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Area Development

33rd Annual Survey of Corporate Executives Commentary: New Versus Old Economy: Different Hotspots, Different Strategies

Although manufacturing and technology companies often have divergent needs and cluster in varied geographic locations, both are having trouble finding the workforce they require.

Q1 2019
One challenge in interpreting the survey results is that manufacturing and distribution account for 61 percent of profiled projects but only 10 percent of U.S. employment. Consequently, respondents are most bullish on the South, Midwest, and Southwest. Ask instead which states attract the most venture capital, and California, Massachusetts, and New York become the top destinations. The same bias is evident in international responses. In Asia, for example, respondents indicate that 66 percent of new projects will go to China or Vietnam, whereas the top three Asian destinations for U.S. investment are Singapore, Australia, and Japan.

One reason that site selectors and many economic development officials might be more attuned to manufacturing is that these projects tend to be more geographically mobile, or at least willing to consider far more locations. However, that bias might result in important trends being overlooked. For example, manufacturing and technology clients are beginning to describe workforce requirements using very different terminology. Those from manufacturing still use traditional occupational titles such as “machine operator” or “quality assurance technician,” whereas technology clients increasingly describe workforce requirements in terms of the unique cluster of skills required for each position.

Each would agree with the key survey finding that qualified labor is concern number one; but how they go about defining and filling new positions is beginning to diverge greatly, and this trend is likely to speed up in tandem with the introduction of AI in the workplace.

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