Over the last decade, manufacturing employment in the Chicago region has fallen by more than one-third. The global market has changed the way products were made and sold, contributing to the view that regional manufacturing might never recover from its major decline of the last 10 years.
A new study released Tuesday says not to give up hope.
The report by the Chicago Metropolitan Agency for Planning shows how the Midwest can position itself to once again be a regional manufacturing powerhouse.
“The shift to technology-intensive advanced manufacturing is creating new opportunities for businesses here in metropolitan Chicago,” agency executive director Randy Blankenhorn said in a press release Tuesday morning.
The report lists a series of steps that can be taken to enhance the region’s competitive advantage. They include maintaining and expanding transportation infrastructure; phasing out Cook County’s property tax assessment classification; strengthening coordination between industry, educators and training providers; and increasing science, technology, engineering and mathematics education in high schools.
The shift to technology-intensive manufacturing has the potential to create new opportunities for businesses and workers because the sector now depends on skilled laborers with advanced training and education.
“After years of declining employment in manufacturing due to off-shoring of jobs, good positions are actually going unfilled due to an insufficient supply of skilled workers,” Blankenhorn said.
The technological advancement is also a critical factor in growth within the sector.
“Our report shows that today’s factory jobs often require not only math, reading and critical thinking, but increasingly also call for workers to understand materials, physics, chemistry, engineering, or computer programming,” Blankenhorn said.
The greater Chicago area stands out as a manufacturing center because of its broad array of output. Other markets tend to focus on one industry – Seattle with airplanes and Detroit with cars. In theory, servicing a variety of industries should help area manufacturers thrive, which in turn stimulates the regional economy.
Despite the diversity of Chicago’s overall output, primary research and development in the region has fallen. In addition, the region’s number of patents – one of the most common indicators of innovation – has not kept pace with other regions.
The industry pitfalls don’t stop there.
The manufacturing sector accounted for 31 percent of mass layoff events and 37 percent of associated initial claims for unemployment benefits in the private sector during January, the U.S. Bureau of Labor Statistics reported Tuesday.
There may still be a silver lining.
Steve Kase, CEO of ASK Products Inc., believes that if the region adheres to the report’s recommendations its growth potential would be realized.
“If we can improve in this location – where it all is still located – the cooperation between federal laboratories, state universities, high school and college vocational training institutions, and then industrial associations – if all that can be brought together, then the opportunity is already here,” said Kase, who is also chairman of the Tooling and Manufacturing Association.
Kase acknowledges that a lot of the responsibility will fall on the state. Historically, Illinois has not been the best place to do business due to generous worker compensation laws and unemployment insurance that is costlier than anywhere in the Midwest. Generally speaking, the state may already be at a competitive disadvantage.
“For us to bring it back together we really need the state to work with us and coordinate all of those players,” Kase said.