Why He Brought Back Manufacturing

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Marketplace.org recently spoke to Matt Turpin, a small electronics manufacturer in Baltimore. The reason for the interview was Turpin’s company Zentech has bucked conventional wisdom and actually relocated manufacturing work from Asia to the US:

“We’ve brought back probably four projects in the past two years,” he said. There are “probably 30 people associated with those projects.”

How’d he do it? First, “the level of automation has increased dramatically,” Turpin said. “What used to take two to three hours to build now can be built in under 10 minutes.”

So if products don’t require much labor, then cheap Chinese labor isn’t that important.

Second, labor in China isn’t so cheap anymore.

Those two factors mean the number of manufacturing jobs leaving the United States now equals the number of jobs coming back, roughly, and it’s been holding constant for the past year or so.

Read more

New 3D Printing Frontier: Footwear?

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Imagine needing a new pair of shoes, only instead of heading to the mall you pick out your customized design online and then use your smartphone to scan your foot’s dimensions and send them to a manufacturer who will then run a made to order pair of sneakers, sized and designed perfectly just for you, off their 3D printer. It sounds a little like the Jetsons, but that’s exactly what a startup is trying to do with an app and 100 printers. It’s called Feetz, and you can read more about it and the woman running it here.

Top 5 STEM Inspiring Movies

The weekend’s just around the corner, so for today’s blog post we thought it would be fun to make a Top 5 list of movies focusing on STEM topics that can inspire interest in the topic in viewers young and old alike. So, in no particular order:

Apollo 13: From director Ron Howard, this dramatization of the failed Apollo 13 lunar mission stars Tom Hanks, Bill Paxton, and Kevin Bacon as the three astronauts on the ill-fated expedition. A love letter to American ingenuity and space exploration, it offers an inspirational tale of what scientists and mathematicians can accomplish.

Jurassic Park: Steven Spielberg’s dinosaur epic still packs a wallop more than 20 years later. The much imitated story about an exclusive theme park where guests can see real living dinosaurs can raise interest in two different STEM fields. All the talk of cloning dinosaurs can inspire an interest in genetics, while the two archaeologist leads have captured many viewers’ imaginations. Laura Dern’s down-to-Earth Dr. Ellie Sattler has already become something of a role model for women in the field.

A Beautiful Mind: Another from director Ron Howard. This biopic of the esteemed mathematician and Nobel laureate John Nash from his college years through his cryptology work for the Pentagon to his recieving the Nobel Prize in Economics, all while suffering from paranoid schizophrenia. This movie deserves praise just for making complex mathematics engrossing for average viewers.

Big Hero 6: It’s hard to think of a better advertisement for robotics than this charming Disney film. Focusing on a team of kid and teen scientists who, along with the lovable healthcare robot Baymax, become superheroes to save their city, this is bound to inspire audiences of all ages.

Temple Grandin: Claire Danes won an Emmy for her portrayal of the world renowned inventor and advocate. Diagnosed with Autism at a young age, the film follows Grandin’s life as she works towards a degree in Animal Science, developing more humane ways of handling livestock, and ultimately becoming an advocate on behalf of the autistic.

NY Fed Report: Business Activity Down

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Business activity decreased in New York State, according to the Federal Reserve Bank of New York’s Empire State Manufacturing Survey for September 2016. The headline general business conditions index held below zero, and was little changed at -2.0. The new orders index fell eight points to -7.5 and the shipments index fell eighteen points to -9.4—developments that pointed to a marked decline in both orders and shipments. The labor market took a beating as well, with both employment levels and the average workweek reported as lower. On the brighter side, indexes for the six-month outlook suggested that firms generally expect conditions to improve in the months ahead. Read the full report.

Could China’s Manufacturing Future be in Doubt?

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For decades now China has loomed over America’s manufacturers, seemingly pulling away jobs, orders, and business with its promises of cheap, productive labor. That might be beginning to change, at least according to an Op-Ed in the Washington Post by Vivek Wadhwa, a Distinguished Fellow and professor at Carnegie Mellon University of Engineering. Wadhwa argues that China’s advantages have been undercut by technological advantages. Robots cost the same in China as they do in America, but China faces a shortage of skilled laborers who are needed to run the new manufacturing technology. This gives the US and Europe an opening to reclaim manufacturing jobs, provided they are able to adapt to the new demands of the industry faster than China.

“China has made this a national priority and is making massive investments. Just one province, Guangdong, committed to spending $150 billion to equip its factories with industrial robots and create two centers dedicated to advanced automation. But no matter how much money it spends, China simply can’t win with next-generation manufacturing. It built its dominance in manufacturing by offering massive subsidies, cheap labor and lax regulations. With technologies such as robotics and 3-D printing, it has no edge.

After all, American robots work as hard as Chinese robots. And they also don’t complain or join labor unions. They all consume the same electricity and do exactly what they are told. It doesn’t make economic sense for American industry to ship raw materials and electronics components across the globe to have Chinese robots assemble them into finished goods that are then shipped back. That manufacturing could be done locally for almost the same cost. And with shipping eliminated, what once took weeks could be done in days and we could reduce pollution at the same time.”

Read the full piece.

Rethinking Introverts

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Could companies be unintentionally undermining some of their most potentially valuable employees? According to this recent article in The Economist, it seems likely. The problem, it argues, is that corporate culture disproportionately favors extroverts by focusing on group work and rewarding outgoing employees with promotion. The article cautions that this is a simplistic one-sided approach that undervalues the many benefits introverted employees bring to a company.

“The recent fashion for hyper-connectedness also reinforces an ancient prejudice against introverts when it comes to promotion. Many companies unconsciously identify leadership skills with extroversion—that is, a willingness to project the ego, press the flesh and prattle on in public. This suggests that Donald Trump is the beau idéal of a great manager. Yet in his book “Good to Great”, Jim Collins, a management guru, suggests that the chief executives who stay longest at the top of their industries tend to be quiet and self-effacing types. They are people who put their companies above their egos and frequently blend into the background.

Many of the most successful founders and chief executives in the technology industry, such as Bill Gates of Microsoft, and Mark Zuckerberg of Facebook, are introverts who might have floundered in the extroverted culture of IBM, with its company songs and strong emphasis on team-bonding. In penalising other people like them, firms are passing over or sidelining potential leaders. At all levels of company hierarchies, that means failing to take full advantage of employees’ abilities.”

Read the rest.

Manufacturing Job Openings Increase in July

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Job openings in the manufacturing sector grew in July for the second month in a row, according to data from the Bureau of Labor Statistics. Postings in the sector jumped from 361,000 in June to 379,000 in July, even as openings remained below April’s all-time high of 397,000. The increase in job openings stemmed from a pickup in activity for durable goods firms (up from 200,000 to 227,000); whereas, postings for nondurable goods entities (down from 160,000 to 152,000) declined for the third straight month.

Net hiring was also encouraging, with positive growth for the second consecutive month following four straight months of net declines. This was true in July despite declines in both hiring (down from 281,000 to 274,000) and separations (down from 264,000 to 258,000). Hiring increased for durable goods firms (up from 161,000 to 167,000), but this was offset by reduced hiring among nondurable goods manufacturers (down from 119,000 to 106,000). At the same time, total separations – which include quits, layoffs and retirements – fell to a 12-month low. Overall, net hiring (or hiring minus separations) equaled 16,000 in July, off slightly from 17,000 in June. Read the full report.

Skill Requirements Increase and Manufacturing Jobs stay Unfilled

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Despite widespread fears and outrage over the decline of factory work in the United States thousands of such jobs are going unfilled across the country. Labor department data shows that the number of open factory jobs has been rising since 2009, and this year reached its highest level in 15 years.

The gulf between public perception and the reality is caused by the fact that the sort of laborers people associate with factory work, and who have seen the greatest losses in the sector in recent decades, are not qualified to do the sort of jobs that are available. The factory work of 2016 is tech driven and requires certain skills that laid off factory workers simply haven’t been trained for. Factory jobs now require college degrees. Read more on the so called “upskilling” and its implications for the economy at the Wall Street Journal.

Proposed Immigration Rule: Entrepreneurs can Stay

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The Department of Homeland Security last week proposed a rule change to America’s immigration laws that would allow foreign born entrepeanurs building new companies in the United States temporary legal entry for up to five years. To qualify an applicant would have to show that they play a central role, and hole a significant ownership stake, in an American company founded in the last three years. The rule change would not require congressional approval and it marks the latest move by the Obama Administartion to expand America’s immigration policies in the face of congressional inaction on the issue. Read more via the NY Times.

2016 Golf Outing

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Our annual Golf Outing was held yesterday, August 29, at the Powelton Club in Newburgh. The weather was excellent and everyone had a wonderful time. Some photographic highlights of the event are below. Thank you to all who participated!

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