Suzanne Berger brings much-needed insight to the study of deindustrialization by noting its detrimental impact on the development of industrial skills. As she illustrates, smaller manufacturing firms in the United States have long depended on their larger counterparts to invest in the manufacturing skills pipeline. In the past, large firms supported formal training institutions—including apprenticeships and community college programs—that small firms could also draw from. Equally important were innovative human resource strategies internal to larger firms, such as on-the-job mentoring and incumbent worker training systems that indirectly benefited smaller firms and suppliers when workers changed jobs. Under intense pressure from investors to reduce their size, large companies lost their capacity to maintain the institutions that nurture and diffuse talent. That loss has rippled through manufacturers and supply chains, potentially undermining established career ladders.
Berger’s solution is to encourage investors to take a longer-term perspective in order to buffer larger firms and the “industry-wide ecology” they sustain. She also calls for stronger policy support of shared training infrastructure, including increased public funding of community college programs and industry-recognized credentials.
But there is another solution: empowering smaller manufacturers to become active participants in the development of industrial skills. Focusing on large firms perched at the top of the manufacturing hierarchy lets smaller manufacturers off the hook. This is especially problematic considering the steady decline in average manufacturer size over the past decade or so; today, the typical U.S. manufacturer employs around forty workers. We should push small and medium-sized firms to accept greater responsibility for training and worker mobility. Doing so will not only help to maintain high-quality job opportunities in manufacturing, especially for moderately educated workers, but also could generate new training models that are better suited to withstand future rounds of industry restructuring.
In North Carolina, smaller firms created a training cooperative.
Before small firms can take charge of skills development, they will have to grapple with a number of organizational constraints. As Berger notes, smaller manufacturers are generally less inclined than their larger counterparts to invest in worker training. A recent survey of 850 manufacturers by economists Paul Osterman and Andrew Weaver confirms that “smaller establishments often operate on tighter margins and have more limited internal systems for skill development.” The management scholar Peter Cappelli adds another twist: firms increasingly outsource key human resource functions, further undermining companies’ capacities to design, manage, and adapt training systems and protocols.
This is not to say that small manufacturers go without skilled workers. With diminished internal capacity to nurture skills, many acquire skilled employees via the market. Less educated workers at the bottom are treated as permanently unskilled and easily replaced, even if they are eager to learn and have a strong work ethic. I heard the owner of one small manufacturing firm disparagingly call this group his “button pushers.” There is often no pathway for them to climb to the top. Meanwhile more valued employees have access to external training when they need to refresh their skills.
Buttressing external training institutions, especially community college programs, is essential to workforce development in manufacturing. But we also need to invest in strategies that increase smaller manufacturers’ commitment to internal training and career advancement. Without this dual approach, we risk exacerbating inequities within firms and perpetuating the view that skill is something to buy, not make—something whose value depends on formal education and is derived from learning that goes on outside the work environment itself.
Fortunately, some creative initiatives offer transferable lessons. In North Carolina a group of pioneering firms, initially made up of small and medium-sized manufacturers of specialty machinery and metal products, banded together nearly two decades ago to create a training cooperative. Each firm commits time and resources to on-the-job training and mentoring of high school apprentices who are concurrently enrolled in community college courses. Larger firms, have come to value this partnership and over the years have joined the group.
A variety of manufacturing-sector initiatives throughout the United States are experimenting with workforce strategies not only to help small and medium-sized manufacturers identify hidden sources of talent both inside and outside their walls, but also to push firms to invest in internal training and mentoring. As Berger notes, the shrinking size of manufacturing firms threatens innovation. These experiments in skill development, led by small firms, may point the way to strengthening the U.S. manufacturing ecosystem.