1576 Advanced Manufacturing COE
Doing What Matters for Jobs & the Economy SE C T OR P R OF ILE
ADVANCED MANUFACTURING
WHAT IS ADVANCED MANUFACTURING? Some experts define advanced manufacturing as a new way of accomplishing the "how to" of production, where the emphasis is on customization and scalability, while advancing the technologies necessary to improve capabilities. Paul Fowler of the National Council for Advanced Manufacturing (NACFAM) defines advanced manufacturing as an entity that: "Makes extensive use of computer, high precision, and information technologies integrated with a high performance workforce in a production system capable of furnishing a heterogeneous mix of products in small or large volumes with both the efficiency of mass production and the flexibility of custom manufacturing in order to respond rapidly to customer demands." (PCAST) WHY ADVANCED MANUFACTURING? The manufacturing sector is critical to California’s economy. For every one job created in manufacturing, at least two and a half jobs are created to support the sector. Further, manufacturing firms create regional wealth by producing a product that is exported across the state, nation and/or world. This attracts additional funds to the region — building wealth for businesses, individuals and community. Because of this ripple effect, manufacturing firms have a deeper impact on the state of the economy than most other industries.
quick facts about manufacturing
EMPLOYER SAYS “Advanced manufacturing jobs require high level analytical and technical skills… They pay well and provide advancement opportunities. There is a need to invest in both incumbent workers training and re-training of displaced workers for manufacturing craft careers”.
There are about 47,000 manufacturing businesses in California - Rod Hoover, HR Manager, Manufacturing sector accounts for 1.4 million jobs in California, which makes up 7% of the California Steel Industries, Inc. state’s employment across all sectors. The sector is showing signs of economic improvement; it added over 15,400 jobs from 2010-2011. The growth has been led by firms engaged in computer and electronic product manufacturing, metal product manufacturing, and machinery manufacturing. Total revenue generated by manufacturing sector in 2010 was $424 billion. Average 2011 sector earnings per worker were $90,935, which is 54% more than an average across all sectors in California WHAT IS DRIVING GROWTH? challenges Employers report that California’s regulatory climate is difficult, expensive and time consuming to navigate, such as conducting environmental impact studies or obtaining permits. When competing with other low-cost economies, California manufacturing firms have: -
higher health care expenditures, higher salaries and other benefits, higher environmental compliance costs, higher corporate tax rates…
U.S. high school students lag behind in math and science based on Program for International Student Assessment test scores. U.S. manufacturers report a shortage of skilled production workers (machinists, operators, etc.) which hinders their ability to expand operations or improve productivity.
opportunities Outsourcing costs are often underestimated. The sticker price provided by out-of-the-county manufacturing firms does not include costs associated with national policy issues, changes in currency exchange rates, trade secret thefts, supply chain disruptions, etc. Benefits to working local include: -
improved quality and consistency of inputs; ability to create just-in-time operations; and reduction of intellectual property theft issues.
As this viewpoint gains popularity, it will shift production back to the United States, creating jobs and wealth in the process. As firms now expect employees to apply scientific and technical principles to structures and processes, many manufacturing jobs require postsecondary education, skills certification, and/or credentials.
Centers of Excellence
www.coeccc.net
WHAT INDUSTRY CLUSTERS ARE PROJECTED TO GROW? Manufacturing sector in California accounts for over 1.4 million jobs. The largest manufacturing clusters by number of jobs are Computer/Electronics, Food Processing, Aerospace, Biotechnology, Building Materials, and Fashion/Clothing. Due the recent economic recession manufacturing firms across all industry clusters had to cut employment, except for biotechnology and food processing that added new jobs, although in small numbers. Last year was a dynamic year for the manufacturing sector. Most manufacturing clusters in California gained anywhere from 200 to 8,000 jobs. The computers/electronics cluster added the most jobs, with a growth rate of 3% for the year, followed by biotechnology (1%) and aerospace (1%). If the uptick in employment continues, this data may serve as an early indicator of optimism for future growth in the sector. JOBS BY TOP MANUFACTURING CLUSTERS, 2006-2011 267,261
Computers/Electronics
240,466
Number of Jobs
232,430 Food Processing
202,052
203,286
201,485
Aerospace
191,119 167,895
181,170 176,134
178,756
Biotech
174,004
143,798
Building Materials Fashion/Clothing
111,989
2006
2007
2008
2009
97,468
97,692
91,042
91,267
2010
2011
The graph below demonstrates sector “winners” and “losers” by the number of jobs gained or lost in the one year period, 2010-2011. Clusters showing signs of recovery and growth are computer manufacturing, machinery, biotechnology, aerospace and others. Among the industries that are still cutting jobs are transportation manufacturing, printing, furniture, and petroleum. RECENT CHANGE IN EMPLOYMENT BY CLUSTER, 2010-2011 Computers
Industry Cluster
Machinery Biotech Aerospace Metals Food Mfg. Plastic Products Paper Products Dental Equip. Fashion Building Materials Chemical Household Products Petroleum Furniture Printing Transportation
(3,000)
(1,500)
Recent Change in Employment (2010-2011) 0
1,500
3,000
4,500
6,000
7,500
9,000
Jobs Gained/Lost
Sector Profile: Advanced Manufacturing, April 2012
– Economic and Workforce Development through the California Community Colleges –
Centers of Excellence
www.coeccc.net
WHAT CLUSTERS ARE DRIVING ECONOMIC ACTIVITY? The manufacturing sector generated nearly $424 billion in revenue in 2010. Food manufacturing generated the most revenue ($90 billion), followed by computers/electronics ($50.6 billion), biotech ($42.5 billion), and aerospace ($41.9 billion). Sales in the manufacturing sector have a significant impact on the economy. Not only does revenue generated in the clusters contribute to the state through sales taxes, corporate taxes, etc., it also generates a higher level of activity among firms in the supply chain than other sectors. This equates to more employment and state tax revenue as manufacturing clusters grow and prosper.
2010 REVENUE BY MANUFACTURING CLUSTER
Metals $19.6 B
Building Materials $28.1 B Machinery $31.8 B
Furniture $8.2 B Household Products $7.2 B
Dental $1.8 B Transportation $17.5 B
Food Processing $90 Billion Aerospace $41.9 B
Chemical $9.3 B
Fashion $19.4 B
WHERE ARE THE “HOT SPOTS”? Printing Computers/ Biotech Los Angeles/Orange region is home to about $13.1 B Electronics $42.5 B 28,800 firms, roughly 60% of all manufacturing $50.6 B establishments in the state. Thus, it accounts for the most sector jobs and revenue as well. Other regions Petroleum Paper with significant manufacturing sector employment $15.4 B $15.2 B include Silicon Valley, East Bay, San Diego, Central, and Inland Empire. However, the cluster composition differs from region to region. For example, while computer/electronics drive growth in Silicon Valley, the biotechnology cluster is critical for San Diego/Imperial, and food manufacturing leads the sector in Central Valley. MANUFACTURING EMPLOYMENT & REVENUE BY REGION
Plastics $12.4 B
LOCATION OF MANUFACTURING FIRMS 2011 Region Employment Los Angeles/Orange 617,000 Silicon Valley 171,000 East Bay 123,000 San Diego & Imperial 112,000 Central 107,000 Inland Empire 92,000 San Francisco 58,000 South Central 58,000 Greater Sacramento 52,000 North Bay 47,000
Sector Profile: Advanced Manufacturing, April 2012
– Economic and Workforce Development through the California Community Colleges –
Centers of Excellence
www.coeccc.net
HOW MUCH DOES IT PAY? Manufacturing represents the fourth top paying sector in California, only behind utilities, information, and management of companies industries. With the annual sector earnings per worker at $90,935, manufacturing pays 54% higher wages than the average across all other sectors in the state. Earnings in the manufacturing sector vary significantly by cluster. The highest average wages are offered to workers in petroleum ($283K), computer/electronics ($153K), biotechnology ($115K), aerospace ($102K), and machinery ($92K). Clusters that pay lower wages include fashion/clothing, printing, furniture, and household products. TOP 10 SECTORS IN CALIFORNIA BY AVERAGE EARNINGS, 2011 Utilities Information Management of Companies
Manufacturing Finance & Insurance Prof., Scientific, & Tech Serv. Mining, and Oil & Gas Government Wholesale Trade Construction California Average $0
$20,000
$40,000
$60,000
$80,000
$100,000
$120,000
$140,000
$160,000
WHAT JOBS ARE IN DEMAND? Jobs that are projected to be in high demand in the next three years represent a mix of occupations requiring some level of vocational training, work experience, and Bachelor’s degree. Most openings will be created to replace the “graying” workforce. This underlines the importance for community colleges to train entry level workforce to meet the challenges of advanced manufacturing and also prepare students for higher-level careers in the sector. The table below presents the top ten occupations in the manufacturing sector with the most job openings by 2014. Data are sorted by openings that include new and replacement jobs.
TOP JOB OPPORTUNITIES IN MANUFACTURING Description*
2011 Jobs 2014 Jobs New Replacement Openings 2011 Median Jobs Jobs (new & repl.) Wages Team assemblers 53,690 50,779 (2,911) 5,478 2,567 $12.20 Industrial production managers 14,206 13,387 (819) 2,167 1,348 $42.99 Welders, cutters, solderers, and brazers 14,466 13,600 (866) 1,772 906 $18.15 Industrial engineers 13,302 13,013 (289) 1,107 818 $39.77 First-line supervisors of production & operating workers 40,355 37,981 (2,374) 3,117 743 $25.51 Machinists 27,284 25,655 (1,629) 2,278 649 $17.93 Computer-controlled machine tool operators 9,977 9,688 (289) 905 616 $16.22 Purchasing agents 12,016 11,592 (424) 961 537 $27.08 Cutting, punching, & press mach. setters, and operators 12,807 11,437 (1,370) 1,902 532 $13.53 Computer hardware engineers 11,297 10,648 (649) 1,152 503 $52.37
Minimum Education Level Moderate-term OTJ training Work experience in a related field Postsecondary vocational award Bachelor's degree Work experience in a related field Long-term OTJ training Moderate-term OTJ training Long-term OTJ training Moderate-term OTJ training Bachelor's degree
*Note: Occupations that do not require any training and/or pay low wages were excluded from this list.
Manufacturing firms in California posted 66,043 job advertisements online in the last four months. Most job openings (over one-third) were advertised by computer/electronics manufacturers, followed by biotechnology and aerospace companies. Although job announcements were dominated by postings for engineers of various specialties, positions requiring community college training and education were also numerous. These postings included: Computer support specialists (1,177 job postings) Inspectors, testers, sorters, etc. (403) Electronics engineering technicians (574) Industrial engineering technicians (390) Maintenance and repair workers (433) Industrial machinery mechanics (287) Machinists (409) Biological Technicians (184)
EMPLOYERS WITH THE MOST JOB POSTINGS, JAN-APR 2012 LOCKHEED MARTIN QUALCOMM APPLE GENENTECH, INC. IBM CISCO SYSTEMS LIFE TECHNOLOGIES INTEL HEWLETT-PACKARD AMGEN
3,406 1,777 1,773 1,398 1,302 1,218 1,150 868 826 822
DATA NOTES AND SOURCES Data and information included in the Sector Profile were compiled from the following public and proprietary sources: California’s Top Manufacturing Clusters, Center of Excellence and Center for Applied Competitive Technologies, 2012; “The Facts About Modern Manufacturing, 8th Edition”, 2009; Morrison, Tom, et al. “Boiling Point? The Skills Gap in U.S. Manufacturing”, 2011; President's Council of Advisors on Science and Technology (PCAST); The Reshore Initiative; CA Employment Development Department; Economic Modeling Specialists, Inc.; InfoGroup, Inc.; The Conference Board - Help Wanted Online.
Sector Profile: Advanced Manufacturing, April 2012
– Economic and Workforce Development through the California Community Colleges –
ADVANCED MANUFACTURING
WHAT IS ADVANCED MANUFACTURING? Some experts define advanced manufacturing as a new way of accomplishing the "how to" of production, where the emphasis is on customization and scalability, while advancing the technologies necessary to improve capabilities. Paul Fowler of the National Council for Advanced Manufacturing (NACFAM) defines advanced manufacturing as an entity that: "Makes extensive use of computer, high precision, and information technologies integrated with a high performance workforce in a production system capable of furnishing a heterogeneous mix of products in small or large volumes with both the efficiency of mass production and the flexibility of custom manufacturing in order to respond rapidly to customer demands." (PCAST) WHY ADVANCED MANUFACTURING? The manufacturing sector is critical to California’s economy. For every one job created in manufacturing, at least two and a half jobs are created to support the sector. Further, manufacturing firms create regional wealth by producing a product that is exported across the state, nation and/or world. This attracts additional funds to the region — building wealth for businesses, individuals and community. Because of this ripple effect, manufacturing firms have a deeper impact on the state of the economy than most other industries.
quick facts about manufacturing
EMPLOYER SAYS “Advanced manufacturing jobs require high level analytical and technical skills… They pay well and provide advancement opportunities. There is a need to invest in both incumbent workers training and re-training of displaced workers for manufacturing craft careers”.
There are about 47,000 manufacturing businesses in California - Rod Hoover, HR Manager, Manufacturing sector accounts for 1.4 million jobs in California, which makes up 7% of the California Steel Industries, Inc. state’s employment across all sectors. The sector is showing signs of economic improvement; it added over 15,400 jobs from 2010-2011. The growth has been led by firms engaged in computer and electronic product manufacturing, metal product manufacturing, and machinery manufacturing. Total revenue generated by manufacturing sector in 2010 was $424 billion. Average 2011 sector earnings per worker were $90,935, which is 54% more than an average across all sectors in California WHAT IS DRIVING GROWTH? challenges Employers report that California’s regulatory climate is difficult, expensive and time consuming to navigate, such as conducting environmental impact studies or obtaining permits. When competing with other low-cost economies, California manufacturing firms have: -
higher health care expenditures, higher salaries and other benefits, higher environmental compliance costs, higher corporate tax rates…
U.S. high school students lag behind in math and science based on Program for International Student Assessment test scores. U.S. manufacturers report a shortage of skilled production workers (machinists, operators, etc.) which hinders their ability to expand operations or improve productivity.
opportunities Outsourcing costs are often underestimated. The sticker price provided by out-of-the-county manufacturing firms does not include costs associated with national policy issues, changes in currency exchange rates, trade secret thefts, supply chain disruptions, etc. Benefits to working local include: -
improved quality and consistency of inputs; ability to create just-in-time operations; and reduction of intellectual property theft issues.
As this viewpoint gains popularity, it will shift production back to the United States, creating jobs and wealth in the process. As firms now expect employees to apply scientific and technical principles to structures and processes, many manufacturing jobs require postsecondary education, skills certification, and/or credentials.
Centers of Excellence
www.coeccc.net
WHAT INDUSTRY CLUSTERS ARE PROJECTED TO GROW? Manufacturing sector in California accounts for over 1.4 million jobs. The largest manufacturing clusters by number of jobs are Computer/Electronics, Food Processing, Aerospace, Biotechnology, Building Materials, and Fashion/Clothing. Due the recent economic recession manufacturing firms across all industry clusters had to cut employment, except for biotechnology and food processing that added new jobs, although in small numbers. Last year was a dynamic year for the manufacturing sector. Most manufacturing clusters in California gained anywhere from 200 to 8,000 jobs. The computers/electronics cluster added the most jobs, with a growth rate of 3% for the year, followed by biotechnology (1%) and aerospace (1%). If the uptick in employment continues, this data may serve as an early indicator of optimism for future growth in the sector. JOBS BY TOP MANUFACTURING CLUSTERS, 2006-2011 267,261
Computers/Electronics
240,466
Number of Jobs
232,430 Food Processing
202,052
203,286
201,485
Aerospace
191,119 167,895
181,170 176,134
178,756
Biotech
174,004
143,798
Building Materials Fashion/Clothing
111,989
2006
2007
2008
2009
97,468
97,692
91,042
91,267
2010
2011
The graph below demonstrates sector “winners” and “losers” by the number of jobs gained or lost in the one year period, 2010-2011. Clusters showing signs of recovery and growth are computer manufacturing, machinery, biotechnology, aerospace and others. Among the industries that are still cutting jobs are transportation manufacturing, printing, furniture, and petroleum. RECENT CHANGE IN EMPLOYMENT BY CLUSTER, 2010-2011 Computers
Industry Cluster
Machinery Biotech Aerospace Metals Food Mfg. Plastic Products Paper Products Dental Equip. Fashion Building Materials Chemical Household Products Petroleum Furniture Printing Transportation
(3,000)
(1,500)
Recent Change in Employment (2010-2011) 0
1,500
3,000
4,500
6,000
7,500
9,000
Jobs Gained/Lost
Sector Profile: Advanced Manufacturing, April 2012
– Economic and Workforce Development through the California Community Colleges –
Centers of Excellence
www.coeccc.net
WHAT CLUSTERS ARE DRIVING ECONOMIC ACTIVITY? The manufacturing sector generated nearly $424 billion in revenue in 2010. Food manufacturing generated the most revenue ($90 billion), followed by computers/electronics ($50.6 billion), biotech ($42.5 billion), and aerospace ($41.9 billion). Sales in the manufacturing sector have a significant impact on the economy. Not only does revenue generated in the clusters contribute to the state through sales taxes, corporate taxes, etc., it also generates a higher level of activity among firms in the supply chain than other sectors. This equates to more employment and state tax revenue as manufacturing clusters grow and prosper.
2010 REVENUE BY MANUFACTURING CLUSTER
Metals $19.6 B
Building Materials $28.1 B Machinery $31.8 B
Furniture $8.2 B Household Products $7.2 B
Dental $1.8 B Transportation $17.5 B
Food Processing $90 Billion Aerospace $41.9 B
Chemical $9.3 B
Fashion $19.4 B
WHERE ARE THE “HOT SPOTS”? Printing Computers/ Biotech Los Angeles/Orange region is home to about $13.1 B Electronics $42.5 B 28,800 firms, roughly 60% of all manufacturing $50.6 B establishments in the state. Thus, it accounts for the most sector jobs and revenue as well. Other regions Petroleum Paper with significant manufacturing sector employment $15.4 B $15.2 B include Silicon Valley, East Bay, San Diego, Central, and Inland Empire. However, the cluster composition differs from region to region. For example, while computer/electronics drive growth in Silicon Valley, the biotechnology cluster is critical for San Diego/Imperial, and food manufacturing leads the sector in Central Valley. MANUFACTURING EMPLOYMENT & REVENUE BY REGION
Plastics $12.4 B
LOCATION OF MANUFACTURING FIRMS 2011 Region Employment Los Angeles/Orange 617,000 Silicon Valley 171,000 East Bay 123,000 San Diego & Imperial 112,000 Central 107,000 Inland Empire 92,000 San Francisco 58,000 South Central 58,000 Greater Sacramento 52,000 North Bay 47,000
Sector Profile: Advanced Manufacturing, April 2012
– Economic and Workforce Development through the California Community Colleges –
Centers of Excellence
www.coeccc.net
HOW MUCH DOES IT PAY? Manufacturing represents the fourth top paying sector in California, only behind utilities, information, and management of companies industries. With the annual sector earnings per worker at $90,935, manufacturing pays 54% higher wages than the average across all other sectors in the state. Earnings in the manufacturing sector vary significantly by cluster. The highest average wages are offered to workers in petroleum ($283K), computer/electronics ($153K), biotechnology ($115K), aerospace ($102K), and machinery ($92K). Clusters that pay lower wages include fashion/clothing, printing, furniture, and household products. TOP 10 SECTORS IN CALIFORNIA BY AVERAGE EARNINGS, 2011 Utilities Information Management of Companies
Manufacturing Finance & Insurance Prof., Scientific, & Tech Serv. Mining, and Oil & Gas Government Wholesale Trade Construction California Average $0
$20,000
$40,000
$60,000
$80,000
$100,000
$120,000
$140,000
$160,000
WHAT JOBS ARE IN DEMAND? Jobs that are projected to be in high demand in the next three years represent a mix of occupations requiring some level of vocational training, work experience, and Bachelor’s degree. Most openings will be created to replace the “graying” workforce. This underlines the importance for community colleges to train entry level workforce to meet the challenges of advanced manufacturing and also prepare students for higher-level careers in the sector. The table below presents the top ten occupations in the manufacturing sector with the most job openings by 2014. Data are sorted by openings that include new and replacement jobs.
TOP JOB OPPORTUNITIES IN MANUFACTURING Description*
2011 Jobs 2014 Jobs New Replacement Openings 2011 Median Jobs Jobs (new & repl.) Wages Team assemblers 53,690 50,779 (2,911) 5,478 2,567 $12.20 Industrial production managers 14,206 13,387 (819) 2,167 1,348 $42.99 Welders, cutters, solderers, and brazers 14,466 13,600 (866) 1,772 906 $18.15 Industrial engineers 13,302 13,013 (289) 1,107 818 $39.77 First-line supervisors of production & operating workers 40,355 37,981 (2,374) 3,117 743 $25.51 Machinists 27,284 25,655 (1,629) 2,278 649 $17.93 Computer-controlled machine tool operators 9,977 9,688 (289) 905 616 $16.22 Purchasing agents 12,016 11,592 (424) 961 537 $27.08 Cutting, punching, & press mach. setters, and operators 12,807 11,437 (1,370) 1,902 532 $13.53 Computer hardware engineers 11,297 10,648 (649) 1,152 503 $52.37
Minimum Education Level Moderate-term OTJ training Work experience in a related field Postsecondary vocational award Bachelor's degree Work experience in a related field Long-term OTJ training Moderate-term OTJ training Long-term OTJ training Moderate-term OTJ training Bachelor's degree
*Note: Occupations that do not require any training and/or pay low wages were excluded from this list.
Manufacturing firms in California posted 66,043 job advertisements online in the last four months. Most job openings (over one-third) were advertised by computer/electronics manufacturers, followed by biotechnology and aerospace companies. Although job announcements were dominated by postings for engineers of various specialties, positions requiring community college training and education were also numerous. These postings included: Computer support specialists (1,177 job postings) Inspectors, testers, sorters, etc. (403) Electronics engineering technicians (574) Industrial engineering technicians (390) Maintenance and repair workers (433) Industrial machinery mechanics (287) Machinists (409) Biological Technicians (184)
EMPLOYERS WITH THE MOST JOB POSTINGS, JAN-APR 2012 LOCKHEED MARTIN QUALCOMM APPLE GENENTECH, INC. IBM CISCO SYSTEMS LIFE TECHNOLOGIES INTEL HEWLETT-PACKARD AMGEN
3,406 1,777 1,773 1,398 1,302 1,218 1,150 868 826 822
DATA NOTES AND SOURCES Data and information included in the Sector Profile were compiled from the following public and proprietary sources: California’s Top Manufacturing Clusters, Center of Excellence and Center for Applied Competitive Technologies, 2012; “The Facts About Modern Manufacturing, 8th Edition”, 2009; Morrison, Tom, et al. “Boiling Point? The Skills Gap in U.S. Manufacturing”, 2011; President's Council of Advisors on Science and Technology (PCAST); The Reshore Initiative; CA Employment Development Department; Economic Modeling Specialists, Inc.; InfoGroup, Inc.; The Conference Board - Help Wanted Online.
Sector Profile: Advanced Manufacturing, April 2012
– Economic and Workforce Development through the California Community Colleges –
