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Why a Skills Gap Is Unlikely to Constrain a U.S. Manufacturing Resurgence

November 07, 2012 by Harold L. Sirkin, Michael Zinser, and Justin Rose
November 07, 2012

Anyone who has followed our research over the past two years knows that The Boston Consulting Group is bullish about the future of American manufacturing. As wages and other costs rise in China, we expect more U.S. companies to repatriate production— from China and elsewhere—of everything from machinery to furniture. Meanwhile, we see more companies in Europe and Japan taking advantage of lower costs in the U.S. by announcing plans to use the country as a manufacturing base for export to the rest of the world. We have estimated that these trends could help create 2.5 million to 5 million U.S. jobs by the end of the decade.

But even if economic factors are swinging in favor of the U.S., will the manufacturing sector be able to absorb so much work? One concern cited by skeptics is a deficit of skilled workers. Years of relentless outsourcing and offshoring have so decimated U.S. manufacturing, the argument goes, that the once abundant pool of U.S. welders, engineers, machine operators, engineers, and factory managers has moved on to other occupations. And the U.S. education system is failing to train enough new skilled workers to replace them.

So is the U.S. really facing a manufacturing skills crunch? That likely depends on your perspective and on whether you take a short-term or a long-term view.