The Ohio State’s Fisher College of Bussiness and General Electric released a significant report on middle market companies and held a terrific event with business leaders from around the world in Columbus last week entitled “Leading from the Middle.” GE’s CEO, Jeff Immelt and Dean Poon from the Fisher College of Business extoled the virtues of this company that, sometimes very quietly, provide the jobs and investment that makes our economy tick. Congratulations to The Ohio State and the Fisher School for developing such a great partnership that will no doubt help our efforts to understand this unique segment of the economy.
Additionally, two recent related reports provide evidence that manufacturing in the U.S. is silently growing. As stated in a blog from a contributor to the Harvard Business Review the “Institute for Supply Management (ISM) recently reported that U.S. manufacturing had expanded consecutive for 24 months. Likewise, the Federal Reserve reported a 0.6% increase in manufacturing in July 2011, with a year-on-year gain of 3.8%.”
A more detailed account of this growth is offered by the Boston Consulting Group, which offers additional evidence that as costs rise abroad and shipping becomes more expensive that manufacturers are seeking to reduce risk to their supply chain by serving markets (both in China and in the U.S.), through “on-shore” manufacturing.
Why has this movement not gained more attention? First, while this is a good trend for the United States, it will not make a significant dent in our short-term job numbers. Manufacturing companies are incredibly efficient and productive, and are able to manufacture more and more with less and less people. We see evidence of this with the manufacturing companies we work with each day both within the Columbus Region and those considering new operations.
Second, even if the jobs created in the manufacturing sector continue to grow, it will take years for us to point to the evidence of this in our communities. By its nature, manufacturing investments take time and effort to establish and build its operations, install equipment, etc. Finally, manufacturing is typically done in modest communities in the middle of our country, far from the media’s eye.
Despite its lack of general attention, this sector of the economy is of critical importance to the Columbus Region both for the innovative capacity it instills in our communities and workforce, and for the capital investment it makes to our communities. We have work to do to prepare our communities for such investment, preparing 21st century industrial parks and developing skilled workers able to perform in a modern manufacturing environment. We also need to give the industry and those that work within it the respect they deserve and remove obstacles to their growth.
Our team visited clients in New York last week and attended a CBRE conference to connect with several site location consultants in Nevada. We also hosted a site selection advisor and held a meeting with economic development representatives from each of our eleven counties.
Chief Economic Officer