Private, public and civic sectors must work together if they hope to reverse a decadeslong trend that has seen advanced industries hubs shrink across the country, according to a report released on Tuesday by the Brookings Institution.
“At a moment of uncertainty about the sources of U.S. economic renewal, this report urges the nation to double down on the advanced industries sector as one component of future prosperity,” the report says.
Advanced industries spend more than $450 per worker on research and development, and at least 20 percent of their workers have knowledge in science, technology, engineering and math. The industries play a major role in the U.S. economy, employing 12.3 million people, or about 9 percent of the workforce, across 50 industries, including manufacturers, energy companies and services firms
The sector, however, faces significant challenges in order to grow.
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The U.S. has advanced industries clusters in various regions, including Chicago, which the report refers to as “hubs of prosperity.” But not many hubs have the technology input, labor pools and supplier density to drive global competitiveness. At the same time, competing nations are accelerating their investments in research and development and are ramping up the training of skilled workers.
The number of large metropolitan areas with at least 10 percent of their workforce in advanced industries declined to 23 in 2013 from 59 in 1980.
That’s a troublesome figure because the sector has a 2.2 job multiplier effect, the report says. Additionally, the sector produces 17 percent of the nation’s gross domestic product, employs 80 percent of the nation’s engineers, generates about 85 percent of all U.S. patents and accounts for 60 percent of exports.
In the Chicago area, which also includes parts of Indiana and Wisconsin, industries in the sector employ more than 400,000 people, making it the fourth largest of 100 metro areas. The hub has lost nearly 120,000 jobs since 1980, despite its gains since the recession.
The report calls for both private and public sectors to radically rethink their technology development strategies and ramp up innovation efforts. It also calls for firms to get “much more” involved in developing the skills pipeline they need. And for public-private partnerships to work to renew the vitality of their hubs.
Kenan Fikri, one of the authors of the report, said that while there are some programs and partnerships in place, such as the Digital Lab for Manufacturing in Chicago, they are not enough. The lab, is set to finish construction of its home on Goose Island this quarter. The lab aims to team manufacturing experts, software companies and universities to spread cutting-edge technology through supply chains, to design and test new products, and to reduce costs in manufacturing processes across many industries.
“Those examples are the exceptions rather than the rule and we need them to become the rule,” Fikri said.
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