Feb 18, 2013

State manufacturing development policies change direction

Every state -- every country, for that matter -- seems to have a plan to bring back manufacturing and manufacturing jobs. Only in the last couple of years have they realized that manufacturing jobs are some of the best, and they should have been nicer to manufacturing
Image courtesy of Gray
instead of writing it off. As I described in my column for ManufacturingPulse this week, there’s a new report on state policies from the National Governors Association (NGA) Policy Academy, Making our Future: What states are doing to encourage growth in manufacturing through innovation, entrepreneurship, and investment, that suggests a change in perception.

Only five years ago, states were trying to rescue and revive manufacturing. The objective was jobs, after years of layoffs and high unemployment. One of their strategies was to go after global companies to keep plants in their state or get new ones built. They got jobs. But not enough to make up for all the manufacturing jobs lost during the recession (and before). It’s a fact that manufacturing doesn’t need as many people as in the past. Government leaders were either not prepared for the fact, or had been using the “jobs” issue to sell something else.

Here's the big change

Today, as reality has set in, new state economic development plans are being built around manufacturing innovation and competitiveness. They are fostering the development of new technologies that change both processes and products. In most state plans, coalitions rule. Policies are designed to do a better job of linking research-intensive universities and manufacturers. They are also designed to bring government into the picture to facilitate connections between companies and research centers, as well as to create conditions necessary for success.

One factor is ensuring a well developed workforce from schools and retraining programs. Jobs are available, but they require more skills and knowledge than ever before.

Companies have long been asking for better access to capital. Now economic development plans are promoting public/private joint ventures and other means of increasing investment in their state’s companies.

Finally, small and medium-sized companies, including startups, will be invited to the table. Few are currently taking advantage of help available from their state government agencies. It’s time to do a better job of showing them how to get support and organize the resources that are now fragmented into many departments and divisions.

What to expect

How excited should we be about this report? Plans and reports like this come out every few years. Since governors like to take credit for them, newly elected governors don’t have a political interest in continuing the programs of their predecessors.

And do these programs get results? We don’t get much information about how effective the plans have been. If you put it into PDCA terms, we get the “P” for planning, and some of the “D” for actual things that get done. We don’t hear about the “C” for checking how things worked out, perhaps because analysis is never done? Reflecting on the outcomes is missing. And any informed adjusting -- the “A” of the plan -- falls away. There are some exceptions, link to 
 but reports (PDF) are very hard to find.

Despite my skepticism about government manufacturing policy, the NGA workshops and research are interesting. Business leaders, especially in manufacturing, should be reading this report -- and others like it -- and investigating what is going on where their facilities are located. Educators and university administrators should take note, and find out where they have opportunities to support manufacturing and revitalize their systems. Politicians and economic development agency administrators should be benchmarking other regional plans and asking whether their own programs could be improved.

The value of lean and continuous improvement to these organizations, especially in the execution part of their policies, does not seem to bubble to the top. When plans refer to new technologies, implementing this new system of management is not recognized as one of them. It’s frustrating for everyone in the lean community to know how much better things could be, how much more likely it would be that plans would bear fruit, simply with a PDCA approach, even without using any other part of lean. Not even the MEPs affect the planning. 

Are there any examples of lean principles penetrating economic development plans? How could we break through?

Copyright @ 2005-2014 by Karen Wilhelm