce will need to be retrained to remain competitive. Between now and the year 2022, the number of stable, new, and redundant occupations and roles will shift considerably, with an increase in the number of new roles being created, in turn calling for greater training and preparation today to ensure companies are equipped with the highly skilled talent they will need.
By 2022, the share of new, stable, and redundant roles is expected to shift significantly.
However, it is impossible to talk about the talent shortage facing the nation without acknowledging the role that technology plays in this challenge. Much of the anticipated shift in necessary skills is due to the increasing role that automation is playing in our workforce, both today and over the coming decades. While the advent of increasingly sophisticated technologies like the Internet of Things and artificial intelligence is generally good news for consumers, they can also be a troubling sign for certain segments of the workforce whose job duties could end up one day being performed by a machine.
There is no denying that certain jobs tasks will become automated as the Fourth Industrial Revolution gets underway and technology is able to execute basic functions. In fact, while today 41% of the automotive workforce is made up of positions including assembly line and factory workers, in three short years, that figure is expected to drop to 26% as more functions become automated.
Next, consider the manufacturing sector as a whole; between now and 2028, this industry faces a tremendous skills gap to the tune of 2.4 million workers. A talent shortage of that magnitude could lead to a loss of revenue as high as $454 billion, accounting for approximately 17% of the nation’s total forecasted manufacturing GDP and resulting in an indiscriminately adverse impact on state economies around the country.
The manufacturing industry will be hard-hit by a growing skills gap over the next decade.
In Michigan, we are the automotive capital of the world; manufacturing and innovation are in our DNA. It was our state where Henry Ford put the world on wheels and where the revolutionary assembly line was first discovered. Our history is intertwined with the auto industry and our manufacturing prowess; however, we also know that to maintain our state’s leadership into the future, we must start reinvesting in our workforce now.
This is why in Michigan, we are strengthening our workforce and talent pool to compete in the future job market.
At the Michigan Economic Development Corporation (MEDC), we work with companies every day who are considering expanding or investing in Michigan, and the single-most pressing concern continues to be the question of talent and how companies can access it. Recognizing that this nationwide problem will only continue to grow, Michigan is proactively addressing the impending talent shortage by investing in our workers and young people now, to prepare them for the changing demand.
Work, Life, and Education Balance
In 2018, the state conducted research to identify what factors play into a college graduate’s decision to leave the state for work. Through the study, we learned that while paychecks are important, job seekers also place a high value on their time spent outside of work and the recreational opportunities available. That is why the state launched Choose Michigan, a talent attraction and retention campaign that addresses career opportunities at companies that recent graduates may not know about and reminds them of the exciting recreational opportunities available in Pure Michigan.
Luckily, Michigan already is a hub for high-tech engineering talent, boasting the greatest concentration of electrical, mechanical, and industrial engineers in the nation—and we are not showing signs of slowing. Between 2014 to 2018, Michigan experienced the fastest employment growth in engineering occupations in the nation, rising 17% in those five years alone. This leadership would be impossible without the extensive high-tech engineering ecosystem Michigan has cultivated over the years, which helps attract and grow talent in the state.
Specifically, Michigan’s nationally ranked universities and strong community college ecosystem work together to prepare the state’s young people to compete for future jobs. In 2017 alone, Michigan’s 129 regional institutions provided more than 28,000 STEM degrees, including more than 16,000 bachelor’s degrees, more than 6,000 graduate degrees, and more than 1,000 doctorate degrees, placing the state in the top 10 nationwide for the number of STEM degrees completed each year and highlighting our strong commitment to supporting the next generation of high-tech talent.
But with that strong higher education ecosystem comes the need to ensure young people and working adults can access the training and workforce development tools needed to support both current and future in-demand skills. Governor Gretchen Whitmer has made this a top priority of her administration, laying out a statewide goal to increase the number of Michiganders with a post-secondary credential to 60% by 2030, helping us to build on the talent infrastructure we already have in the state and provide companies the confidence that Michigan has the workforce they need.
Inspiring the Right Education
Through proposed programs like the MI Opportunity Scholarship—which provides qualifying high school seniors either two years of tuition-free postsecondary education at a community college or tuition assistance at a four-year institution—and the MI Reconnect program—a workforce development initiative that will create a tuition-free pathway for Michiganders to receive in-demand industry certificates or Associate degrees—Michigan is already working to both anticipate and fill the skills gaps that exist in our talent pipeline.
But not every good-paying job requires a four-year degree. That is why Michigan launched its Going PRO campaign this spring, which is our most ambitious effort yet to help employers fill an estimated 545,000 jobs through 2026. This campaign is a movement that aims to energize Michigan toward a new way of thinking by elevating perceptions of careers in the professional trades. By changing the conversation about these “new-collar” jobs that include careers in high-tech, high-demand industries, we are working to position our state as a leader in innovation.
Across the country, public and private sector partnerships are also emerging to address the need for skilled talent and greater workforce development and training. Thanks to Michigan’s proactive efforts to equip our workers with high-tech and high-demand skills, businesses are taking notice. Companies that have recently decided to invest in Michigan, in part thanks to our strong talent pipeline, include global manufacturers like Fiat Chrysler Automobiles; leading mobility enterprises like Waymo; and tech industry pioneers like KLA and Nexient.
At the Michigan Economic Development Corporation, we are focused on doing our part to complement these efforts as we work to attract and retain jobs within Michigan. For example, when considering the greatest factors impacting job location decisions, 74% of the companies surveyed in a World Economic Forum survey prioritized the availability of skilled local talent as their primary concern, compared to 64% of companies that cited labor costs as their first priority. Through our recently announced Jobs Ready Michigan program, we are enhancing our business attraction efforts by offering companies a nimbler solution for training workers, providing awards to offset the costs associated with recruiting talent and training employees in high-wage or high-tech industries.
In Michigan, we know none of these workforce changes will occur overnight, but there is no denying that change is coming. We must prepare today for the future talent demands facing industries and economies around the world. That is why Michigan is providing the tools and support that enable people to step up into fields where talent is in high demand or where automation will impact future career prospects—because when our people are successful, so is our state.
Jeff Mason is CEO of the Michigan Economic Development Corporation.