Staying Power I
The research for the original Staying Power Report was completed in November 2007.
The report suggested that after decades of decline in employment and a shrinking share of state output, manufacturing in Massachusetts was gaining strength and was on the verge of an exciting economic renaissance
Great Recession
• But only four weeks after the research for the report was completed, America slipped into recession
• By July 2008 when Staying Power was released by The Boston Foundation, the economy was shrinking and unemployment was rising rapidly
• Led by the auto industry, manufacturing was in free fall
Awful Timing!
• Our forecast of a manufacturing renaissance very soon looked way too sanguine … and in the months to come as the sector’s employment plummeted looked like the ravings of a cockeyed optimist
• We considered the advice of Emily Litella
Staying Power II A New Assessment
• In the Spring of this year … five years after the research began for the first manufacturing report, we began a follow-up study supported by the Massachusetts Technology Collaborative, the Greater Boston Manufacturing Partnership, RBS Citizens, and The Boston Foundation
• It would involve a careful consideration of what had happened in Massachusetts manufacturing since 2007
– Review of existing data on employment, output, and productivity
– A new survey of nearly 700 manufacturers in the Commonwealth
– Face-to-face interviews with nearly 60 manufacturing CEOs and owner-managers
Here is What We Found
Massachusetts Manufacturing Employment (in thousands) January 2007–December
2009
Source: U.S. Bureau of Labor Statistics
Jan-07
Feb-0
7
Mar
-07
Apr-0
7
May
-07
Jun-07
Jul-0
7
Aug-0
7
Sep-0
7
Oct
-07
Nov
-07
Dec-0
7
Jan-08
Feb-0
8
Mar
-08
Apr-0
8
May
-08
Jun-08
Jul-0
8
Aug-0
8
Sep-0
8
Oct
-08
Nov
-08
Dec-0
8
Jan-09
Feb-0
9
Mar
-09
Apr-0
9
May
-09
Jun-09
Jul-0
9
Aug-0
9
Sep-0
9
Oct
-09
Nov
-09
Dec-0
9220
230
240
250
260
270
280
290
300
310
298.2
291.6289.2
252.7
-36,500 jobs
Massachusetts Manufacturing Employment (in thousands, seasonally adjusted)
January 2008-June 2012
Source: U.S. Bureau of Labor Statistics
Jan-08
Mar
-08
May
-08
Jul-0
8
Sep-0
8
Nov
-08
Jan-09
Mar
-09
May
-09
Jul-0
9
Sep-0
9
Nov
-09
Jan-10
Mar
-10
May
-10
Jul-1
0
Sep-1
0
Nov
-10
Jan-11
Mar
-11
May
-11
Jul-1
1
Sep-1
1
Nov
-11
Jan-12
Mar
-12
May
-12
220
230
240
250
260
270
280
290
300
290.8
252.7250.4
Stable employment since November 2009 … despite Great Recession
Annual Rate of Change in Massachusetts Manufacturing Employment (1943 – June
2012)
Source: U.S. Bureau of Labor Statistics, State and Local Employment Series (adjusted for change from SIC to NAICS Industry Code definitions)
1943-1947 1947-1970 1970-1984 1984-2000 2000-2006 2006-2009 2009-2012 (June)
-6.0%
-5.0%
-4.0%
-3.0%
-2.0%
-1.0%
0.0%
1.0%
-3.7%
-0.5%
0.2%
-2.7%
-4.9%
-4.2%
-0.3%
Massachusetts Employment by Sector (in thousands) June 2012
Source: Massachusetts Executive Officer of Labor and Workforce Development, Current Employment Statistics (CES 790 Series), July 2012.
Real Estate and Rental & Leasing
Arts, Entertainment, and Recreation
Federal Government
Management of Companies and Enterprises
Transportation, Warehousing, & Utilities
Information Services
Construction
Other Services
State Government
Wholesale Trade
Education Services
Finance & Insurance
Administration & Support Services
Manufacturing
Local Government
Accommodation and Food Services
Professional, Scientific and Technical Servicess
Retail Trade
Health Care & Social Assistance
0 100 200 300 400 500 600
38.2
42.6
46.7
58.4
85.9
85.9
102.2
121.4
123.5
125.1
158.2
165.8
172.1
250.4
260.4
267.6
269.3
350.6
514.9
Change in the Number of Massachusetts Manufacturing Establishments (2002-2011)
Source: Massachusetts Department of Labor and Workforce Development, ES-202 Employment and Wage Statistics
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011-600
-500
-400
-300
-200
-100
0
100
-326
-188 -197
-524
-267
-169-150
-244
-81
43
Top Ten Manufacturing Industries in Massachusetts (2010)
4-Digit Industry (2010) Employees
Navigation, measuring, medical, and control instruments 26,139
Semiconductor and other electronic components 17,022
Printing and related support activities 12.532
Computer and peripheral equipment 12,253
Aerospace product and parts 11,978
Plastics products 11,309
Medical equipment and supplies 10,759
Machine shops, turned product and screw, nut & bolt 9,957
Bakeries and tortilla 9,356
Pharmaceutical and medicine 9,136
Source: Massachusetts Department of Labor and Workforce Development, ES-202 Employment and Wage Statistics
Manufacturing Share of Private Industry Output (% of GSP) (1997-
2011)
Source: U.S. Bureau of Economic Analysis
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 20110.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
16.0%15.0%
14.5%14.1% 14.2%
12.1% 12.1% 12.2%
11.3% 11.1% 11.2% 11.1% 10.8% 10.8%
12.0% 12.2%
Productivity in MassachusettsAll Industries vs. Manufacturing
Source: U.S. Bureau of Economic Analysis (Updated June 5, 2012 with revised estimates for 1997-2010) (Gross State Product (GSP) is in $millions of chained (real) 2005 dollars)
1997 1998 2000 2004 2007 2011$0
$20,000
$40,000
$60,000
$80,000
$100,000
$120,000
$140,000
$160,000
$180,000
$200,000
$83,839 $86,058 $94,096
$104,936 $107,025 $114,568
$48,666 $53,042
$72,589
$101,141
$127,739
$178,625
GSP/Worker – Private Sector GSP/Worker - Manufacturing
Productivity in MassachusettsAll Industries vs. Manufacturing
Productivity1997-2007Annual GrowthRate
2007-2011Annual GrowthRate
GSP/Worker – Private Sector +2.3% +1.7%
GSP/Worker - Manufacturing +9.7% +8.7%
Source: U.S. Bureau of Economic Analysis (Updated June 5, 2012 with revised estimates for 1997-2010) (Gross State Product (GSP) is in $millions of chained (real) 2005 dollars)
Shares of Manufacturing Workforce MA vs. U.S.Managerial Occupations
MA US
21.4% 16.0%
Engineering & Science Occupations
MA US
15.4% 11.1%
"Blue-Collar"
MA US
41.6% 54.8%
Source: American Community Survey
Educational Attainment Manufacturing Full-Year Workers Massachusetts vs. U.S. (2010)
PhD
Professional Degree
Masters
BA
Assoc Degree
Some College, No degree
HS Grad
Less Than HS
0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0%
2.4%
0.9%
11.3%
24.0%
6.9%
15.9%
30.0%
8.5%
1.0%
0.5%
6.6%
18.2%
8.0%
21.1%
33.2%
11.4%
2010 U.S.
2010 MA
Source: American Community Survey
61.3% Require LessThan College B.A.
Average Annual Salaries for Massachusetts Industry Sectors
(2010)
Source: US Bureau of Labor Statistics, Quarterly Census of Employment and Wages, Employment and Wages, Annual Wages, 2010, table 8 & 10, http://www.bls.gov/cew/cewbultn10.htm#Tables
Finance
Professional Technical Services
Information
MANUFACTURING
Real Estate
Government
Healthcare
Agriculture, Forestry, Fishing
Arts
Other Services
$0 $20,000 $40,000 $60,000 $80,000 $100,000 $120,000
$115,403$104,257
$101,201
$104,003
$92,110
$79,268
$75,202
$62,133
$60,116$57,673
$56,277$56,263
$51,570
$41,648
$47,389
$38,466
$34,519
$27,772
$27,529
$19,338
Share of Massachusetts Payroll (2011:3rd Quarter)
Top 4 Sectors
Employment Sector
Total Employment
Percent of Massachusetts Workforce
Percent of Massachusetts Total Payroll
Health Care 532,934 16.6% 15.3%
Retail Trade 344,751 10.8% 5.3%
Education 282,818 8.8% 8.7%
Manufacturing 254,300 8.0% 10.1%
Source: Massachusetts Office of Labor and Workforce Development, Employment and Wages http://lmi2.detma.org/lmi/lmi_es_asp#IND_LOCATION
Massachusetts Manufacturing A Diverse Workforce
2005 2010
Source: 2010 American Community Survey
[i] Hispanic includes Hispanics that are foreign-born and native. The same with Asians and African-Americans.
EthnicityShare of Non-Manufacturing Workforce
Share of Manufacturing Workforce
Share of Non-Manufacturing Workforce
Share of Manufacturing Workforce
Foreign Born 15.9% 24.4% 18.3% 26.0%
Hispanic 5.8% 8.3% 7.3% 9.3%
Asian 4.1% 6.5% 5.0% 8.9%
African-American
4.9% 3.8% 5.8% 3.4%
Proportion of Workforce Age 45 or Older
2000 2006 20100.00%
10.00%
20.00%
30.00%
40.00%
50.00%
60.00%
40.5%
49.6%
53.9%
36.1%
41.4%
44.6%
Manufacturing All other industries
Source: American Community Survey, Public Use Files, 2006, 2010, Tabulations by Center for Labor Market Studies and Dukakis Center for Urban and Regional Policy, Northeastern University
Projected Massachusetts Manufacturing Employment (in
thousands) (1996-2018)
Source: Calculations based on Massachusetts Department of Labor
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 20180
50
100
150
200
250
300
350
400
450
Projected-12,000 jobs
-160,000 jobs
The 2012 Staying Power Massachusetts Manufacturing Survey
The Continuing Evolution of Massachusetts Manufacturing
• Structure of Manufacturing in Massachusetts
• Manufacturing Labor Force• Source of Capital• Changes in Economic Environment
for Massachusetts Manufacturers
Manufacturing Firms by Size of Employment (2011)
Source: Info USA Database; Dukakis Center Manufacturing Survey, 2011
Size of Firm (Employees)
Share ofManufacturing Firms
Share of Total Manufacturing Workforce
1-4 36.1% 2.7%
5-19 35.7% 10.3%
20-99 21.4% 25.6%
100-499 6.1% 34.3%
500+ 0.9% 27.1%
Ownership Structure of Massachusetts Manufacturers
(2012)
Source: Dukakis Center Manufacturing Survey, 2012
Private Family Owner-Operated
Private Investor-owned Publicly Owned Stock Corporation
Other0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
72.2%
14.1%
6.2% 7.4%
Real Wage Increases for Production Workers in Massachusetts Manufacturing Firms (2007
– 2012)
Source: Dukakis Center Manufacturing Surveys, 2007 and 2012Real Wages adjusted for U.S. Bureau of Labor Statistics, Consumer Price Index for All Urban Consumers 1st Half 2007 (205.7) vs. 1st Half 2012 (228.85) (1982-1984 = 100.0)
Employee Level
Real Wages (2012$)
Difference
% Difference
2007 2012
Unskilled Production Workers
$13.51 $13.95 $0.44 3.3%
Skilled Production Workers
$22.05 $25.83 $3.78 17.1%
Sources of Capital
Source: Dukakis Center Manufacturing Survey, 2012
Commercial B
anks
Personal F
unds
Leasin
g Companies to obtain equipment
Small Busin
ess Lo
an (SBA)
Private In
vestment/E
quity
Issuers
of Mezza
nine/Subordinated D
ebt0%
10%
20%
30%
40%
50%
60%
70%
80%
90%83.3%
77.8%
49.5%
37.1%
26.6%
15.3%
“Very Important” or “Extremely Important” Sources of Capital
Source: Dukakis Center Manufacturing Survey, 2012
Source All 1-19 20-100 101+
Commercial Banks 59.7% 50.7% 73.1% 63.3%
Personal Funds 46.6% 55.2% 42.0% 15.9%
Leasing Companies to obtain equipment
17.7% 19.2% 18.6% 10.5%
Small Business Loan (SBA) 12.3% 14.7% 13.0% 0.0%
Private Investment/Equity 10.1% 7.7% 9.6% 18.2%
Issuers of Mezzanine/Subordinated Debt
3.6% 2.7% 3.0% 7.5%
Likelihood of Changes in Primary Suppliers, Customers, and
CompetitorsField Not Likely
Very + Extremely Likely
Suppliers
More MA Suppliers 39.7% 11.5%
More US Suppliers 20.8% 23.5%
More Global Suppliers 46.3% 16.9%
Customers
More MA Customers 30.0% 22.3%
More US Customers 15.0% 36.4%
More Global Customers 42.1% 27.8%
Competitors
More MA Competitors 50.0% 9.2%
More US Competitors 23.2% 20.7%
More Global Competitors 28.5% 37.2%
Source: Dukakis Center Manufacturing Survey, 2012
“Large Extent” or “Great Extent” Expectations about Customer Demands,
Technology, and Workforce Deployment by Firm Size
Source: Dukakis Center Manufacturing Survey, 2012
Large or Great Extent 1-19 20-100
101+
Increased customer demand for lower prices 38.3%
48.3%
70.5%
Increased customer demand for improved service delivery
34.2%
44.0%
59.0%
Increased customer demand for better product quality 26.2%
40.6%
61.5%
Substantial increase in the use of new technology 21.1%
26.0%
51.3%
Substantial increase in productivity due to improved technology
19.1%
26.3%
42.3%
Shift from local markets to national markets 15.5%
23.8%
28.2%
Shift from national markets to global markets 14.8%
25.7%
42.3%
Shortage of critical materials 8.6% 9.7% 12.9%
Substitution of skilled labor for less skilled labor 5.6% 5.6% 3.8%
Substitution of less skilled labor for skilled labor 4.2% 6.1% 12.8%
Reduction of employment due to improved technology 2.9% 6.6% 6.4%Increased off-shoring of internal operations 2.6% 4.2% 5.2%Increased outsourcing of previous internal operations to other MA firms
2.3% 3.3% 1.3%
Increased outsourcing of previous internal operations to firms in other states 1.9% 1.8% 3.9%
Manufacturing’s Survival in Massachusetts
• Why Massachusetts Manufacturers are staying in the Commonwealth
• Why they might relocate• Innovation Activity• Use of State Assistance• Capital Access in the Future
Reasons for “Staying” in Massachusetts
Reason Very or Extremely Important
Work Ethic of workforce 55.0%Inertia (too hard to relocate) 44.0%Future availability of appropriately skilled labor 43.2%Current availability of appropriately skilled labor 42.4%Current proximity to customers 42.0%Future proximity to customers 37.4%Quality of life (e.g. public schools, recreation, and cultural institutions)
33.3%
Access to transportation for shipping/commuting 31.7%
Monetary or in-kind incentives from state or local governments 30.9%
Opportunity for physical expansion 28.1%Availability of reasonably priced land for expansion 27.9%Current proximity to key suppliers 24.9%Future proximity to key suppliers 24.1%Strategic partnerships with community colleges and vocational education programs
16.8%
Proximity to universities and colleges 12.6%Massachusetts weather and climate 11.8%Critical mass of similar firms in region 11.3%Proximity to European markets 2.6%Source: Dukakis Center Manufacturing Survey, 2012
Reasons for Possibly “Leaving” Massachusetts
Reason Very or Extremely Important
Health care costs 84.2%Cost of worker's compensation 75.5%Taxes and Fees 74.6%Cost of unemployment insurance 73.1%Future energy costs 72.0%Environmental regulations 68.9%Current energy costs 68.8%Labor costs 68.1%Trade Unions 67.7%Time to obtain permits and licenses 60.9%
Future availability of appropriately skilled labor 57.8%
Current availability of appropriately skilled labor 54.2%Cost-of-living 54.2%Cost of construction 47.1%Availability of reasonably priced land for expansion 46.1%
Opportunity for physical expansion 43.4%
Future proximity to key suppliers 38.7%
Future proximity to customers 37.5%
Current proximity to key suppliers 33.3%
Massachusetts weather and climate 28.0%
Source: Dukakis Center Manufacturing Survey, 2012
Innovative Activity of Massachusetts Manufacturers and
“Innovation Score”Initiative Innovation Points
Invested in new manufacturing equipment 10
Expanded total workforce 5Invested more in product research and development
10
Expanded sales and marketing workforce 5
Opened sales office abroad 5
Invested in education and training 10
Secured at least one new patent 10
Entered into a formal partnership 10
Hired consultant 5
Implemented performance improvement program 5
Source: Dukakis Manufacturing Study Staff
Distribution of Innovation Scores Across Massachusetts Manufacturing Firms
Source: Dukakis Center Manufacturing Survey, 2012
Very Low22%
Low18%
Average27%
High21%
Very High13%
Distribution of Innovation Scores across Massachusetts Manufacturing
by Firm Size
Very Low Low Average High Very High0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
40.0%
45.0%
34.9%
21.1%
25.5%
12.8%
5.7%
8.8%
14.6%
32.2%
29.3%
15.1%
2.9%4.3%
20.0%
32.9%
40.0%
1-19 20-100 101+
Source: Dukakis Center Manufacturing Survey, 2012
Innovation and Expected Future Production Levels
Innovation Level
Production at
increased levels
Production at
current levels
Production at reduced levels
Cessation of production in MA
Very Low 29.1% 48.9% 17.0% 5.0%
Low 65.1% 28.4% 5.5% 0.9%
Average 69.8% 21.3% 7.1% 1.8%
High 88.0% 6.8% 3.8% 1.5%
Very High 85.0% 10.0% 2.5% 2.5%
Source: Dukakis Center Manufacturing Survey, 2012
Expected Massachusetts Employment Growth by Innovation
Score
Innovation Level
Expansion of Massachusetts Employment by No
Change
Reduction of Massachusetts Employment by
>25% 11-25% 1-10% 1-10% 11-25% >25%
Very Low 2.2% 8.6% 25.9% 51.8% 5.8% 0.7% 5.0%
Low 8.3% 15.6% 44.0% 26.6% 3.7% 0.0% 1.8%
Average 11.8% 26.0% 37.9% 15.4% 4.1% 3.6% 1.2%
High 18.8% 33.1% 36.8% 4.5% 4.5% 0.0% 2.3%
Very High 30.0% 31.3% 26.3% 11.3% 1.3% 0.0% 0.0%
Source: Dukakis Center Manufacturing Survey, 2012
State Incentive and Grant Programs used by Massachusetts
Manufacturers
Source: Dukakis Center Manufacturing Survey, 2012
Workforce Training Grants
Investment Tax Credits
R&D Tax Credits
Low Interest Loans
Tax Increment Financing
Loan Guarantees
Equity Financing
Site Finder Assistance
0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0%
25.3%
25.2%
12.5%
9.5%
6.3%
5.1%
2.0%
1.3%
25.7%
26.7%
18.1%
13.3%
7.7%
6.1%
2.4%
1.0%
20122007
State Incentive and Grant Programs used by Massachusetts Manufacturers
by Firm Size
Source: Dukakis Center Manufacturing Survey, 2012
Program 1-19 20-100 101+
Workforce Training Grants 10.2%` 37.7% 66.7%
Investment Tax Credits 14.6% 36.5% 53.1%
R&D Tax Credits 7.0% 26.9% 51.6%
Low Interest Loans 12.2% 15.8% 11.5%
Tax Increment Financing 3.3% 11.2% 22.2%
Loan Guarantees 3.3% 11.0% 3.3%
Equity Financing 1.3% 4.6% 1.7%
Site Finder Assistance 0.7% 0.5% 1.6%
Access to CapitalOver the last five years, to what extent has access to capital ever been an impediment to growth?
Not at AllTo Some Extent
To a Fair Extent
To a Large Extent
To a Great Extent
50.1% 20.0% 12.4% 9.4% 8.1%
Access to Capital has been an Impediment to Growth to a Large or Great Extent
All Firms 1-19 20-100 101+
17.5% 21.0% 13.5% 11.7%
Source: Dukakis Center Manufacturing Survey, 2012
Access to Capital by Region within Massachusetts
Over the last five years, to what extent has access to capital ever been an impediment to growth?
Extent Inside 495
Central MA
Northeastern MA
Southeastern MA
Western MA
Not at All 46.9% 56.0% 63.0% 51.1% 49.5%
To Some Extent
20.7% 21.0% 18.5% 18.2% 19.6%
To a Fair Extent
13.6% 7.0% 7.4% 14.8% 14.0%
To a Large Extent
10.2% 6.0% 11.1% 10.2% 9.3%
To a Great Extent 8.6% 10.0% 0.0% 5.7% 7.5%
Source: Dukakis Center Manufacturing Survey, 2012
Ability to Finance Future Growth
To what extent are you concerned about your company's ability to finance future growth?
Not Concerned
Somewhat Concerned
Fairly Concerned
Very Concerned
Extremely concerned
32.7% 29.2% 15.7% 12.2% 10.2%
Source: Dukakis Center Manufacturing Survey, 2012
A Manufacturing Workforce for the Future
• Difficulty in Recruiting Labor• Recruiting Methods• Training Institutions
Difficulty in Recruiting Labor for Massachusetts Manufacturers
(2012)
Source: Dukakis Center Manufacturing Survey, 2012
Employment Type Not DifficultVery or
Extremely Difficult
Skilled craftsmen 18.4% 43.1%
R & D Staff 36.7% 24.1%
Executive management 40.9% 15.6%
Middle management 40.3% 11.0%
Entry level employees 49.9% 8.0%
Sources Used for Recruiting and Hiring Shop Floor Employees
Source Used Very or Extremely Successful
Employee Referrals 83.2% 32.6%
Temporary Employment Agencies 55.3% 12.4%
Vocational High Schools/High Schools 50.2% 10.2%
Internet Advertisements 49.6% 9.1%Internet Job Search Sites (e.g. Monster.com) 46.0% 7.1%
Newspaper Advertisements 59.2% 7.1%
Private Employment or Recruiting Agencies 36.8% 6.9%
Industry Networking Events 24.4% 3.2%
One Stop Career Centers 15.9% 1.8%
Career and Technology Fairs 16.6% 1.4%
Community Colleges 21.1% 1.2%
Source: Dukakis Center Manufacturing Survey, 2012
Importance of Institutions in Preparing the Manufacturing Job
Floor Workforce
Source: Dukakis Center Manufacturing Survey, 2012
Institution Not Important Very or Extremely Important
Vocational/Technical High Schools
24.5% 38.1%
Comprehensive High Schools 35.5% 21.7%
Four Year Colleges/Universities
52.1% 17.5%
Community Colleges 46.5% 13.4%
Private Training Companies 70.8% 5.7%
The Military 70.2% 5.6%
Workforce Investment Board 87.2% 3.1%
Types of Training Used for Shop Floor Workers and Degree of Success
Source: Dukakis Center Manufacturing Survey, 2012
Training Type Used Very or Extremely Successful
On-the-job Training 81.4% 69.7%
Internal Classroom Training by Staff or Skilled Employees
50.3% 41.9%
Technical/Vocational Schools 48.2% 32.2%
Use of External Consultants/Trainers 42.3% 26.2%
Web-based Training 31.0% 15.5%
Community Colleges 30.2% 17.5%
Universities 25.8% 26.0%MassMEP/ GBMP* 18.0% 29.4%
The Future of Manufacturing in Massachusetts
• Investments in Manufacturing• Projected Production Levels• Projected Employment Levels• Mergers & Acquisitions• Geographic Expansion• Exports & Export Potential
Initiatives Pursued over Past 5 Years to Grow Manufacturing Operations in
Massachusetts
Source: Dukakis Center Manufacturing Survey, 2012
Initiative All Firms
1-19
20-100
101+
Invested in new manufacturing equipment and/or manufacturing process software
82.6%73.7%
91.2% 98.6%
Invested in education and training for manufacturing workforce
49.5%34.5%
60.5% 87.1%
Expanded manufacturing sales and marketing workforce
47.2%31.5%
65.0% 70.0%
Invested more in product research and development than in the previous five years
45.1%34.0%
55.1% 72.9%
Implemented or strengthened a performance improvement program
41.6% 25.7% 57.6% 69.6%
Expand overall square footage of existing manufacturing floor space
36.7% 27.3% 43.3% 59.4%
Developed a succession plan for ownership 29.4% 22.0% 43.2% 21.7%
Developed a succession plan for senior executives 25.4% 14.6% 36.4% 52.2%
Hired consultants to help grow business 24.8% 17.6% 29.6% 38.6%
Entered into a formal partnership and/or joint venture with another manufacturing firm
17.8% 13.2% 21.8% 30.0%
Secured at least one new patent for a new product 16.6% 10.8% 16.6% 47.1%
Opened a new manufacturing location in Massachusetts 8.8% 6.7% 9.5% 20.0%
Opened a sales office abroad 8.6% 2.7% 10.9% 31.4%
Expected Production Levels of Massachusetts Manufacturing Firms over the Next Five Years (2012
- 2017)
Source: Dukakis Center Manufacturing Survey, 2012
Continued production at increased lev-
els; 65.4%
Continued produc-tion at current levels; 24.4%
Continued produc-tion but at reduced
levels; 7.7%
Cessation of production in Massachusetts; 2.5%
5 Year Employment Projections of Massachusetts Manufacturing Firms (2012 –
2017)
Source: Dukakis Center Manufacturing Survey, 2012
Expansion of Massa-chusetts Employment
by >25%13%
Expansion of Massachu-setts Employment by 11-
25%22%
Expansion of Massachusetts Employment by 1-10%
35%
Maintenance of Current Employment Levels
23%
Reduction of Massachusetts Employment by 1-10%
4%
Reduction of Massachusetts Employment by 11-25%
1%
Reduction of Massachusetts Employment by >25%
2%
Business Expansion Plans of Massachusetts Manufacturers by Firm Size (2012 – 2017)
Source: Dukakis Center Manufacturing Survey, 2012
Expansion Location All 1-19 20-100 101+
Massachusetts 66.7% 67.7% 67.6% 55.6%
New England (Excluding MA)
26.5% 23.6% 28.6% 23.4%
Other states in the U.S. 31.3% 22.5% 38.2% 51.0%
Outside the U.S. 17.3% 5.7% 20.2% 49.0%
No expansion plans 47.9% 55.4% 38.5% 35.6%
What Could Help Manufacturing’s Success?
• Reducing Barriers to Growth• Closer Cooperation with Vocational
Schools and Community Colleges• Promotion of Manufacturing
Percent reporting action would be important to sustaining or expanding their Massachusetts
operations (2007)
Source: Dukakis Center Manufacturing Survey, 2007
Expand Cultural & Recreational Activities
Increase Availibility of Water & Sewer
Provide Additional State Funding for Brownfield Remediation
Improve Highways and Roads
Identify Industrial & Related Activities Networks
Weaken the Influence of Trade Unions
Expand Supply of Workforce Housing
Promote Exports
Reduce Crime Rate in Local Communities
Expand & Improve Public Higher Education
Improve State Workforce Training Programs
Promote Emerging Technologies
Connect Community Colleges to Manufacturing
Improve K-12 Education
Provide Access to Capital
Streamline State & Local Regulations
Improve Linkage with Vocational Schools
Encourage More Business-Friendly Local Government
Reduce Property Taxes
Reduce State Income & Sales Taxes
Encourage More Business-Friendly State Government
Reduce Cost of Unemployment Compensation
Ensure Availability of Lower Cost Energy
Reduce Cost of Workers' Compensation
Reduce Health Care Costs
0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0% 90.0% 100.0%
11.0%13.4%
21.0%21.3%
27.2%28.4%28.9%
31.8%31.8%32.5%33.0%
37.3%42.0%42.0%42.6%
47.4%48.9%
62.3%62.7%
67.8%72.2%
74.4%74.5%
77.6%92.3%
Recommendations for Promoting Manufacturing in Massachusetts
Source: Dukakis Center Manufacturing Survey, 2012
RecommendationVery Important
or Extremely Important
Working with School or Community College Instructors to Incorporate Industry Standards into Curriculum
30.3%
Creating a certificate in manufacturing technology 27.5%
Serving as mentors/advisors at selected vocational schools or community colleges
27.4%
Speaking to Parent Organizations/Student Groups About Careers in Manufacturing
24.7%
Contributing Machinery, Tools, or Other Materials to Schools
21.0%
Exhibiting at Education, Career, and Technology Fairs 19.7%
Instituting company-sponsored educational scholarships 14.2%
Hiring vocational/community college teachers to train your employees
11.6%
Company Assessment of Broad-Based Initiatives to Strengthen Manufacturing in
Massachusetts
Source: Dukakis Center Manufacturing Survey, 2012
InitiativeVery or Extremely
Important
Continued alignment of the vocational and community college curricula with industry needs
42.8%
Programs to increase school, student, and parent awareness of careers in manufacturing
40.5%
State-wide marketing campaign to promote manufacturing industry
33.9%
Expand professional development/continuous improvement programs for existing employees
29.6%
Create an employee applicant referral system 22.5%
Conclusions
• Manufacturing is alive and well in the Commonwealth and has a healthy future
• Closer cooperation between training institutions and manufacturing can fulfill the sector’s need to replace an aging workforce
• Continuing to promote the industry will help secure the Commonwealth’s prosperity for years to come
• No Emily Litella needed here!