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ADVANCED MANUFACTURING ADVANCED MANUFACTURING ADVANCED MANUFACTURING ADVANCED MANUFACTURING

WORKFORCE TRAININGWORKFORCE TRAININGWORKFORCE TRAININGWORKFORCE TRAINING

FOR THE 21FOR THE 21FOR THE 21FOR THE 21stststst CENTURY CENTURY CENTURY CENTURY

A Study for the A Study for the A Study for the A Study for the Workforce Workforce Workforce Workforce

Development Program, Development Program, Development Program, Development Program, California California California California

Community CollegesCommunity CollegesCommunity CollegesCommunity Colleges,,,, Applied Applied Applied Applied

Competitive TechnologiesCompetitive TechnologiesCompetitive TechnologiesCompetitive Technologies

Marshall Gartenlaub, Ph.D.Marshall Gartenlaub, Ph.D.Marshall Gartenlaub, Ph.D.Marshall Gartenlaub, Ph.D., , , ,

DirectorDirectorDirectorDirector

By By By By

Gus Koehler, Ph.D.Gus Koehler, Ph.D.Gus Koehler, Ph.D.Gus Koehler, Ph.D.

Victoria KoehlerVictoria KoehlerVictoria KoehlerVictoria Koehler----JJJJones, Ph.D.ones, Ph.D.ones, Ph.D.ones, Ph.D.

Time StructuresTime StructuresTime StructuresTime Structures 1545 University Ave, Sacramento Ca1545 University Ave, Sacramento Ca1545 University Ave, Sacramento Ca1545 University Ave, Sacramento Ca

916916916916----564564564564----8683868386838683

Spring, 2006Spring, 2006Spring, 2006Spring, 2006

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Table of Contents

Executive Summary 3 Manufacturing in California: Evolving, Not Dying 10 Technology Convergence for California: Unique Future Materials and Productivity Advantage 12 Converging Technologies

Advanced Manufacturing Integrating Advanced Manufacturing with New Nanotechnology

and MEMS Materials Produces Competitive Advantage Manufacturing in California Today 17

California’s Manufacturing Competitiveness Compared with Other States

Increased Manufacturing Productivity Globally and Loss of Market Share have Hurt California Manufacturing Firms and Lost Jobs

Small and Start-up Manufacturing Firms Account for Most Job Growth

A California Strength is her Small and Medium Sized Manufacturing Firm’s Connections with Global Supply Chains

Increased Numbers of Minority Owned California High Tech Start-ups with International Ties is a Competitive Advantage

The Growing Number of Minority Owned Manufacturing Firms is Increasing California’s Future Potential to Establish new Global supply Chains and Markets

Latino Manufacturers Mexico MEMS/Nanotechnology Initiative Manufacturing Training in Mexico Small and Medium Sized Manufacturing Firm Competitiveness

Issues 30 State and National Manufacturing Competitiveness Studies Promote Advanced

Manufacturing

Advanced Manufacturing Workforce Projections 34

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Manufacturing Improvement and Workforce Training Services Pay Off 39

Time Structures’ Survey of Manufacturers 40

Respondent Characteristics 40 Business Sectors

Most Significant Technologies 43 Current technologies Future technologies Expected technological change

Workforce Skill Needs 46 Expertise necessary for current technical job applicants Technical skills needed in the future Personal skills needed in the future

Company Support for Training 51 Recruitment

Recent hiring Future hiring

Support Needed from the Community Colleges 52 Attachment 1: Manufacturers Survey Methodology 55 Attachment 2: Manufacturers Survey Questionnaire and

Statistical Summary of Findings 56 Attachment 3: Manufacturers Survey Respondent Comments 70 Attachment 4: State Training Programs: Advanced Manufacturing

Investments 76

Attachment 5: Manufacturing Occupations and Skills 78 Attachment 6: White House SBIR Executive Order 79 Endnotes 81

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EXECUTIVE SUMMARY

“For the overwhelming preponderance of human history, humans have lived in societies that were characterized by 80% continuities, 15% cycles, and only 5% novelties at best. Now I believe the figures are reversed: 80% of our futures may be novel, 15% cyclical, and only 5% continuous with the past and present."

Professor Jim Dator, Hawaii Center for Futures Studies

The Challenge The National Materials Advisory Board pointed out in 2004 that “…[I]t is evident that if a firm or a national sector loses the ability to know how to make things, to use production as a strategic capacity, then it will lose the ability to capture value.”1 Important elements of California’s strategic capacity is being addressed by California’s Community Colleges. The Chancellor’s Office created the Applied Competitive Technologies Initiative (CACT): “…to improve the competitiveness of small and medium-sized manufacturing and engineering companies by fortifying sound manufacturing technologies and by supporting the development of a skilled workforce.”2 In fulfilling this role, the California Community College’s Applied Competitive Technologies Initiative is facing a new education/training challenge, one that is well characterized by Professor Dator in his statement above. Manufacturing in California in the 21st Century is not what manufacturing was in the 20th Century. For one thing, manufacturing employment has dropped from representing 37.8 percent of all wage and salary jobs in 1943 to 10.9 percent in 2003.3 Substantial job losses in manufacturing production have continued to occur in California, across the nation, and around the world for the last ten years. From January 1990 to September 2003, California lost almost 400,000 manufacturing jobs. The decline in manufacturing employment is currently measured by the decline in the number manufacturing production employees (this narrow definition will become important later) over the last decade. The proportion of all jobs accounted for by manufacturing in California dropped from 15.9 percent to 10.9 percent during the same period.4 Finally, manufacturing’s contribution to the state prosperity has also declined. Since 1977, manufacturing dropped from contributing 17.8 percent of the California’s Gross State Product to contributing 11.3 percent of the state’s Gross State Product.5 Despite these substantial reductions, there were 52,341 manufacturing firms in California in 2002. About one-third of them are small firms. In 2003, California was the number one state for manufacturing with 1.5 million employees in the sector (32 percent of them are in Los Angeles County), and in value of output.6 This represented 10.3 percent of the nations manufacturing workforce even after the recent decline in manufacturing jobs is taken into consideration. California has the largest share of basic jobs in high wage sectors—though not in diversified manufacturing where it has been gaining jobs—than does the nation.7 Six developments account for the most recent changes in the late 1990s and earlier 2000s in the number of manufactures and employment: 1) prime manufacturers increasing their dependence on suppliers and pressuring them to reduce costs; 2) the integration of design-

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production-logistics into global supply chains tied to prime contractor demands leading to a reduction in the number of US parts suppliers; 3) the adoption of new advanced digital manufacturing technologies producing productivity improvements; 4) the convergence of multiple technologies such as Nanotechnology, MEMS, and biotechnology to create new manufacturing and product hybrids; 5) the ability to offer value such as proprietary, high-technology products; a willingness to customize; extraordinary service and parts support; short production runs; and fast turnaround time;8 and 6) globalization of markets including the adoption of advanced technologies. These principal factors—integration of supply systems, advanced digital manufacturing, convergence of new materials and technologies, and globalization—are moving together to challenge California’s rapidly evolving manufacturing sector. It is the continuing development and acceleration of this convergence, along with the accompanying workforce training needs that the California Applied Competitive Technologies Initiative (CACT) will respond to and facilitate over the next decade. Competitive Advantage = An Innovative Workforce + Advanced Manufacturing + New Materials + Global Logistics + Ubiquitous Information Technology The core of California’s ability to sustain and expand its competitive manufacturing advantage in the future is the use of new materials, applied through advanced manufacturing techniques to produce innovative products that are moved across global electronic and surface logistics, just-in-time, to closely tied customers anywhere in the world. Information technology penetrates and ties together every element of this process. An innovative, highly trained workforce working with advanced manufacturing and the new materials technologies invents and applies the proprietary knowledge that generates a firm’s competitive advantage. This report concentrates on advanced manufacturing. Advanced manufacturing depends heavily on information technology and the digital networks. It involves the simultaneous digital integration via specialized software of various subsystems involved in the design, manufacturing, and marketing activities occurring at several levels for a particular product. Digital manufacturing also permits what is called “additive manufacturing” where small components are simultaneously added together to create a product (this is an essential process for nanotechnology manufacturing at a very small scale.) For example, the design of an automobile involves fully integrating various systems. This requires the active design and production participation of the prime contractor such as General Motors and its parts suppliers. Automobile components include for example, brake rotors, suspension parts, or engine control computers. These must be smoothly and quickly brought together and assembled into a subsystem like the brake subsystem, the transmission, the suspension subsystem, or the engine. These larger subsystems are finally brought together via advanced logistics and assembled into an automobile. Digital integration also extends to the highest or enterprise level. Here various services such marketing, distribution, life-cycle management, product service, etc, are digitally linked together with product design and production information. This entire information technology system is used to design the next car model and to detect and fix problems with the existing one.

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From 1990 through 2002 California’s smaller manufacturing firms grew in number and in number of employees, while larger firms declined. These smaller and medium sized firms are California’s future and are the ones to benefit most from improved competitive advantage. Ethnic entrepreneurs have been a primary source of high-technology start-ups, and the establishment of supply chains with South East Asia, China, and Mexico. The number of manufacturing firms owned by Latinos and other ethnical minorities—while small now compared to White owned firms—will increase given future demographic projections. California’s competitive advantage will involve continuing to strengthen the global connections and support the growth and development of highly productive high-technology firms, including those owned and operated by ethnic minorities, as they operate in multiple industry sectors. Summary of Time Structures’ Manufacturing Survey Time Structures conducted a survey of two hundred manufactures. The data shows their thoughts on which technologies are important now, which ones are likely to be in the future, needed skills, and who and where they will be hiring from. The data is particularly useful for placing small and medium manufacturers within the broader perspective already presented. All two hundred manufacturing executives were interviewed by telephone. Most participants were small manufacturers; over three-quarters employ fifty employees or less. Most respondents produce an end product and sixty-five percent of them are not currently part of a major supply chain. About 88 percent of the surveyed manufacturers represented manufacturing sectors there were not expected to grow or could in fact decline by 2012 according to Labor Market Information Department data. These businesses would appear to be the most challenged to improve their competitiveness. A fundamental question arises from these facts: how should scarce CACT resources be divided between companies that may be decline and those that are growing but are not necessarily represented in this survey? “Gazelles” or rapidly growing firms can be from both older and newer industry sectors. Older Gazelles or newer Gazelles in older sectors, tend to be companies that have adopted new high productivity technology and other efficiency measures that increase their competitive advantage. Newer Gazells are often first movers in new sectors and benefiting from the newest technologies. When survey respondents were asked "Will you be manufacturing in California in three to five years?" 84% answered "yes." Those who answered "no" cited expense as the main reason for moving away. Clearly, these businesses along with their jobs are committed to staying in California. Most Significant Current Technologies

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When asked which technologies are most significant today, and which will be most significant in a few years, six technologies were identified from a list more often than others:

• "Lean" manufacturing technologies, including quality improvement and problem solving, is the first most valued technology today and remains among the top three in the near future.

• ISO 9000 and related certifications are among the top three most valued technologies today and will be the most significant of the technologies a few years into the future.

• Collaborative and/or concurrent engineering technologies have strong current significance but were mentioned less often for future significance.

• Security affecting technology or IT software and data has current significance but is recognized less for future significance.

• Manufacturing-related simulations and visualization technologies will grow in significance for several major manufacturing sectors

• Rapid prototyping from 3D modeling will increase in significance in the near future. Three technologies have some significance today but received little recognition as being particularly significance in the immediate future:

• Equipment and software to reduce scrap • Supply chain management • Energy use and energy conservation technologies

Technologies with Less Significance Nine technologies were mentioned less often than others:

• Nanotechnology was not mentioned as having any current significance, but was mentioned as gaining a bit in a few years' time.

• Biotechnology and bioinformatics and related technologies were given only a few votes for current significance and, again, and are expected to make only small gains in the immediate future.

• Product lifecycle management technologies were mentioned by very few when considering both current and future manufacturing.

• Enterprise management technologies were not recognized as being very significant in today's manufacturing arena.

• Low environmental impact technologies such as green design, life-cycle manufacturing, cradle to grave design, were also not recognized as being very significant.

• MEMS, or Micro-Electro-Mechanical Systems, and related technologies were not mentioned often.

Technical Workforce Skill Needs Over all business sectors, 58% say they are currently able to hire technicians who are adequately trained for the job, but 39% say they are not.

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The transportation-related sector of manufacturing has the most difficulty: 54% report that they have trouble hiring adequately trained technicians.* Half of the aerospace sector agrees that finding adequately trained technicians is not easy. Manufacturers of both, industrial machinery and chemicals and plastics also find it a challenge, with 44% and 43% respectively reporting difficulty. Respondents said that when hiring technicians today, the most important fields of expertise are: information technology as applied to (1) quality management; (2) computer aided design; and (3) materials management. Detailed information was collected on specific technical skills and personal requirements that technicians must have to be a successful job applicant as manufacturing continues to evolve. The most important technical skills that applicants will need in the near future are: electronics, mechanical skills, and vocational skills such as welding, instrumentation, and basic shop. Familiarity with computer technology was ranked as being second most important. With regard to personal skills, almost 40% said technicians of the future will need to understand basic employment issues. Some of the qualities mentioned include: attendance, work ethic, workmanship and productivity; desire to learn, self-motivation and self-direction; ability to follow directions and ability to work as a team. English language skill development is next in importance. Community College Training and Student Hiring by Business About 43% of the businesses surveyed said that, during the last two years they had hired someone trained by a two-year community college or technical school. Forty-eight percent said they expect to hire someone with a two-year degree in the next two years. Opportunities for the Community Colleges In addition to training in mechanical, vocational and computer skills, a major recurring theme was the desire to see a strengthened communication network between college and business. For example, respondents noted that community colleges need to: "Keep up with current trends by using market research, advisory panels, communication with business, and so on." This sentence attempts to capture a broad desire on the part of manufacturers that colleges stay current by talking with them, developing outreach programs, and using industry and advisory committees to gather information on industry-related developments so that the colleges can stay one step ahead of their clients. Manufacturers find themselves facing a

* This finding supports Time Structures’ analysis of transportation’s Intelligent Transportation System employment needs. See: Time Structures (2005). Training California’s Transportation Workforce for the 21st Century: Responding to the ITS and The New Vehicle Technology Revolution. Advanced Transportation Technology Initiative, Economic and Workforce Development Program, California Community Colleges.

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global challenge to California's manufacturing capacity and productivity due to improved technical and educational capacity of other countries. Individual manufacturers hope to stay one step ahead of these developments by implementing the formulae outlined above so they can gain and keep competitive advantage. The hope is that the community colleges can reduce expense and risk by knowing which technologies are on the horizon. Actions for Making CACT Visionary, Evolving, and Agile The following actions for strengthening the CACT initiative should be considered:

1. The Initiative Director should convene a working group to review and evaluate this report and its recommendations to develop an implementation plan that will align the CACTS training priorities with emerging technologies and the changing workforce. Further analysis by the CACT Centers of the survey results could yield useful insights for particular centers.

2. Consideration should be given to what the CACT can provide to companies in sectors

that are less likely to grow. Technology transfer, targeted workforce training, and other strategies are suggested by the survey. The survey also showed that many companies did not give a high rank to high productivity technologies that could be useful now, such as enterprise management, life-cycle manufacturing, rapid-prototyping, and product life-cycle management. They did rank these technologies as being important in the future. This future oriented technology evaluation extends to biotechnology and nanotechnology as well. A focus on showing the value of these technologies to improving productivity now may be appropriate.

3. Equal consideration should be given to allocating resources to promising start-ups in

rapidly growing sectors that are much more likely to generate future jobs. The mix of technology services and workforce training that would contribute to their survival could be quite different. Time Structures’ survey’s completed for the Biotechnology and Workplace Leaning Initiatives (nanotechnology/MEMS) provides useful data on their needs.

4. In the past, high technology manufacturing firms owned by ethnic minorities have

provided a significant number of new jobs in Silicon Valley. Nanotechnology/MEMS and other initiatives being undertaken by Mexico, China, Southeast Asian, and Latin American countries should provide significant business supply and networking opportunities. CACTS should help California companies develop the necessary supply chain and cultural capacities to realize their unique advantage. The International Trade Centers could provide useful assistance.

5. The 21st Century workforce will be very different from that of the 20th Century.

Extensive attention to these differences is provided in the Workplace Learning Initiative study. The most salient point is that about 47% of the new 21st Century workforce will be Hispanic. Equally important is the fact that 52% of all students passing the math and English high school exit exam in 2005 were Hispanic. The

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CACTS should join with the Workplace Learning Initiative to develop high school outreach programs to these students. Workplace Learning should also develop, in consultation with the CACTS, the necessary science and math classes to prepare the emerging workforce for the higher level training offered by the CACTS in advanced manufacturing. This partnership should extend to nanotechnology and MEMS as well. A similar partnership could be developed with the Biotechnology Initiative to address biotechnology advanced manufacturing training needs.

6. Develop the capacity to anticipate and track advanced manufacturing and other

manufacturing competitive advantage developments by systematically collecting related data and by expanding participation in key government and private industry-based planning groups. The goal of this activity is to track a highly complex, evolving system that is not fully realized in the present.

7. Partner with the University of California, the California State University System and

other universities to anticipate and develop new academic and training curricula as new technology transfer produce opportunities for new workforce career ladders.

8. Develop a communication and outreach strategy that identifies and communicates

with California companies receiving an U.S. Small Business Innovation Research grant. The outreach effort could market CACT resources to support rapid prototyping and product design using digital media, with a particular emphasis on firms engaged in high technology manufacturing including nanotechnology and MEMS.†

† President’s Executive Order on U.S. Small Business Innovation Research dated February 24, 2004.

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ADVANCED MANUFACTURING WORKFORCE TRAINING FOR THE 21st CENTURY

Manufacturing in California: Evolving, Not Dying

Small manufacturers: “number more than 296,000 nationally; represent more than 99 percent of the nation’s manufacturers; • account for 40 percent of the value of U.S. production; employ more than 8 million men and women; increasingly export: 95 percent of all manufacturers that export are SMMs, and are responsible for 15 percent of the nation’s manufactured goods exports.”9 California manufacturers are a very significant portion of the nation’s manufacturing capacity, reflecting industry changes that are going on nationally. Manufacturing in California in the 21st Century is not what manufacturing was in the 20th Century. For one thing, manufacturing employment has dropped from representing 37.8 percent of all wage and salary jobs in 1943 to 10.9 percent in 2003.10 Substantial job losses in manufacturing production have continued to occur in California, across the nation, and around the world for the last ten years. From January 1990 to September 2003, California lost almost 400,000 manufacturing jobs. The decline in manufacturing employment is currently measured by the decline in the number manufacturing production employees (this narrow definition will become important later) over the last decade. The proportion of all jobs accounted for by manufacturing in California dropped from 15.9 percent to 10.9 percent during the same period.11 Manufacturing’s contribution to the state prosperity has also declined. Since 1977, manufacturing dropped from contributing 17.8 percent of the California’s Gross State Product to contributing 11.3 percent of the state’s Gross State Product.12 Graph 1 shows that most of the job decline has taken place due to the loss of larger

Graph 1

Number of Firms by Size of Employment

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002

Firm

s 0-

19 a

nd 1

00+

Em

ploy

ees

10,000

10,500

11,000

11,500

12,000

12,500

13,000

Firm

s w

ith 2

0-99

Em

ploy

ees

0-19 Employees 100-1,000+ Employees 20-99 Employees

Source: Source: California Employment Development Department, Report 524. "California Unemployment Insurance Reporting Units by Size, Industry and County".

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companies. Between 1990- and 2002, there was an increase of 4,688 firms with19 or fewer employees, compared to a loss of 234 firms with 20 to 99 employees, and a loss of 587 firms with 100 or more employees. Dramatic losses in the later two groups occurred in the late 1990s and early 2000s, setting the trend for the new century. Manufacturing industries vary by California region. For this reason, job loss was not uniform across all of the state’s counties. Counties showing a net gain in manufacturing jobs between July 1990 and October 2002 included: San Bernardino gaining 12,252 manufacturing jobs; Riverside County gaining 7,353 jobs; and Orange County gaining 5,158 jobs. In contrast, Los Angeles County lost 156,024 manufacturing jobs during the same period.13 Overall, California manufacturing employment increased by 0.2 % in October, 2005 sustaining a multi-quarter growth pattern.14 Despite these substantial reductions, there were 52,341 manufacturing firms in California in

Graph 2

Number of California Manufacturing Firms by Firm Size (number of employees) in 2002

20,588

9,3218,156 7,690

3,3782,210

676 212 1100

5,000

10,000

15,000

20,000

25,000

0-

4

5-

9

10-

19

20-

49

50-

99

100-

249

250-

499

500-

999

1

,000

and

over

Firm Size

Num

ber

of F

irms

Source: California Employment Development Department, Report 524.

2002. About one-third of them are small firms. In 2003, California was the number one state for manufacturing with 1.5 million employees in the sector (32 percent of them are in Los Angeles County), and in value of output.15 This represented 10.3 percent of the nations manufacturing workforce even after the recent decline in manufacturing jobs is taken into consideration. California has the largest share of basic jobs in high wage sectors—though not in diversified manufacturing where it has been gaining jobs—than does the nation.16 Six developments account for the most recent changes in the late 1990s and earlier 2000s in the number of manufactures and employment: 1) prime manufacturers increasing their dependence on suppliers and pressuring them to reduce costs; 2) the integration of design-production-logistics into global supply chains tied to prime contractor demands leading to a reduction in the number of US parts suppliers; 3) the adoption of new advanced digital

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manufacturing technologies producing productivity improvements; 4) the convergence of multiple technologies such as Nanotechnology, MEMS, and biotechnology to create new manufacturing and product hybrids; 5) the ability to offer value such as proprietary, high-technology products; a willingness to customize; extraordinary service and parts support; short production runs; and fast turnaround time;17 and 6) globalization of markets including the adoption of advanced technologies. The National Association of Manufacturers (NAM) recognizes the importance of nanotechnology to manufacturing’s future.18

After 31 months of consecutive net job losses now amounting to 2 million, it has never been clearer that the United States must push even harder to lead the rest of the world in technological sophistication and productivity. The race for the world lead in nanotechnology is one that the United States simply cannot afford to lose. Without question, the race begins in the laboratory. At the same time, the NAM will be promoting the earliest feasible manufacturing applications of research results.

Key factors—integration of supply systems, advanced digital manufacturing, convergence of new materials and technologies, and globalization—are moving together to challenge California’s rapidly evolving manufacturing sector. It is the continuing development and acceleration of this convergence, along with the accompanying workforce training needs that the California Applied Competitive Technologies Initiative (CACT) will respond to and facilitate over the next decade.

Technology Convergence for California: Unique Future Materials and Productivity Advantage

Converging Technologies

Since 1920 there have been continuous improvements in manufacturing technology that have redefined how manufacturing is done and the materials used leading to increased levels of product diversity and productivity resulting in a new form of competitive advantage (Figure 1). First there was Henry Ford’s assembly-line leading to mass production. Then the assembly-line was made more efficient improving productivity. Next came product improvements consistent with the customer’s demands. Building on what had come before, the whole process was progressively digitized. Finally, we come to our era where we see the same development of new materials that lead to whole new digitized design, manufacturing and logistic processes shrinking the time from conception to final product, linking directly to the customers needs.

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Figure 1

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Source: Time Structures Advanced Manufacturing Advanced manufacturing depends heavily on information technology and the digital networks. It involves the simultaneous digital integration via specialized software of various subsystems involved in the design, manufacturing, and marketing activities occurring at several levels for a particular product. These abilities permit a small manufacturer to respond to a prime contractors requirements for low cost and for proprietary, high-technology products. It also permits rapid customization; a very high level of service and parts support; short production runs; and fast turnaround time.19 Digital manufacturing also permits what is called “additive manufacturing” where small components are simultaneously added together to create a product (this is an essential process for nanotechnology manufacturing at a very small scale as discussed below.) For example, the design of an automobile involves fully integrating various systems. This requires the active design and production participation of the prime contractor such as General Motors and its parts suppliers. Automobile components include for example, brake rotors, suspension parts, or engine control computers. These must be smoothly and quickly brought together and assembled into a subsystem like the brake subsystem, the transmission, the suspension subsystem, or the engine. These larger subsystems are finally brought together and assembled into an automobile. Digital integration also extends to the highest or enterprise level. Here various services such marketing, distribution, life-cycle management, product service, etc, are digitally linked together with product design and production information. This entire information technology system is used to design the next car model and to detect and fix problems with the existing one. To summarize, advanced manufacturing involves the ability to speedily conceptualize, analyze, and make decisions about the design, production, quality, and sale of a product using information from numerous disciplines at multiple levels at the same time.20 Almost 70 percent of the cost of a product is set by decisions made early in the engineering design and production development process. The ability to see and work concurrently with a large integrated design and marketing space permits better analyzed trade-offs between alternatives. In the future, advanced manufacturing workers will need the ability to integrate modeling and simulations across multiple domains including, for example, geometric modeling, performance analysis, life-cycle analysis, quality analysis, cost analysis, and manufacturing. Graph 3 provides one example of software designed for this purpose.

Digital manufacturing tools permit a company’s product market to be segmented. Each segment receive a functional variation of the same product. Once produced and sold, each

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Graph 3

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product, its performance, and its service record can be digitally tracked.21 The above PowerPoint slide shows Microsoft’s plans to develop a fully IT integrated manufacturing, distribution, customer, and highway system (Graph 1).22 “Connected Concept Cars” include remote data communications to dealerships, distribution and logistics systems, product research and design, manufacturing operations, quality control, product marketing, and in-vehicle computer and other systems that tells the driver of potential performance problems and maintenance updates.23 Information flowing from any one point in this diagram could be analyzed and used at any other point to improve overall systems operations and competitive advantage. For example, data produced by the operating vehicle on the road can be automatically collected and sent to various company operations, changing how they go about producing and installing parts in the near future. Software in the vehicle could also be instantaneously updated.24 Generally, this flow of information and the networks it creates changes the form of the involved companies and their divisions. It does so because it integrates internal company functions with other outside internal company functions via virtual structures that coalesce and vanish in response to the digitally dynamic marketplace.25 Integrating Advanced Manufacturing with New Nanotechnology and MEMS Materials Produces Competitive Advantage A big change is underway in the scale that manufacturing works at. Up until recently nearly all manufacturing applications involved the reduction of thousands of tons of raw ores or natural products via melting, chilling, vaporizing, pounding, cutting, drilling, casting, forging, grinding, a chemical reaction, or some other method to produce materials that could be turned into marketable products in multiple industries. These “top-down” processes for manufacturing products are being replaced by “bottom-up” or “additive” process at far smaller scales; Micro-Electro-Mechanical Systems (MEMS), and Nanotechnology. The term “MEMS” is typically applied to “…small systems which have a moving part and utilize some form of electronics.” In terms of a measurement, anything under 100 nano meters (nm) is nanotechnology; and anything greater is microtechnology or MEMS. In a way of speaking we can say that MEMS involves the flea on the ant; nanotechnology involves molecular processes that regulate the flea’s cells. Nanoscience is a broad term used for the study of materials and/or processes at the nanoscale in a variety of disciplines. Biology, chemistry, and physics have all independently converged into nanoscientific research areas, ranging from everything to understanding intracellular processes to chemical interactions to quantum mechanics. Nanotechnology is the technological realization of the direct manipulation of materials and processes at the nanoscale or molecular and atomic levels. Building molecule by molecule, or bottom up, is the realm of nanotechnology.‡

‡ Biotechnology is using nanotechnology to develop and produce various products. The interrelationship between the two technologies will deepen over the coming decade. See: Time Structures (2005). Biotechnology Workforce Training Needs in the 21st Century. Biotechnology Initiative, Economic and Workforce Development Program, California Community Colleges.

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MEMS and Nanotechnology companies see themselves as producing product platforms that can be applied in multiple industrial settings.26 Industry data is often duplicative on the number of companies and other information. As new processes or materials associated with nanotechnology and MEMS emerge, it will become harder to find the requisite workforce and with them the needed advanced manufacturing skills. The National Research Council believes that the question is:

[whether ongoing]…production activity is needed to sustain the knowledge required to implement the new science and science-based engineering. In other words, a regional or [state] government may not care if the learning goes on within a specific firm, as long as the learning is captured in technology development within its domain. …[I]t is evident that if a firm or a national sector loses the ability to know how to make things, to use production as a strategic capacity, then it will lose the ability to capture value. [If this is so], [t]hen, because the firm is constructing and evolving a complex evolutionary system, not just procuring a set of defined components, more of the system—a larger portion of the value-added—must be kept in-house and not outsourced. More generally, if production becomes characterized by rapid turnaround and custom activity, is the decision about where to locate production within the firm changed? Do diversified quality production and flexible specialization teach us that custom production and rapid turnaround imply tighter geographical and organizational links between production and development?27

The implications are profound for “global swarming” or the continuous re-alignment of highly innovative and productive small and medium sized manufacturers with regional and global supply chains. Regional dominance by integration of innovation, design, and production of key components and subsystems can be maintained only so long as another region does not obtain more advanced design, materials or digital manufacturing technology. India, China and other advanced, and developing countries will inevitably take a larger portion of the technology pie given the investments they are making in emerging technologies like those being discussed here.

More importantly however, there is the distinct possibility of the pie itself growing faster than before. There could be benefits to geographical diversity in science and technology. Different conditions and markets, as well as different scientific cultures, may spur innovation along unusual lines and in more appropriate ways than was possible earlier, leading to a synergy through the development of mutual attraction and compatibility between globally dispersed innovative regions.28

Clearly, California’s small and medium sized businesses must strive to obtain first mover and competitive advantage for the production system that they are part of and/or become a part of emerging ones in other nations.29 The problem today is that prime contractors change their

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suppliers as often as every one or two years30 The impact of such switching could be diminished or limited by innovative production specialization resulting from the unique union of technology and workforce skills in a particular company or region. A well trained workforce that develops and sustains the capacity to build and implement the new advanced manufacturing and materials technology will be the competitive workforce of the future.

Manufacturing in California Today

Twenty-first Century manufacturing will take root and grow in California. The Bay Area Economic Forum points out that:31

As global manufacturers continue to meet customer demands for both lower prices and more customized and rapidly delivered products, a substantial amount of global production will remain in high-cost countries, so long as the benefits to customers of rapid delivery and customization outweigh the benefits of lower cost [and longer delivery time]. Fundamentally, …the proportion of products for which the benefits of local production outweigh the savings from offshore production is far higher than might appear at first glance.

This is particularly true when converging technologies that will revolutionize existing manufacturing sectors and create whole new ones in the future are considered. California is on the leading edge in four major ones: biotechnology, information technology, nano/MEMS, and advanced automotive engine alternative fuel design. New technologies must be combined with workforce training, and reduction of other cost of doing business if a company is to stay in California.32 We will argue that the Bay Area Economic Forum’s vision needs to be adjusted because local high-technology small and medium sized firms are constructing and evolving a complex evolutionary manufacturing global system in both old and new sectors. This system involves new competitive production relationships that are dependent on rapid product design that utilizes new materials and digital manufacturing techniques. These advantages are tightly tied to unique in-house intellectual property skills that cannot be easily duplicated, and to highly efficient logistic systems. These important local conditions qualify decisions about where to place production operations and when to move such critical capabilities. These new modes of production, based on unique technology and workforce based intellectual property, linked vertically and in parallel via information technology and logistic systems to multi-national corporations and local markets, will produce strong, virtual companies that are globally distributed.33 California’s Manufacturing Competitiveness Compared with Other States The Office of Technology Policy, Technology Administration, US Commerce Agency, compares the technological competitiveness of states using nine indicators of funding flows, twelve of human resources, four of capital investment and business assistance, five

Table 1: California Competitiveness

18

Source: Office of Technology Policy, Technology Administration, US Commerce Agency (2004). The Dynamics of Technology Based State Economic Development: State Science and Technology Indicators. Washington, DC.

19

of the state of technology business base, and eight outcome measures (Table 1). California is ranked against other states with 1 being first and 50 being lowest. The bar graph to the right shows whether the state performance on the indicators is below, meets or exceeds the national average. Inspection of the table shows that California meets or exceeds national performance in 33 of the 38 measures. It is weakest in human resources including national math test scores, percent of population graduating from high school, percent of population receiving a Bachelor’s Degree. The Manufacturing Institute considers a high performance workforce as the most important factor to future manufacturing success, followed by product innovation.34 Generally, while being strong in many areas that support technology based economic development, the state is weak in human resources development. California is very strong in net high-technology firm formations, patents, venture capital, and federal funding awards for advanced research. These factors suggest that currently California has the technological and investment capacity to potentially respond to emerging manufacturing and new materials challenges but does not have the trained workforce to take advantage of what these resources could deliver. Few if any other states or nations have all of the key elements—including workforce skills—necessary to achieve manufacturing competitive advantage today.§ Increased Manufacturing Productivity Globally and Loss of Market Share have Hurt California Manufacturing Firms and Lost Jobs Productivity, declines in demand, manufacturing imports growing faster than export opportunities leading to loss of market share,35 deindustrialization or a 25% to 33% shift of job growth from goods production to services sector, deunionization, importation of manufactured goods, energy costs, and low labor costs, not outsourcing, account for California’s loss of manufacturing jobs.36 Businessweek, commenting on the national loss of jobs notes:37

The real culprit in this jobless recovery is productivity, not offshoring. Unlike most previous business cycles, productivity has continued to grow at a fast pace right through the downturn and into recovery. One percentage point of productivity growth can eliminate up to 1.3 million jobs a year. With productivity growing at an annual rate of 3% to 3 1/2% rather than the expected 2% to 2 1/2%, the reason for the jobs shortfall becomes clear: Companies are using information technology to cut costs – and that means less labor is needed. Of the 2.7 million jobs lost over the past three years, only 300,000 have been from outsourcing, according to Forrester Research Inc.

The historical importance of improvements in productivity can be seen in the following Graph 4.** Improvements in productivity have nearly doubled output per unit of input since the 1950s. Manufacturing labor productivity has outpaced that of the rest of the economy

§ These points are more fully addressed in other Time Structures future oriented studies for the Economic and Workforce Development Program, California Community Colleges. ** Productivity varied by manufacturing sector. See: Mark Schweitzer and Saeed Zaman (2006). Are We Engineering ourselves out of Manufacturing Jobs? Federal Reserve Bank of Cleveland.

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Graph 4

since 1977, even in the midst of recession, and strongly exceeds that of the US principal

Graph 5

Source: Manufacturing Institute (2006).The Future Success of Small and Medium Manufacturers. trading partners. These improvements have helped to respond to wage competition.38 Globalization†† is also growing because developing countries have improved their physical

†† Gobalization refers to the local results of a number of global driving forces that are changing local cultural, economic, production, political, design and other factors including: the aging of the world’s population, new enabling technologies such as nanotechnology, and information technology, the spread of transnational business and finance networks, improved education and technological ability, new geographical and political issues with new boundaries (militant Islam for example), a growing inter- and intra-nation wealth gap, the failure of various governmental and world institutions to solve conflicts and various social problems, the extension of design beyond single manufactured products to the design of nature (biotech) and to the design of economies of

Retooling Manufacturing Bridging Design, Materials, and Production, NAS, 2004.

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and educational infrastructure. Graph 5 shows that the US continues to dominate global manufacturing but that China and Korea are growing. Logistics is becoming a major global competitive edge when combined with advanced manufacturing, new materials, education and training. Competitive advantage in new and emerging markets depends on the most productive channeling of resources, quality, and the capacity to adjust manufacturing functions relative to engineering changes to deliver quality products just-in-time anywhere in the world. For example, if a new US application of an existing technology creates a new market in China, management must decide whether the design of the products and their production is best carried out in the US or in China. In fact the decision may be made to divide the process up, driven at least partially the local infrastructure (energy, roads, etc), production quality, and other design, information technology, and manufacturing factors. China is still weak in many of these areas but has developed a comprehensive plan for addressing them.39 The dynamic nature of competitive advantage can also be seen by comparing direct labor and total manufacturing costs between the US and China.40 China’s direct labor costs are far lower. However, the US total manufacturing costs (design through delivery) are lower than China’s because of higher productivity. The Chinese are aware of this gap. According to an Alliance Capital survey, China’s manufacturing job decreased 15 percent, double the average (7%) of the remaining third world countries for 1995-2002. This suggests that the Chinese are also improving productivity. According to a June 24, 2000 China State Council Document:41

With 5 to 10 years’ effort…. Domestic integrated-circuit products will also satisfy most domestic demand and be exported as well while reducing the development and production technology gap with developed countries.” [This is not an empty threat.] “Andy Chatha, President of ARC Advisory Group, concluded from a recent trip to major Chinese industrial centers that China’s automation business is “booming”--growing at 25% or 3 times its GDP growth rate. Most major automation companies claimed to have landed at least one mega order in the range of $20-$40 million this year [2003]. Completely new facilities are being built in every industrial sector, including refineries, steel mills, and power, auto, and cement plants. Plus, China’s trade balance gives it the money to invest in badly needed infrastructure.

Small and Start-up Manufacturing Firms Account for Most Job Growth According to a study by the California Economic Strategy Panel,‡‡ more than 62 percent of the state’s job growth from 1993 to 2002 came from newly formed small companies.

logistic systems (intelligent transportation systems), movement and connectivity, and globally distributed problem solving and production capacities (virtual companies). See: Bruce Mau (2004). Massive Change, London: Phaidon Press; and Mary O’Hara-Devereaux (2004). Navigating the Badlands: Thriving in the Decade of Radical Transformation. San Francisco: Jossey-Bass. ‡‡ The bipartisan California Economic Strategy Panel was established in 1993 to develop an overall economic vision and strategy to guide California State government and regional public policy. The Panel engages in an objective and collaborative biennial planning process that examines economic regions, industry clusters, and cross-regional economic issues. See: http://www.labor.ca.gov/panel/

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Another 37 percent came from expansion of existing firms. Less than 1 percent came from businesses moving into the state. Historically, small California firms have been among the top national performers in terms of growth and sales.42 Small firms tend to fail more frequently than larger firms, but once they grow they tend to survive with the most dynamic companies creating the most jobs. Many of these characteristics apply to manufacturing firms in California too. 43 Many small manufacturers sell the bulk of their production to one or two large regional or global firms. Many sell their products locally or regionally. There are several types of large- firm small-firm relationships:44 • Non-dependent subcontracting in which a subcontractor provides entire subassemblies

such as a completely assembled car door; • Subcontracting by a single firm for specific parts or services; and • Participation in a business network or supply chain where a number of firms provide a

product cooperatively. A California Strength is her Small and Medium Sized Manufacturing Firm’s Connections with Global Supply Chains Multinational enterprises provide and control a very large portion of the world’s trade and services.§§ A significant portion of this trade flows among supplier and service networks that include increasing numbers of small and medium sized manufacturers. In 1999 more than 40 percent of U.S. imports, and 35 percent of U.S. exports, flowed between parent companies and their subsidiaries. As multinational enterprises move toward acquisition of firm-specific technological capabilities, they are tending to rely on extensive contacts and networking with external sources of expertise and innovation, particularly in smaller firms. These relationships vary by industry and often by firm within an industry. Product distribution, particularly software, is moving rapidly to private networks or to the Internet. Worldwide sales of both consumer products and business services over the Internet will be an estimated $300 billion to $1 trillion in the first decade of the twenty-first century.45 U.S. small businesses (under 100 employees) are a major force in Internet buying and selling. Recently, 2.8 million US small businesses spent $25 billion for goods and services over the Internet. Business-to-business (B2B) spending, which tops online consumer spending, is driven by two main opportunities: cost savings through more efficient internal operations and trading exchanges (buying and selling goods).46 Trade networks are organized and controlled by an increasingly small number of multinational enterprises. Five firms control more than 50 percent of the global market in the following industries: consumer durables, automotive, airlines, aerospace, electronic components, electronics, and steel. Another five firms control over 40 percent of the global market in oil, personal computers, and media.47

§§ Adapted from: Gus Koehler (1999). California Trade Policy. California Research Bureau.

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Multinational enterprises such as those that dominate the above markets differ according to: • The direction of movement of their products (from a foreign to a domestic

economy is one example). • The regional or global reach of their markets. • The location of their research, production and other facilities. • The type of product they produce, be it natural resource products, manufactured

goods, or services.

Cultural links to a multinational company’s culture of origin can provide an important competitive advantage to small suppliers who wish to develop a networked relationship. Production-sharing involves the distribution of production processes to different global locations based on inherent efficiencies (such as labor costs or skills), reduced cost of production inputs, or improved access to local markets. Typically, U.S. companies retain the research and development, and the capital-intensive production of parts or assembly, while outsourcing labor-intensive operations to a suitable foreign location. Such relationships require careful networking, rapid digital communications and production coordination, and excellent air and sea port facilities to achieve just-in-time parts delivery.48 As we will show below, these relationships are becoming much more complex due to advanced manufacturing techniques, and changes in materials used for manufacturing, and logistics. California’s firms are particularly strong in investing in manufacturing industries that use global production sharing, especially in Asia.49 The level of foreign firm investment in California manufacturing is also high, particularly in wholesale trade, information industries, such as publishing, motion pictures, and data processing; professional, scientific, and technical services; and in construction and transportation. Exports supported almost 28 percent of California manufacturing workers. For the rest of the United States, this figure is less than 19 percent. Such international connections are strengthened by business established by immigrants who tend to maintain and improve links with their country of origin’s business sector. Nearly every California manufacturing sector supports a higher proportion of their workers through exports than the same industries in the rest of the United States. For example, perhaps as many as half of the manufacturing firms in Los Angeles export their products.50 Clearly, for California, small and medium sized company production is closely tied to logistics, including the Internet, that are, in turn tied to supply chains and markets around the world. Rarely is a single company—be they large or small—best from a global perspective in every function. This is a competitive issue for small and medium sized specialized manufactures that utilize unique production methods and materials. With the right partnering and flexible networking, the resulting global virtual organization can find and pool the necessary talent and resources to ensure global first-mover advantage or other competitive positioning.

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Major corporations are already sophisticated internationally in terms of their facilities and customer base, finding or creating these partners, understanding international law, buying research capabilities, and negotiating agreements. Intel’s recent investment of $1 billion in India, including creation of a venture fund or India’s recent agreement with Canada to jointly create nanomedicine products are good examples.51 Another is Cisco Systems putting $750 million into R&D in its Indian facilities, its plan to create a $100 million Indian seed investment fund, and to provide $10 million for rural connectivity. Microsoft is investing $1.7 billion in India too. The goal is to take advantage of emerging low cost production operations and to purchase new innovative firms that will be serving the Indian market (Microsoft is developing a new Indian language based Windows to compete against Lynx for example.) For a small to medium-sized company, however, gaining global competitive advantage by direct investment is not possible. Successful participation by California’s small to medium-sized companies in global supply chains that link to India and China for example, are pivotal for California. Global partnering through various networks is possible for these companies using international organizations like Intelligent Manufacturing Systems.52 California’s small and medium sized companies will have to become part of a “Global swarm.” Rather than a single enterprise with all of its functions embedded in it production processes, the “global virtual enterprise” will be dispersed, with smaller “…units everywhere all working for the collective, or swarm. An automobile company now has suppliers making parts and subsystems all over the world and many research and design functions done remotely, but still controlled by the “swarm.””53 Logistics, information systems, organized into supply chains, for example, provide a competitive advantage by efficiently linking a firm to the “swarm”. Advanced manufacturing techniques (discussed below) allow production equipment to rapidly produce more and different localized consumer centered products for clients anywhere in the world.54 Increased Numbers of Minority Owned California High Tech Start-ups with International Ties is a Competitive Advantage A second change is taking place in high-technology innovative start-up and firm ownership in both Northern and Southern California. For Northern California, AnnaLee Saxenian points out that:55

When local technologists claim that “Silicon Valley is built on ICs” they refer not to the integrated circuit but to Indian and Chinese engineers. Skilled immigrants account for at least one-third of the engineering workforce in many of the region’s technology firms and they are increasingly visible as entrepreneurs and investors. This case has relevance beyond the region. As the center of technological innovation as well as the leading export region in California, Silicon Valley serves as a model and a bellwether for trends in the rest of the state.

Saxenian goes on to point out that in1998, Chinese and Indian engineers were senior executives at one-quarter of Silicon Valley’s new technology businesses. “These immigrant-

25

run companies collectively accounted for more than $16.8 billion in sales and 58,282 jobs in 1998.”56 Start-ups by Chinese and Indian immigrants accelerated during the 1990s. These businesses also established far reaching business ties to Asia due to their language skills and cultural sensitivity. Such contacts continue to be developed for Nanotechnology and MEMS. For example, Shanghai National Engineering Research Center for Nanotechnology Co. Ltd. has Silicon Valley ties with Stanford, Stanford NanoFab, & UC Berkeley, and Sp3 Inc. in Mountain View. The CEO of Shanghai National Engineering Research Center for Nanotechnology Co. Ltd. is Dr. Jie Han, was formerly the technical director and manager of the NASA-Ames Center for Nanotechnology.57 In recent years there has been a significant rise in Mexican foreign investment in manufacturing, primarily in Southern California. “In 1993, the year before NAFTA started, Mexican-invested affiliates in California employed about 5,900 workers. By 2000, that figure had risen to an estimated 9,700 workers…. Likewise, the value of property, plant, and equipment (PPE) owned by Mexican-invested affiliates rose over the same period, from $750 million to an estimated $1.1 billion.”58 Most of this investment occurred along the border close to where the parent investing companies were located: 72 percent of Mexican-owned subsidiaries in California are in Imperial and San Diego Counties. This California-Mexico economic integration through supply chains is particularly important because it involves production-sharing between the two countries. California investors favor investment in manufacturing in Mexico over the rest of the world. The following charts show where Mexican-owned subsidiaries are located in California and California-owned subsidiaries are located in Mexico.

Graph 6

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Like the Asian connection, the Mexican connection works, not just because of proximity, but also because of scientific, language and cultural strengths exist on both sides of the border. The Growing Number of Minority Owned Manufacturing Firms is Increasing California’s Future Potential to Establish new Global supply Chains and Markets Right now, the vast majority of all types of business with employees (not just manufacturing) are owned by White Californians (75.8 percent), followed by Asian (15.3 percent), with Hispanics a distant third (7.1 percent) (Graph 7). In 2002, White owned businesses

Graph 7

Chart: California Business Ownership and Employmen t by Ethnicity (2002)

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

90.0%

Hispanic White Black AmericanIndian and Alaska

Native

Asian

Per

cent

of a

ll fir

ms

Percent all Firms Percent Firms w ith Employees Percent Employees

Source: 2002 Survey of Business Owners, U.S. Census Bureau.

employed 6.1 million workers; Asian owned 762 thousand, and Hispanic firms employed 447 thousand workers. This profile is also probably true of manufacturing firm ownership (only U.S. figures are available) and company earnings as shown in Graph 8.

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Graph 8

Graph : U.S. Manufacturing Ownership and Employment by Ethnicity (2002)

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

90.0%

100.0%

H

ispa

nic

W

hite

B

lack

A

mer

ican

Indi

an

A

sian

Haw

aiia

n an

d

Pac

ific

Isla

nder

All Firms Percent

Firms w ith Employees Percent

Percent of Employees

Source: 2002 Survey of Business Owners, U.S. Census Bureau.

The share of all types of businesses owned by minorities rose from 6.8 percent of all U.S. businesses in 1982 to 15.1 percent in 1997. In California, the share of business owned by Hispanic firms, for example, increased from 336 thousand in 1997 to 427 thousand in 2002, a 27 percent increase in five years.

Graph 9

Graph: Number of California Hispanic Owned Busine sses 1997 & 2002

336,405

427,805

51,682 57,835

0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

450,000

1997 Firms 2002 Firms 1997 Sales/ 2002 Sales/

Num

ber

of F

irms

& S

ales

(x

1 m

illio

n)

Source: Small Business Administration (2002), Survey of Business Owners. Data include firms with paid employees and firms with no paid employees. 1997 Survey of Minority-Owned Business Enterprises. Data include firms with paid employees and firms with no paid employees.

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Despite these increases, minority-owned firms generally had lower survival rates than non-minority-owned firms. Even so, minority-owned firms that survived had higher expansion rates and lower contraction rates than non-minority-owned firms. Most important, while there was an overall loss of employment in 1997, firms owned by Hispanics and by American Indians and Alaska Natives offered a significant increase in new jobs from the 1997-2001.59 Only five percent of all US firms are located in Hispanic neighborhoods where California’s future workforce predominantly resides. Of this small number, only a little over half are located in economically distressed Hispanic areas. About 24 percent of Hispanic-owned firms and about 21 percent of Hispanic-owned firm employment are in Hispanic neighborhoods. Looking at more rapidly growing firms, about 48 percent of Hispanic owned fast growing or “Gazelle” firms are in non-Hispanic neighborhoods. Only 19 percent of Hispanic owned Gazelles and 18 percent of their employment are in a Hispanic neighborhood.60 This information suggests a number of things. First, an integrated EWDP approach involving the SBDCs, CACTs, and other Initiatives could provide assistance that would help to stabilize the companies. Second, while entry level workforce training programs may be located near students, continuing education programs for workers may need to be located close to or in businesses that are located outside of ethnic neighborhoods. Business location also raises questions about job recruitment and placement given potential travel distances between lower income neighborhoods and a good paying job. Latino Manufacturers Mexico MEMS/Nanotechnology Initiative Mexico is moving decisively ahead to capture new technology. Created by the Me'xico-Estados Foundation United for Ciencia (FUMEC), with supports of the Secretariat of Economy, the Center of Productive Joint in MicroTecnología (CAP-mems) Mexico’s MEMS initiative is an effort to align with the global design, development, encapsulation and commercialization of MEMS and nanotechnology research, product development and manufacturing. At the moment, Mexico is collaborating with New York, New Mexico, and Texas but not California. Mexico is developing 11 Centers of Design MEMS. The plan calls for attracting national or foreign Investors; academic organization that can reorient their capacity and develop international collaborations with Mexican Universities to help develop cross-border MEMS supplier chains. Already, an "Agreement of Intention" relating to the use of MEMS in the electrical industry has been signed. "Mexico and the United States can generate regional abilities competitive [sic], particularly if they focus in specific niches where Mexico can complement abilities of the United States to accede to national and global markets". The goal in the agreement is to assure that Mexican companies in the electrical sector and companies in the United States collaborate to develop opportunities that apply MEMS to the electrical sector. It is ironic that California is not involved in these efforts despite the state’s leadership in research and private sector development. Manufacturing Training in Mexico

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The World Bank studied manufacturing in Mexico in 2003.61 While the study does not look at high-technology manufacturing, it does provide useful insights about how this emerging California manufacturing group views training. Table 2 shows that product exports are becoming more important, as is investment in research and development, and the adoption of new technology.

Table 2

Source: Gladys L6pez-Acevedo (2003). Wages and Productivity in Mexican Manufacturing. The World Bank Latin America and the Caribbean Region Economic Policy Sector Unit.

Workforce training in Mexico is strongly related to the size of the firm, with only 10 percent of micro firms training their workforce compared to 29 percent of small firms, 47 percent of medium sized firms and 58 percent of large firms. External training was important for micro through medium sized firms, with large Mexican firms depending more on in-house training (Table 3). Different size Mexican firms seem to benefit in different ways from training, with worker’s wages in smaller firms benefiting the most. Are rates of return to training associated with complementary investments in technology? Training only has a positive effect in certain types of technology adoption. For example, combining in-house training with the acquisition of new numerically controlled computerized machinery increases

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productivity by 44 percent. both employees and employers benefited the most from external training. The wage return, from in-house and external training was positive in 1999, but whereas in-house training only increased wages by 4 percent, external training increased wages by 26 percent.62

Table 3

As we will see in a moment, many of the training issues that small Mexican firms face are also faced by small California and US firms.

Small and Medium Sized Manufacturing Firm Competitiveness Issues The evolution of manufacturing in California and the US has not been ignored. Studies identifying what should be done to improve small and medium sized manufacturers competitiveness have identified a number of issues including: advanced manufacturing and production technology; and advanced manufacturing and production workforce skills and training. Industry or sector specific surveys have also been done including two completed by Time Structures specifically for this study: California Latino manufacturers technology and workforce skills and training needs; and California nanotechnology and MEMS manufacturing firm technology and workforce skills and training needs. Taken together, a picture emerges showing the tight relationship between basic research, technology transfer, product development, productivity improvements, workforce training, “global swarming”, logistics, and information technology will determine small and medium sized manufacturing firm competitiveness. One of the more important findings of these studies is that small manufactures don’t train their employees. A 2001 National Association of Manufactures survey found that:63

Sixty-one percent of the respondents said they spend one percent or more of their payroll on training for both hourly and managerial employees; one third (33 percent)

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spent two percent or more; and 17 percent spend three percent or more. …Most training (62 percent) is done in-house. The top three sources for outside training are vocational/technical schools (46%); business associations (46%) and community colleges (45%).

A California survey of 3,000 small manufactures makes similar findings. This survey noted that identifying and adopting new technology, including information technology, were critical issues for Los Angeles area manufacturers.64 Taken together, training and technology adoption issues suggest that it may be difficult for existing manufactures to migrate to nanotechnology and advanced manufacturing related process without technology transfer and workforce training help from the CACTs and other EWDP initiatives. State and National Manufacturing Competitiveness Studies Promote Advanced Manufacturing Over the past seven years eleven studies have been conducted by various state and federal research groups analyzing the competitiveness of US’ and California’s manufacturing. The immediate and continuing economic challenges being faced by the United States and California are best described in a joint 2005 study by the National Academy of Sciences, the National Academy of Engineering, and the Institute of Medicine of the National Academies. Their joint statement deserves a lengthy quote:65

Having reviewed trends in the United States and abroad, the committee is deeply concerned that the scientific and technical building blocks of our economic leadership are eroding at a time when many other nations are gathering strength. We strongly believe that a worldwide strengthening will benefit the world’s economy—particularly in the creation of jobs in countries that are far less well-off than the United States. But we are worried about the future prosperity of the United States. Although many people assume that the United States will always be a world leader in science and technology, this may not continue to be the case inasmuch as great minds and ideas exist throughout the world. We fear the abruptness with which a lead in science and technology can be lost—and the difficulty of recovering a lead once lost, if indeed it can be regained at all. This nation must prepare with great urgency to preserve its strategic and economic security. Because other nations have, and probably will continue to have, the competitive advantage of a low-wage structure, the United States must compete by optimizing its knowledge-based resources, particularly in science and technology, and by sustaining the most fertile environment for new and revitalized industries and the well-paying jobs they bring.

The following list summarizes advanced manufacturing methods, logistics, productivity and workforce training options offered by these studies:***

*** These options emerge from this analysis and are also pulled together from a number of manufacturing studies used in this report including: National Research Council (1998). Visionary Manufacturing Challenges for 2020. Washington, DC.; National Coalition for Advanced Manufacturing (2003). Expanding California’s Prosperity: Policy Options to Strengthen California Manufacturing. Washington, DC; Bay Area Economic

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Production:

• Achieve concurrency in all operations. • Integrate human and technical resources to enhance workforce performance and

satisfaction. • Develop the capability to “instantaneously” transform information gathered from a

vast array of diverse sources into useful knowledge for making effective design, production, and logistic decisions.

• Reduce production waste and product environmental impact to “near zero.” • Develop the capability to reconfigure manufacturing enterprises rapidly in response to

changing product designs, time constraints, and emerging opportunities. • Develop innovative manufacturing processes and products with a focus on decreasing

dimensional scale. • Assist small and medium sized companies with identifying and adopting energy

conservation technologies. • Assist small and medium sized manufacturers in industries that have not used high-

technology in the past, such as food processing, to identify and • Adopt technologies that will give them competitive advantage in their industry.

Standards and Training:

• Expand Cooperative Technical Assistance Programs to establish and implement production and other global standards.

• Provide continuous life-long training for California’s workforce that is consistent with matrix and vertical career ladders.

• Develop a “pipeline” that connects and motivates high school and college students to choose manufacturing as an occupation.

• Address the need for improved English engineering language skills by designing ESL programs for workers that suit small and medium sized manufacturer’s needs.

• Align training courses with manufacturer’s work and training schedules, and worker transportation requirements to go to a training sight.

• Provide integrated training programs for workers throughout a supply chain. Forum (2005). One Million Jobs at Risk: The Future of Manufacturing in California. San Francisco; California Regional Economies Project (2004). Manufacturing in Transformation: Economic Change and Employment Opportunities in the Design, Production, and Logistics Value Chain. Sacramento; Committee on New Directions in Manufacturing, National Research Council (2004) New Directions in Manufacturing: Report of a Workshop. Washington, DC; National Association of Manufacturers (2003). Keeping America Competitive: How a Talent Shortage Threatens US Manufacturing. Washington, DC; Committee on Bridging Design and Manufacturing, National Research Council (2004). Retooling Manufacturing: Bridging Design, Materials, and Production. Washington, DC; Committee on New Directions in Manufacturing, National Research Council (2004).New Directions in Manufacturing: Report of a Workshop. Washington, DC; Los Angeles County Economic Development Corporation (2005). Manufacturing in Southern California. Los Angeles; US Department of Commerce (2004). Manufacturing in America: A Comprehensive Strategy to Address the Challenges to US Manufacturers. Washington, DC.; National Research Council (1998). Visionary Manufacturing Challenges for 2020. Washington, DC.

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Training Networks:

• Support the integration and coordination of the CACTS with a newly coordinated Manufacturing Extension Partnership that are integrated in a statewide and National Virtual Network of Centers of Manufacturing Excellence.

• Explore new avenues for leveraging the unique capabilities of California’s national laboratories, colleges, and universities for the benefit of small and medium sized manufacturers, including technology transfer and support for new start-ups.

State and Global Supply Chains

• Develop in-state supply chains to encourage emerging technologies such as MEMS, Nanotechnology and the life sciences to use California suppliers and services.

• Integrate production improvement strategies with logistics requirements such as product tracking.

Texas’ state economic development experts, in a study of “Advanced Technologies and Manufacturing,” recognize these changes, and identified several converging technologies that they recommend that Texas concentrate on. (Keep in mind that Texas is second to California in average manufacturing employment.)66 These are:67 Nanotechnology, advanced materials,

micro-electromechanical systems (MEMS), semiconductors, robotics, wireless (GPS, GIS, smart networks), and power generation.††† This list and the California Community College’s Economic and Workforce Development Program technology priorities are consistent with Texas’ list and that identified by the National Science and Technology Council, Interagency Working Group on Manufacturing Research and Employment which are: intelligent and integrated manufacturing, manufacturing and hydrogen, and nano-manufacturing. For California, it is the convergence of these technologies along with digital manufacturing, information processing technology, biotechnology, intellectual property created by a trained workforce, and integration of the whole system with logistics, that will confer a product and productivity advantage for California.

††† All but two of these technologies are being addressed by studies that have been or are currently being conducted for the Community Colleges by Time Structures.: “Training California’s Workforce for 21st Century Transportation Vehicles and ITS Infrastructure,” Advanced Transportation Technology Initiative, California Community Colleges; “California Community Colleges: Technical Training for Competitive Advantage in the Hydrogen Economy,” Advanced Transportation Technology Initiative, California Community Colleges; and “Requirements for Digital Manufacturing,” Applied Competitive Technologies, California Community Colleges.

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Advanced Manufacturing Workforce Projections The Bay Area Economic Forum in its study, “One Million Jobs at Risk: The Future of

Table 4

Source: Bay Area Economic Forum (2005). One Million Jobs at Risk: The Future of Manufacturing in California. http://www.bayeconfor.org/

Manufacturing in California,” forecasts that a substantial number of manufacturing jobs will be lost to California if manufactures and the state continue with “business as usual.” Looking at the report’s recommendations that are relevant to this study, companies should:68

• Focus on delivering more customer value and quality (for instance, through more rapid delivery and product customization) rather than just lowering costs.

• Deploy world-class manufacturing techniques to shorten time involved in supply chains, lower costs, and increase timely delivery.

The study recommended that the State government should: “Support state universities, community colleges, and vocational institutions in providing more and better-coordinated workforce training programs, to ensure that California companies have access to a labor force with the skills needed to compete with other states and other countries.” A second set of recommendations suggests that the State develop a manufacturing strategy that focuses on sectors that are likely to prosper in California. This analysis, in our opinion, can also be used to project likely sector’s experiencing job growth.

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Figure 2

Source: Bay Area Economic Forum (2005). One Million Jobs at Risk: The Future of Manufacturing in California. http://www.bayeconfor.org/ Going to the far right of Figure 2, we find that auto research and development, semiconductors, pharmaceutical research and development, and biopharmaceuticals are sectors that are likely to see job growth. All of these sectors, except semiconductors (MEMS and Nanotechnology will revolutionize this sector in the near future so it should be included here), are all priority workforce training areas for the Economic and Workforce Development Program.‡‡‡

The Labor Market Information Division, Employment Development Department (LMID), has made employment projections for manufacturing. Many of manufacturing jobs included in these projections will be using advanced manufacturing tools and systems in the future (Table 5). Each year an average of 65,680 manufacturing jobs in design, production and logistics will open up. The projections do not include biotechnology, medical device, pharmaceutical, and MEMS/Nanotechnology jobs that are expected to develop over the coming years.§§§

‡‡‡ See: Time Structures (2005). Training California’s New Workforce for Nanotechnology, MEMS, and Advanced Manufacturing Jobs. Economic and Workforce Development Program, California Community Colleges. §§§ Biotechnology and MEMS/Nanotechnology projections are made in the Time Structures (2005). Training California’s New Workforce for Nanotechnology, MEMS, and Advanced Manufacturing Jobs. Economic and Workforce Development Program, California Community Colleges; and in the biotechnology study for the same client.

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LMID has also projected manufacturing employment (excluding the categories just identified) for 2012 (Table 5). Starting from the base year of 2002, manufacturing generally

Table 5

Source: Labor Market Information Division, Employment Development Department (2005). Manufacturing Careers. At: http://www.calmis.ca.gov/file/occmisc/Manuf1-Intro.pdf

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Table 6

Source: Labor Market Information Division, Employment Development Department (2005). Manufacturing Careers. At: http://www.calmis.ca.gov/file/occmisc/Manuf1-Intro.pdf

is expected to grow by 26,800 (1.6 percent) from 1,638,200 to 1,665,000 in 2012. Durable manufacturing jobs are expected to grow by 22,700 jobs (2.2 percent), from 1,053,300 to 1,076,000 in 2012. These modest projections show just how important technology transfer and workforce training are to the future of these companies.

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Table 7

Labor Market Information Division (EDD): California Industry Employment Projections 2002 - 2012

Employment Numerical Percent

Industry 2002 2012 Change Change

Manufacturing 1,638,200 1,665,000 26,800 1.6%

Durable Manufacturing 1,053,300 1,076,000 22,700 2.2%

Wood Product Manufacturing 40,400 42,500 2,100 5.2%

Sawmills and Wood Preservation 7,900 7,300 -600 -7.6%

Veneer, Plywood, and Engineered Wood Product Manufacturing 6,800 8,000 1,200 17.6%

Other Wood Product Manufacturing 25,700 27,200 1,500 5.8%

Nonmetallic Mineral Product Manufacturing 46,000 50,300 4,300 9.3%

Cement and Concrete Product Manufacturing 20,800 24,400 3,600 17.3%

Other Nonmetallic Mineral Product Manufacturing 25,200 25,900 700 2.8%

Primary Metal Manufacturing 26,900 26,600 -300 -1.1%

Fabricated Metal Product Manufacturing 147,000 151,100 4,100 2.8%

Forging and Stamping 10,200 11,700 1,500 14.7%

Architectural and Structural Metals 35,400 39,800 4,400 12.4%

Boilers, Cutlery, Hardware and Wire Product Manufacturing 21,200 20,900 -300 -1.4%

Machine Shops and Threaded Product Manufacturing 39,100 39,800 700 1.8%

Coating, Engraving, and Heat Treating Metals 20,500 20,100 -400 -2.0%

Other Fabricated Metal Product Manufacturing 20,600 18,800 -1,800 -8.7%

Machinery Manufacturing 92,700 91,900 -800 -0.9%

Agriculture, Construction, and Mining Manufacturing 5,500 5,600 100 1.8%

Industrial Machinery Manufacturing 18,600 16,900 -1,700 -9.1%

Commercial and Service Industry Machinery Manufacturing 20,800 21,100 300 1.4%

HVAC and Commercial Refrigeration Equipment 6,800 7,000 200 2.9%

Metalworking Machinery Manufacturing 13,600 13,600 0 0.0%

Turbine and Power Transmission Equipment Manufacturing 6,400 6,900 500 7.8%

Other General Purpose Machinery Manufacturing 21,100 20,800 -300 -1.4%

Computer and Electronic Product Manufacturing 360,100 365,100 5,000 1.4%

Computer and Peripheral Equipment Manufacturing 71,700 67,200 -4,500 -6.3%

Communications Equipment Manufacturing 33,900 35,700 1,800 5.3%

Audio and Video Equipment Manufacturing 8,800 9,400 600 6.8%

Semiconductor and Other Electronic Component Manufacturing 122,800 126,400 3,600 2.9%

Electronic Instrument Manufacturing 112,000 115,100 3,100 2.8%

Magnetic Media Manufacturing and Reproducing 10,900 11,300 400 3.7%

Electrical Equipment, Appliance, and Component Manufacturing 39,900 39,100 -800 -2.0%

Electric Lighting Equipment Manufacturing 13,100 13,700 600 4.6%

Electrical Equipment Manufacturing 10,700 9,900 -800 -7.5%

Other Electrical Equipment and Component Manufacturing 16,100 15,500 -600 -3.7%

Transportation Equipment Manufacturing 137,600 141,500 3,900 2.8%

Motor Vehicle Manufacturing 8,500 9,300 800 9.4%

Motor Vehicle Body and Trailer Manufacturing 9,900 11,000 1,100 11.1%

Motor Vehicle Parts Manufacturing 24,500 23,900 -600 -2.4%

Aerospace Product and Parts Manufacturing 79,600 79,600 0 0.0%

Ship and Boat Building 9,000 10,800 1,800 20.0%

Other Transportation Equipment Manufacturing 6,100 6,900 800 13.1%

Furniture and Related Product Manufacturing 68,400 69,800 1,400 2.0%

Household and Institutional Furniture Manufacturing 45,400 45,500 100 0.2%

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Labor Market Information Division (EDD): California Industry Employment Projections 2002 – 2012 (Contu ed)

Office Furniture and Fixtures Manufacturing 15,700 16,400 700 4.5%

Other Furniture and Related Product Manufacturing 7,400 7,900 500 6.8%

Miscellaneous Manufacturing 94,400 98,100 3,700 3.9%

Medical Equipment and Supplies Manufacturing 50,200 52,100 1,900 3.8%

Other Miscellaneous Manufacturing 44,200 46,000 1,800 4.1% Source: LMID http://www.calmis.ca.gov/file/indproj/Cal$IndProj.xls

Manufacturing Improvement and Workforce Training Services Pay Off

Koehler reviewed evaluations of Manufacturing Improvement Services, and workforce training in a 1997 California Research Bureau study and found the following:69 • Federal Reserve Bank San Francisco Weekly Letter: “[I]t appears that if a state development agency increased its annual expenditures per worker by $10.00 over the current mean of $10.67 [in contrast California spent almost $5 per worker in 1993], in other words, roughly doubling state development expenditures, then manufacturing jobs in that locality would increase by 1 1/6 percent per year.” • U.S. General Accounting Office (GAO) 1995 the national survey of 766 manufacturers who had received NIST manufacturing improvement services: “...[M]ost respondents reported that the assistance had positively affected their use of technology in the workplace, the quality of their product, and the productivity of their workers. Between 44 percent and 63 percent of respondents reported that [Manufacturing Excellence Program] assistance had positively affected certain specific indicators of their business performance, such as their customer satisfaction, their profits, and their ability to meet production schedules. • Dunn and Bradstreet 1994 survey of 750 small and medium sized manufacturers who had received NIST manufacturing improvement services (MEP): “...[small and medium sized manufacturers] served by MEP centers are up to six times more likely to organize specific improvement actions than small- and medium-sized manufacturers of similar size, type of operation and unit volumes not assisted by a center.” • According to NIST, the seven Manufacturing Technology Centers (MTC) founded between 1989 and 1992 provided 12,350 services, including 2,885 technical assistance projects, to over 10,000 small and medium sized manufacturers. Firms that provided evaluation data said that they expected each technical assistance project “on average” to result in:

o $191,473 in increased sales; o $17,518 in reduced inventory; o $23,776 in savings from labor and material costs; and o five jobs created or preserved. o Manufacturing firms reported total economic benefits of almost $7 for every

federal dollar that the centers received.

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• In 1996 the Battelle Memorial Institute completed a cost-benefit study of Ohio’s Edison Technology Centers and estimated that the Centers generated a direct economic impact for Ohio of more than $730 million from 1992 to 1995. Applying an economic multiplier, the total impact on the state’s domestic product was $1.27 billion. State funding over the three year period was about $70 million. An estimated 5,600 jobs were created or retained, resulting in $169 million in personal income. Company sales were increased by $110 million. Workforce Training • Bartik writes that: ...when the job training is tied to a firm’s efforts to upgrade its technology, government grants for customized job training can be effective in improving productivity. In their study of a Michigan grant program for technology-related training, Harry J. Holzer and his colleagues found that product scrapage rates went down significantly more in assisted firms than in comparable unassisted firms--enough so that the program’s economic benefits exceeded the costs of the training grants. • A 1995 study by Maani, Putterill, and Sluti found that: The study has been able to show empirically that in manufacturing companies, improving quality [TQM and other quality training] positively enhances operational performance and productivity, and certain indicators of business performance. The association is most pronounced between quality and process utilization, with the second largest impact of quality being on manufacturing costs.

Time Structures’ Survey of Manufacturers

Two hundred manufacturing executives were interviewed by telephone and asked their opinions on rates of development and deployment of current and future technologies used in manufacturing. Respondents spoke to current and future training and educational needs in deploying and maintaining those technologies. This report includes the results of these interviews and an analysis of all responses (Attachment 2). In addition, an extensive list of verbatim comments is (see Attachment 3) in response to a question about the role that community colleges should take in recognizing and responding to new training needs. The survey findings are meant to assist the CACT with anticipating current and future curriculum and content development. Attachment 4 provides links to other state advanced manufacturing training programs. Attachment 5 provides LMID information about their projected manufacturing occupations and required skills.

Respondent Characteristics Participants in this study are mostly small manufacturers. Over three-quarters, (76%), employ 50 employees or less. Eighteen percent (18%) employ between 50 and 200 employees, and only 7% employ more than 200 employees.

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Most are designer-builders. Forty-two percent (42%) design and build a final product, 34% are job shop contractors. Twenty-four percent (24%) put themselves in a category, labeled "Other," which in many cases means they are both, job shop contractors and designers-builders. Most respondents (86%) produce an end product. Three-quarters (76%) of job shop contractors produce a finished product, and 96% of the final product designers and builders produce a finished product. Seventy-nine percent (79%) of the respondents who put themselves in the "Other" category also produce a finished product. Just over half of all respondents (56%) produce sub-assemblies or parts. Almost three-quarters (74%) of the job shop contractors produce subassemblies or parts, and about half (52%) of the final product designers and builders produce subassemblies or parts. Thirty-eight percent (38%) of those in the "Other" category produce subassemblies or parts.

Table 8: Respondent Characteristics (R = Row percent, C = Column Percent)

Produce End Product? Produce Parts? Percent of Sample that

was: Yes No Yes No

Row or Column Percent

Job Shop Contractor

34%

76% 30%

24% 55%

74% 45%

26% 20%

R C

Design & Build 42%

96% 47%

4% 10%

52% 39%

48% 45%

R C

Other 24%

79% 22%

21% 34%

38% 16%

63% 34%

R C

Total 100%

86% 100%

15% 100%

56% 100%

44% 100%

R C

Some participants report that they use major supply chains, but most do not. Sixty-five percent (65%) of respondents are not currently part of a major supply chain and almost everyone in that sub-group (78%) said they have no plans to become a part of a supply chain in the near future. Thirty six percent (36%) say they are in major supply chains, about half of which are national in scope (46%) and about half international in scope (54%). California will continue to be home. When asked "Will you be manufacturing in California in three to five years?" respondents overwhelmingly answered "Yes." Eighty-four percent (84%) were certain of it, 8% said "no" and 9% were uncertain. Among those who are moving, however, certain themes were universal:

• "Workman's compensation is way too high in California. Also, liability." • "California is not business-friendly."

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• "We are sending all our work to Mexico or China. We should be out by January." • "It costs too much to manufacture here."

Business Sectors Respondents belong to the following, overlapping business sectors****

Table 9: Business Sector Number Percent Electronics & Electrical Equipment 49 24.5 Information Technology, Computers & Related Hardware 26 13.0 Nanotechnology 2 1.0 Biotechnology 5 2.5 Transportation 24 12.0 Industrial Machinery 52 26.0 Chemicals & Plastics 23 11.5 Diversified Manufacturing 42 21.0 Software 5 2.5 Communications, Navigation & Related Equipment 5 2.5 Aerospace 24 12.0 Apparel Manufacturing 2 1.0 Printing and Other Duplicating 5 2.5 Furniture 3 1.5 Toys 0 0.0 Other 41 20.5 Total 308 100.00

The category "other" includes:

Aerosol products Appliance components Beauty products Boats Building construction Concrete mixer replacement parts Convertible tops Counter tops Door hardware Drill and tap

Hot rod aftermarket suspension Lamp shades Logistics-related products and services Medical and sporting goods Medical devices, tools for surgery (3) Medical optical devices Metal parts for consumer products Metal stamping and tool and die Motor cycle products Natural gas distribution products

**** Manufacturing companies are often engaged in two or more areas, such as: electronics and electrical equipment together with information technology; electronics and electrical equipment together with industrial machinery; industrial machinery together with chemicals and plastics; industrial machinery together with diversified manufacturing.

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(“Other” Continued) Electrical signs Engineering services Financial services Fireplaces Food Glass Hammers and clamps Hardware for builders

Optics Refrigeration Semi-conductor laser Sheet metal and subparts Subassemblies Tile Trophies

Seven industry sectors were most frequent. To reduce the complexity of the above-going list, major questions and themes of interest to this study are examined by the seven most dominant manufacturing fields. Note the predominance of the first three fields: 1. Industrial Machinery (n = 52) 2. Electronics & electrical equipment (n = 49) 3. Diversified manufacturing (n = 42) 4. Information technology, computers, & related hardware (n = 26) 5. Aerospace (n = 24) 6. Transportation (n = 24) 7. Chemicals and Plastics (n = 23) Most Significant Technologies Current Technologies Respondents were asked which of 15 technologies are most significant to manufacturing processes today. Lean manufacturing technologies such as quality improvement and problem solving, are the most significant current technologies for all manufacturing sectors combined (38% overall). These technologies were ranked as highly significant by respondents in each of the seven most prominent industry sectors. Chemical and plastic manufacturers rank them more highly than other sectors but aerospace follows, with diversified manufacturers and manufacturers of industrial machinery not far behind. Collaborative and/or concurrent engineering technologies are the second most popular technologies today (33% overall). Inspection shows that manufacturers of chemicals and plastics rank it highly. Manufacturers of industrial machinery and manufacturers of electronics and electrical equipment also give these technologies high marks. Again, each of the top seven industry segments mentioned this one. ISO 9000, and other related certifications are the third most significant technologies of the day (31% overall), especially in the eyes of aerospace manufacturers (one aerospace

44

respondent said it is required) with transportation and diversified manufacturing following closely. The other five sectors also recognize the current significance of these technologies. Security for technology or IT software and data (28% overall) is also an area of current significance to all the manufacturing sectors studied. Electronics and electrical equipment manufacturers rank security directly behind lean manufacturing and collaborative/concurrent engineering. Other technologies of significance today, especially for the chemicals and plastics manufacturing sector, are: Supply chain management (23% overall and 35% for manufacturers of chemicals and plastics); equipment and software to reduce scrap (23% overall and 48% for manufacturers of chemicals and plastics); and energy use and energy conservation technologies (22% overall and 39% for manufacturers of chemicals and plastics). Only 16% of all respondents said manufacturing-related simulations and visualization technologies are highly significant for them today but 33% of aerospace manufacturers say these technologies are important. A respondent from another sector said they will be looking into simulations in the near future. Technologies that received the lowest significance rating for manufacturers today include: Enterprise management technologies (8% overall even though it was said that people are using it on a daily basis); MEMS (Micro-Electro-Mechanical Systems) and related technologies (7% overall, but one respondent said it could be highly significant within the next few years); Green design, life-cycle manufacturing, cradle to grave design (low environmental impact) technologies (5% overall); product lifecycle management technologies (4% overall, but it was said to be very difficult to project into the future); biotechnology and bioinformatics and related technologies (2% overall). None of the manufacturers in this study are currently working with nanotechnology-related manufacturing technologies. Future Technologies Respondents were asked to identify which of the same 15 technologies will be most significant to manufacturing processes a few years into the future. ISO 9000, and other related certifications, will be of most significance to all manufacturing sectors combined, but mostly for manufacturers of electronics and electrical equipment. Manufacturers of information technology, computers and related hardware gave these technologies their second highest rating, and manufacturers of chemicals and plastics gave it their third. Transportation-related manufacturers did not place value here. Manufacturing-related simulations and visualization technologies. These technologies are seen as growing in significance for transportation-related manufacturers, diversified manufacturers and information technologies. The aerospace sector values them now and will continue to value in the future.

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Lean manufacturing. These already important technologies will continue to be significant to aerospace manufacturers. Transportation, chemicals and plastics, and electronics and electrical equipment manufacturers expect these technologies to continue to be significant in a few years time. Rapid prototyping from 3D modeling. Manufacturers of industrial machinery and transportation-related products said the significance of rapid prototyping technologies will increase for them in a few years time and aerospace manufacturers say there will continue to be some significance here. But information technology manufacturers did not place value here, nor did manufacturers of chemicals and plastics. Technologies that received the lowest future ratings are, (from high to low††††): equipment and software to reduce scrap (10%); security affecting technology or IT software and databases (8%); green design, life-cycle manufacturing, cradle to grave design and low environmental impact ( 8%); supply chain management (8%) although two respondents said it would be more significant for them in the future; collaborative and/or concurrent engineering (7%); energy use and energy conservation technologies (7%); MEMS (Micro-Mechanical Systems) and related technologies (7%); product lifecycle management technologies (6%); nanotechnology ( 5%); enterprise management (4%); Other technologies mentioned:

• 9100 • specialized electronic test equipment • PLC programming • Composite materials • R & D for car parts and tool-making • Thermo-coupling technology for the gas industry • C&IC programmers • Robotics

Expected Technological Change What is the expected change in the value or significance of manufacturing technologies in the near future? Technologies showing the greatest expected increase in value are:

• Manufacturing-related simulations and visualization techniques • Low environmental impact technologies such as green design, life-cycle

manufacturing, cradle to grave design • Product lifecycle management technologies • Nanotechnology • Biotechnology and bioinformatics and related technologies

Technologies with the greatest expected decrease in value are:

†††† Percentages represent the proportion of all respondents who said these technologies will be significant to them in a few years time.

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• Collaborative and/or concurrent engineering • "Lean" manufacturing such as quality improvement and problem solving • Security affecting technology or IT software and data • Energy use and energy conservation technologies • Supply chain management • Equipment and software to reduce scrap

Workforce Skill Needs Over all of the business sectors, 58% say they are currently able to hire technicians who are adequately trained for the job, but 39% say they are not. The transportation-related sector of manufacturing has the most difficulty: 54% report that they have trouble hiring adequately trained technicians. Half of the aerospace sector (50%) agrees that finding adequately trained technicians is not easy. Manufacturers of both, industrial machinery and chemicals and plastics also find it a challenge, with 44% and 43% respectively reporting difficulty. Expertise Necessary for Current Technical Job Applicants Participants were asked to identify which of 19 kinds of expertise job candidates must have to qualify as technicians today. Multiple answers were given. ‡‡‡‡ The eleven most popular fields of expertise needed are: 1. Information technology as applied to quality management 2. Information technology as applied to computer aided design 3. Information technology as applied to materials management 4. Information technology as applied to lean manufacturing 5. Order fulfillment 6. Computer integrated technology 7. Design for manufacturability 8. Information technology as applied to basic statistics 9. Information technology as applied to waste reduction 10. Product design 11. Information technology as applied to rapid prototyping and 3D modeling Participants from two manufacturing sectors -- industrial machinery and electronics and electrical equipment -- say all eleven of these subject areas are of current importance to them when they hire technicians. Diversified manufacturers agree, except that the field of computer integrated technology received somewhat less attention from them. Since answers were standardized within industry sectors and across areas of expertise we know that these 11 subject areas are popular with all manufacturing sectors studied, not just

‡‡‡‡ Summary counts can be seen on the survey instrument, Appendix B, Question 29.

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the three largest sectors (industrial machinery, electronics, and diversified manufacturing together make up almost 46% of the total sample). Here is more detailed information on these eleven fields of knowledge or expertise: 1. 55% of all respondents said information technology as applied to quality management is a necessary expertise. Over half of all respondents singled out this technology as one they would look for in hiring a technician. Fifty four percent rated it very important and 46% rated it somewhat important (these were the only two categories made available to respondents). The three manufacturing sectors that rated this subject highest are: industrial machinery; electronics and electrical equipment; and diversified manufacturing. 2. 53% said information technology as applied to computer aided design is necessary expertise. Again, over half of all respondents identified this as a "must have" expertise, with 51% of them ranking it very important and 49% of them ranking it somewhat important. Of all of the manufacturing sectors, this subject is most important to the same three manufacturing sectors, and in the same order: industrial machinery; electronics and electrical equipment; and diversified manufacturing. 3. 47% said information technology as applied to materials management is necessary expertise. 42% said this subject is very important and 58% said it is somewhat important. This emphasis is especially true for manufacturers of industrial machinery, electronics and electrical equipment, and diversified. 4. 37% said information technology as applied to lean manufacturing is necessary expertise. Within this 37%, half (51%) said this subject is very important and half (49%) said it is somewhat important. Diversified manufacturers value this knowledge over other manufacturing segments but industrial machinery, electronics and electrical equipment and aerospace follow close behind. 5. 32% said order fulfillment is necessary expertise. Within that 32%, 64% say this knowledge is very important, and 36% say it is somewhat important. Manufacturing segments showing special interest are: Industrial machinery, diversified manufacturing, electronics and electrical equipment, and chemicals and plastics. 6. 30% said computer integrated technology is necessary expertise, and 58% of this group rated it very important while 42% rated it somewhat important. Manufacturers most interested in this kind of knowledge are: electronics and electrical equipment; industrial machinery; aerospace; and information technology, computers and related hardware. 7. 30% said design for manufacturability is necessary expertise. Within this group, respondents are split 50/50, dividing the significance of this knowledge between very important and somewhat important. Sectors showing most interest are: electronics and electrical equipment; industrial machinery, diversified manufacturing, and chemicals and plastics.

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8. 30% said information technology as applied to basic statistics is necessary expertise. 36% of this group said it is very important and 64% said it is somewhat important. Manufacturers of industrial machinery rated this knowledge more highly than other industry segments did, but electronics and electrical equipment, diversified manufacturing, and information technology, computers, and related hardware also gave it high marks. 9. 29% said information technology as applied to waste reduction is necessary expertise for technicians. 47% say it is very important and 53% say it is somewhat important. Industrial machinery, electronics and electrical equipment, and diversified manufacturers rate it most highly. 10. 28% said product design is necessary expertise in fact 61% of this group said it is very important (39% said it is somewhat important). Manufacturing segments most interested in technicians that have this knowledge are: electronics and electrical equipment, industrial machinery, and diversified manufacturing. 11. 27% said information technology as applied to rapid prototyping and 3D modeling is necessary expertise. 35% said it is very important and 65% said it is somewhat important. Manufacturers of industrial machinery place special value on this knowledge. Electronics and electrical equipment, and chemicals and plastics come in second and third, respectively. Diversified manufacturers also see this field as important to today's technicians. Other knowledge areas that received recognition are: Information technology as applied to logistics and distribution (22%); information technology as applied to supply chain management (21%); import/export (18%); information technology as applied to pollution prevention (17%); internet production coordination (16%); simulation and visualization (16%); sensors and imbedded products (12%); and security technology (10%). Technical Skills Needed in the Future The most important technical skills that technicians will need as manufacturing continues to evolve are: electronics, machines, mechanical skills, and vocational skills such as welding, instrumentation, and basic shop. Half of all respondents placed these skills among the top three most important technical skills for the future. Forty-seven percent of all respondents said computer skills, such as basic logic, IT, CAD CAM, programming, and knowledge of latest software, etc. are among the top three most important technical skills for the years ahead. Manufacturing skills such as assembly, production, manufacturing planning, quality assurance, statistical processes, and understanding of the electromechanical interface, were ranked third in importance as 22% put these skills in the top three, which means that more than one out of every five respondents mentioned them.

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More than one of six manufacturers interviewed said blueprint drafting, product and graphic design, and creative and artistic skills will be among the top three technical skills that technicians will need most. Engineering, which came up in 16% of the responses, was also mentioned by almost one in six.

Other technical skills most needed are ranked below:

• Math, specifically basic math, geometry, trigonometry and statistics (14%) • Miscellaneous certifications, licenses, college or technical degrees (12%) • Problem-solving skills, abilities in critical thinking and interpretation, and

skills in planning and/or testing (8%) • Experience with hands-on training and practical lab experience (7%) • Chemistry, knowledge of chemicals, physics, materials, plastics (7%) • Hardware such as microprocessors, circuitry, robotics, automation, etc. (7%)

Language skills were also requested by more than one in eight respondents: Six percent said basic literacy such as reading, knowledge of English, and penmanship would be among the three most important technical skills needed, and another six percent said language skill development would be needed, specifically: good communication skills, technical language skills, writing and composition skills, bilingual, knowledge of Spanish and Chinese.

Table: Needed Technical Skills

0

10

20

30

40

50

60

Electr

onic,

man

ine, v

oc.,T

rade

Compu

ter s

kills

Manufa

cturin

g skil

ls

Draftin

g, blue

prin

ts, d

esign

Engine

erin

gMat

h

Misc

skills

, tra

ining

Basic

empl

oym

ent

Table 10

50

Two people saw the need for business education such as ethics, structures, operations, import/export, finance, accounting, money management. See Appendix B, Question 22, for a more detailed presentation of these data. Personal Skills Needed in the Future With regard to personal skills, almost 40% said technicians of the future will need to understand basic employment issues. Some of the qualities mentioned include: attendance, work ethic, workmanship and productivity; desire to learn, self-motivation and self-direction; ability to follow directions and ability to work as a team. Over one in ten spoke to these same issues when asked what the technical skills might be (the question just above). Pooling responses, the number of times basic employment issues were mentioned tops 50%. Thirty percent said technicians will need language skills and 8% said they will need basic literacy. Combining those who think language and literacy will be the most important technical skill (above) with those who think language and literacy will be the most important personal skill, a whopping 50% focus on this issue. Six out of ten respondents recognized people skills as being among the top three most important personal skills that technicians will need as manufacturing continues to evolve. People skills, as applied to customer service, people/project management, leadership, and sales, was also mentioned 9% of the time when respondents were asked for the top three technical skills (above). The importance of this issue can be seen by putting answers to both questions together showing that one out of every four manufacturers would like future technicians to have people skills. Social skill is a related variable that is highly valued. More than one in eight respondents said technicians will need to be personable, cheerful, tolerant and even-tempered. One out of ten, said technicians will need innate or natural talent such as "brains," manual dexterity, common sense and aptitude. Even thought the topic was personal skills, many respondents could not resist seconding the nominations made above when they were talking about technical skills. Electronics, machines, mechanical skills, and vocational skills (22%), and computer skills, (20%) were emphasized. Other skills mentioned again include math (11%), manufacturing skills (10%), and drafting, blueprint, design (9%). For a more detailed presentation of these data, see Appendix B, Question 23. Company Support for Training Forty-two percent (42%) of respondents say their company reimburses community college tuition. Over half say they currently have no workers taking community college courses, but many do have student employees:

• 14.5% have 1 worker attending

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• 13.5% have 2 workers attending • 7.5% have 3 workers attending • 2.0% have 4 workers attending • 3.0% have 5 workers attending • 2.5% have 6-8 workers attending • 3.5% have 10-20 workers attending

Recruitment Recent Hiring The question was asked, how many people have been recruited from two-year community colleges or from technical schools during the past two years? Over 57% said none, but others hired several, including one manufacturer who reported hiring 44 people and another who reported hiring 400. Most of the numbers are much smaller:

• 8.5% hired at least 1 • 12.6% hired 2 • 6.0% hired 3 • 3.5% hired 4 • 3.5% hired 5 • 3.5% hired 6 or 7 • 2.0% hired 10-12 • 2.0% hired 20-25

Future Hiring Experience. In the next two years, 65% of all respondents expect to hire someone with at least five years experience. In fact, over half of these expect to hire from two to five people who have five years experience. Across all seven business sectors, the groups doing the most hiring are electronics and industrial machinery. The group doing the least hiring in this category is chemicals and plastics. Certificate. In the next two years, 47% of respondents expect to hire someone with a certificate. Again, over half of them expect to hire from two to five individuals. The manufacturing sectors expecting to hire the largest number are industrial machinery and electronics. The group doing the least amount of hiring in this category is information technology, computers and related hardware. Two-year degree. Forty-eight percent of respondents expect to hire someone with a two-year degree in the next two years. Most of them will hire from two to five people. The manufacturing sectors expecting to hire the largest number are electronics, industrial machinery, and diversified manufacturing. Sectors expecting to hire fewest from this category are aerospace and information technology, computers and related hardware.

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Thirty-nine percent expect to hire someone with a four-year degree, and about half of them will hire between two and five people. Eleven percent expect to hire someone with an advanced degree. Again, about half of the 11% plan to hire someone with a masters degree or a doctorate. Support Needed from the Community Colleges In closing, we posed a general open-ended question: "What can the community colleges do to better recognize and respond to your new technology training needs?" Twenty percent chose not to answer. Some said they have no new technologies that need training for. The remaining 80% (159 respondents) mentioned 289 themes, which could be grouped into one of the following 19 categories: 1. Teach machine, mechanical, and vocational skills such as basic shop, welding, electronics, industrial skills, the "trades," basic job skills (n = 49) 2. Teach computer skills (literacy, basic, CAD CAM, programming, latest software, etc.) (n = 33) 3. Keep up with current trends by using market research, advisory panels, communication with business, and so on (n = 25) 4. Provide miscellaneous course content (certificate programs, technical, etc.)

(n = 25) 5. Provide hands-on training and practical lab experience (n = 22) 6. We have no new technology needs (similar to item 8) (n = 19) 7. Provide math (basic math, geometry and trigonometry). Need "good math skills." (n = 15) 8. Keep doing what you're doing. The community colleges are doing well. They are providing what is needed. They are already doing everything necessary. (n = 12) 9. Provide language skill development (good communication skills, technical language,

and composition) (n = 11) 10. Teach manufacturing skills such as assembly, production, quality, statistics and processes. (n = 11) 11. Provide basic literacy (English, reading, penmanship and writing) (n = 11) 12. Teach basic employment issues (attendance, work ethic, motivation, team work and

productivity) (n = 11)

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13. Engineering (many types mentioned) (n = 10) 14. Other - This category includes learning how to deal with policy makers and other skills outside the community college purview (n = 9) 15. Provide business education (ethics, structures, operations, finance, import/export)

(n = 7) 16. Drafting, blueprints, design (n = 6) 17. Work on student relations. Introduce trained students to them, train current employees, attend job fairs, develop internships (n = 5) 18. Teach people skill development (customer service) (n = 4) 19. Teach problem-solving skills (n = 4) Many respondents took this opportunity to reiterate what they would like to see in an employee. Others spoke specifically to what the community colleges can do to help them. A major recurring theme was the desire to see a strengthened communication network between college and business. Item #3 above says, "Keep up with current trends by using market research, advisory panels, communication with business, and so on." This sentence attempts to capture a broad desire on the part of manufacturers that colleges keep current by talking with them (one suggested running focus groups), developing outreach programs and using industry and advisory committees to gather information on industry-related developments. One interpreted the interview itself as market research and said they thought the colleges should ask business for their views more often. Another said, phone calls alone are not enough; "Get out and meet companies and see what they are doing." "Come in, sit down, and see what is going on." Another training need often mentioned -- the need for hands-on training and practical lab experience -- can be the practical outcome of networking with business. Internships and student conferences can be designed to tie student learning more directly to practical applications. The comment made by one respondent, "I hope they would be one step ahead of me," may be the most telling of the situation manufacturers find themselves in today because of the global challenge to California's manufacturing capacity and productivity; individual manufacturers hope to stay one step ahead so they can gain and keep competitive advantage. The respondent who said "I hope they would be one step ahead of me," hopes the community colleges can reduce expense and risk for him by knowing which technologies are on the horizon. Keeping a close eye on developing technologies and assisting with tech transfer to business -- accompanied by work force training -- will give him the leverage he needs to move ahead.

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Finally, there were many comments supporting the work currently being done by the community colleges. Several said specifically that the colleges should keep doing what they are doing; more is not expected of them. "They are doing a good job." Actual comments can be reviewed in Appendix B. A quick read will support and explain the substance behind the 19 categories shown above.

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Attachment 1: Manufacturing Survey Methodology This study was designed to shed light on rates of development and deployment of current and future technologies used in manufacturing, and to clarify the training and educational needs associated with those technologies The target population for study, manufacturers in the state of California, is a large and diverse body. To adequately represent all aspects of this population, a sizeable random sample, stratified by manufacturing types, would have to be selected and polled. This is a requirement not met in the present study. Instead, the research team attempted to gather as much data as possible though an electronic email survey using Survey Monkey. This approach failed, primarily because of a small sample of email addresses and, perhaps partially, because time and attention demands placed on officers of manufacturing operations discourages them from performing unnecessary tasks. A sampling frame of over 1,000 businesses, provided by the client, made it possible to conduct telephone interviews. Two hundred executive interviews were successfully conducted during the month of October of 2005.§§§§ While the results of these interviews cannot be generalized to the California manufacturing population as a whole, they are suggestive of manufacturing situations, attitudes and opinions, and can be used to inform decisions about current and future training needs.

The interview instrument was designed to capture qualitative and quantitative answers regarding: respondent characteristics; the significance of various manufacturing-related technologies; employee characteristics, with a focus on technicians; workforce education with an emphasis on expertise needed by technicians; and perceptions of the college role in recognizing and responding to emerging training needs.

The data were entered into an EXCEL database, edited and reviewed to confirm validity. Respondents were parsed into industry groups according to function and the top seven most significant sectors were identified and used to interpret and explain survey findings.

§§§§ See Attachment 4 for a list of respondent locations.

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Attachment 2: Manufacturers Survey Questionnaire Statistical Summary of the Findings

Prepared by Holden Research

WHAT MANUFACTURING TRAINING SHOULD THE COMMUNITY COLLEGES

BE GEARING UP TO PROVIDE?

This survey is from the Centers for Applied Competitive Technologies, Economic and Workforce Development Program, California Community Colleges

200 companies were interviewed in this survey. (n = number of responses)

PART 1 – SIZE and BUSINESS SECTOR

Q1. Which of the following best describes what you do at your location: n % 1. We are a job shop contractor 68 34.0 2. We are final product designers and builders 84 42.0 3. Other 48 24.0 Total 200 100.0 Q2. How many people are employed at your location? n % 1. 50 employees or less 151 75.7 2. Between 50 and 200 employees 35 17.5 3. Over 200 employees 14 7.0 Total 200 100.0 Q3. Do you produce an end or finished product to be used by consumers or

industry? n % 1. Yes 171 85.5 2. No 29 14.5 Total 200 100.0 Q4. Do you produce subassemblies or parts to be used in further manufacturing?

n % 1. Yes 112 56.0 2. No 88 44.0 Total 200 100.0

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Q5. Please scan down these categories and check the one or two areas that best describes

your focus (Choose no more than two): number times percent of 200 selected respondents (a) Electronics and electrical equipment manufacturing 49 24.5 (b) Information technology, computers,

and related hardware 26 13.0 (c) Nanotechnology 2 1.0 (d) Biotechnology 5 2.5 (e) Transportation 24 12.0 (f) Industrial Machinery 52 26.0 (g) Chemicals and Plastics 23 11.5 (h) Diversified Manufacturing 42 21.0 (i) Software 5 2.5 (j) Communications, navigation

and related equipment 5 2.5 (k) Aerospace 24 12.0 (l) Apparel Manufacturing 2 1.0 (m) Printing and other duplicating 5 2.5 (n) Furniture 3 1.5 (o) Toys 0 0.0 (p) Other 41 20.5

Total 308

PART 2 - TECHNOLOGY DEVELOPMENT

Do you work with or plan to acquire... number times selected

Q6. Enterprise Management 24 If selected, rate: n % Highly significant to us now 16 66.7 Will be highly significant if a few years 8 33.3 Total 24 100.0

Q7. Product lifecycle management technologies 19 If selected, rate: n % Highly significant to us now 7 36.8 Will be highly significant if a few years 12 63.2 Total 19 100.0

Q8. Green Design, Life-Cycle Manufacturing, Cradle to Grave Design (low environmental impact) 25

If selected, rate: n % Highly significant to us now 9 36.0 Will be highly significant if a few years 16 64.0 Total 25 100.0

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Q9. “Lean” manufacturing (quality improvement, problem solving) 104 If selected, rate: n % Highly significant to us now 76 73.1 Will be highly significant if a few years 28 26.9 Total 104 100.0

Q10. Equipment and software to reduce scrap 65 If selected, rate: n % Highly significant to us now 46 70.8 Will be highly significant if a few years 19 29.2 Total 65 100.0

Q11. Supply-Chain Management 62 If selected, rate: n % Highly significant to us now 46 74.2 Will be highly significant if a few years 16 25.8 Total 62 100.0

Q12. Manufacturing-related simulations and visualization technologies 65 If selected, rate: n % Highly significant to us now 32 49.2 Will be highly significant if a few years 33 50.8 Total 65 100.0

Q13. Rapid prototyping – 3D Modeling 66 If selected, rate: n % Highly significant to us now 39 59.1 Will be highly significant if a few years 27 40.9 Total 66 100.0

Q14. Collaborative and/or Concurrent Engineering 80 If selected, rate: n % Highly significant to us now 66 82.5 Will be highly significant if a few years 14 17.5 Total 80 100.0

Q15. Security affecting your technology or IT (software, data, etc) 70 If selected, rate: n % Highly significant to us now 55 78.6 Will be highly significant if a few years 15 21.4 Total 70 100.0

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Q16. Energy use and energy conservation technologies 57 If selected, rate: n % Highly significant to us now 43 75.4 Will be highly significant if a few years 14 24.6 Total 57 100.0

Q17. ISO 9000 and other related certifications 102 If selected, rate: n % Highly significant to us now 62 60.8 Will be highly significant if a few years 40 39.2 Total 102 100.0

Q18. Nanotechnology 10 If selected, rate: n % Highly significant to us now 0 0.0 Will be highly significant if a few years 10 100.0 Total 10 100.0

Q19. Biotechnology and bioinformatics and related technologies 12 If selected, rate: n % Highly significant to us now 4 33.3 Will be highly significant if a few years 8 66.7 Total 12 100.0

Q20. MEMS (Micro-Electro-Mechanical Systems) and related technologies 28 If selected, rate: n % Highly significant to us now 14 50.0 Will be highly significant if a few years 14 50.0 Total 28 100.0

Q21. Did we miss one? (Specify): 18 people specified “other” technology needs. 18 See “comments” section of Appendix. If selected, rate: n % Highly significant to us now 17 94.4 Will be highly significant if a few years 1 5.6 Total 18 100.0

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PART 3 - EMPLOYEE CHARACTERISTICS Technicians Q22. As manufacturing continues to evolve, what are the top three technical skills that technicians

will need most? q22codes Needed Technical skills (ALL-THAT-APPLY) 0 50 100 COUNT ADJ% ├─┬─┴─┬─┴─┬─┴─┬─┴─┬─┴─┬─┴─┬─┴─┬─┴─┬─┴─┬─┴ Electronics,machine,voc,trade 99 49.7 ╞════════════════════ Computer skills 93 46.7 ╞═══════════════════ Manufacturing skills 44 22.1 ╞═════════ Drafting, blueprint, design 33 16.6 ╞═══════ Engineering 32 16.1 ╞══════ Math 28 14.1 ╞══════ Misc skills, training 24 12.1 ╞═════ Basic employment issues 21 10.6 ╞════ People skills 18 9.0 ╞════ Problem-solving skills 15 7.5 ╞═══ Experience,hands-on,practical 14 7.0 ╞═══ Chemistry,physics,materials 13 6.5 ╞═══ Hardware 13 6.5 ╞═══ Basic literacy 12 6.0 ╞══ Language skill development 11 5.5 ╞══ Innate talents 9 4.5 ╞══ No answer 8 4.0 ╞══ Other 5 2.5 ╞═ Business education 2 1.0 ╞ No new technology needs 1 0.5 ╞ TOTAL 199 100.0 ├─┴─┬─┴─┬─┴─┬─┴─┬─┴─┬─┴─┬─┴─┬─┴─┬─┴─┬─┴─┬ 495 0 50 100 199 respondents mentioned 495 skills.

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Q23. As manufacturing continues to evolve, what are the top three personal skills that technicians will need most?

q23codes Needed Personal Skills (ALL-THAT-APPLY) 0 50 100 COUNT ADJ% ├─┬─┴─┬─┴─┬─┴─┬─┴─┬─┴─┬─┴─┬─┴─┬─┴─┬─┴─┬─┴ Basic employment issues 78 39.0 ╞════════════════ Language skill development 61 30.5 ╞════════════ Electronics,machine,voc,trade 43 21.5 ╞═════════ Computer skills 39 19.5 ╞════════ People skills 31 15.5 ╞══════ Misc skills, training 27 13.5 ╞═════ Social skills, personality 24 12.0 ╞═════ Math 22 11.0 ╞════ Manufacturing skills 20 10.0 ╞════ Innate talents 19 9.5 ╞════ Drafting, blueprint, design 17 8.5 ╞═══ Basic literacy 16 8.0 ╞═══ No answer 14 7.0 ╞═══ Engineering 12 6.0 ╞══ Experience,hands-on,practical 12 6.0 ╞══ Problem-solving skills 9 4.5 ╞══ Business education 6 3.0 ╞═ Hardware 3 1.5 ╞═ Other 3 1.5 ╞═ Chemistry,physics,materials 2 1.0 ╞ TOTAL 200 100.0 ├─┴─┬─┴─┬─┴─┬─┴─┬─┴─┬─┴─┬─┴─┬─┴─┬─┴─┬─┴─┬ 458 0 50 100 200 respondents mentioned 458 skills.

Recruiting Q24. During the past two years, how many people have you recruited from two-year community colleges, or from technical schools?

Number recruited n % Adjusted 0 114 57.3 _ _% 1 17 8.5 20.0 2 25 12.6 29.4 3 12 6.0 14.1 4 7 3.5 8.2 5 7 3.5 8.2 6 5 2.5 5.9 7 2 1.0 2.4 10 2 1.0 2.4 12 2 1.0 2.4 20 3 1.5 3.5 25 1 0.5 1.2 44 1 0.5 1.2 400 1 0.5 1.2

Total 199 100.0 100.0 Adjusted n=85

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PART 4 - WORKFORCE EDUCATION Q25. (Omitted due to ambiguity) Q26. Does your company reimburse community college tuition? n % 1. Yes 84 42.0 2. No 110 55.0 3. Other 6 3.0 Total 200 100.0 Q27. Of your current workers, how many are taking community college courses now?

Number Attending n % Adjusted 0 107 53.5 _ _% 1 29 14.5 31.2 2 27 13.5 29.0 3 15 7.5 16.1 4 4 2.0 4.3 5 6 3.0 6.5 6 1 0.5 1.1 7 2 1.0 2.2 8 2 1.0 2.2 10 3 1.5 3.2 12 2 1.0 2.2 14 1 0.5 1.1 20 1 0.5 1.1

Total 200 100.0 100.0 Adjusted n=93 Q28. Are you currently able to hire technicians who are adequately trained for the job? n %

1. Yes 116 58.0 2. No 78 39.0 3. Other 6 3.0

Total 200 100.0

Q29. When hiring new technicians, what type of expertise must the candidate have?

Number times selected Q29_2 Information Technology***** as applied to Quality Management 109 If selected, rate: n %

Very important 58 53.7 Somewhat important 50 46.3

Total 108 100.0

***** The surveyor added this phrase to the question. A small follow-up sample of respondents were surveyed to see if it changed their response if it was deleted. The response was the same.

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Q29_3 Information Technology as applied to Lean Manufacturing 74 If selected, rate: n %

Very important 38 51.4 Somewhat important 36 48.6

Total 74 100.0 Q29_4 Information Technology as applied to Supply Chain Management 42 If selected, rate: n %

Very important 20 47.6 Somewhat important 22 52.4

Total 42 100.0 Q29_5 Information Technology as applied to Computer Aided Design 105 If selected, rate: n %

Very important 53 51.0 Somewhat important 51 49.0

Total 104 100.0 Q29_6 Information Technology as applied to Rapid Prototyping – 3D Modeling 54 If selected, rate: n %

Very important 19 35.2 Somewhat important 35 64.8

Total 54 100.0 Q29_7 Information Technology as applied to Pollution Prevention 34 If selected, rate: n %

Very important 15 45.5 Somewhat important 18 54.5

Total 33 100.0 Q29_8 Information Technology as applied to Waste Reduction 58 If selected, rate: n %

Very important 27 46.6 Somewhat important 31 53.4

Total 58 100.0 Q29_9 Information Technology as applied to Basic Statistics 59 If selected, rate: n %

Very important 21 35.6 Somewhat important 38 64.4

Total 59 100.0 Q29_10 Information Technology as applied to Materials Management 94 If selected, rate: n %

Very important 39 41.9 Somewhat important 54 58.1

Total 93 100.0

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Q29_11 Information Technology as applied to Logistics – Distribution 43 If selected, rate: n %

Very important 21 48.8 Somewhat important 22 51.2

Total 43 100.0 Q29_12 Import/Export††††† 35 If selected, rate: n %

Very important 18 51.4 Somewhat important 17 48.6

Total 35 100.0 Q29_13 Internet production coordination 32 If selected, rate: n %

Very important 10 31.2 Somewhat important 22 68.8

Total 32 100.0 Q29_14 Product Design 56 If selected, rate: n %

Very important 34 60.7 Somewhat important 22 39.3

Total 56 100.0 Q29_15 Computer Integrated Technology 60 If selected, rate: n %

Very important 35 58.3 Somewhat important 25 41.7

Total 60 100.0 Q29_16 Simulation and Visualization 32 If selected, rate: n %

Very important 9 28.1 Somewhat important 23 71.9

Total 32 100.0 Q29_17 Order Fulfillment 64 If selected, rate: n %

Very important 41 64.1 Somewhat important 23 35.9

Total 64 100.0 Q29_18 Design for Manufacturability 60 If selected, rate: n %

Very important 30 50.0 Somewhat important 30 50.0

††††† The phrase “information technology as applied to…” was not included here.

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Total 60 100.0 Q29_19 Security Technology 20 If selected, rate: n %

Very important 5 25.0 Somewhat important 15 75.0

Total 20 100.0 Q29_20 Sensors and Imbedded Products 23 If selected, rate: n %

Very important 9 39.1 Somewhat important 14 60.9

Total 23 100.0 Q29_21 None/Don’t Know/Refused 11

PART 5 - FUTURE HIRING ISSUES

Q30. In the next two years, how many people do you expec t to hire in each of the following categories? Q30A Five years experience

Number of hires n % Adjusted 0 68 34.9 _ _% 1 31 15.9 24.4 2 34 17.4 26.8 3 14 7.2 11.0 4 7 3.6 5.5 5 18 9.2 14.2 6 4 2.1 3.1 10 7 3.6 5.5 12 3 1.5 2.4 15 3 1.5 2.4 20 2 1.0 1.6

40 1 0.5 0.8 50 3 1.5 2.4

TOTAL 195 100.0 100.0 Adjusted n=127

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Q30B Certificate

Number of hires n % Adjusted 0 104 53.3 _ _% 1 17 8.7 18.7 2 33 16.9 36.3 3 15 7.7 16.5 4 1 0.5 1.1 5 11 5.6 12.1 6 2 1.0 2.2 7 1 0.5 1.1 10 7 3.6 7.7 15 2 1.0 2.2 20 1 0.5 1.1 24 1 0.5 1.1

TOTAL 195 100.0 100.0 Adjusted n=91 Q30C Two-year degree

Number of hires n % Adjusted 0 101 51.8 _ _% 1 32 16.4 34.0

2 26 13.3 27.7 3 8 4.1 8.5 4 5 2.6 5.3 5 11 5.6 11.7 6 1 0.5 1.1 7 2 1.0 2.1 10 6 3.1 6.4 12 1 0.5 1.1 20 1 0.5 1.1 24 1 0.5 1.1 TOTAL 195 100.0 100.0 Adjusted n=94 Q30D Four-year degree Number

of hires n % Adjusted 0 11860.5 _ _% 1 29 14.9 37.7 2 18 9.2 23.4

3 7 3.6 9.1 4 8 4.1 10.4 5 8 4.1 10.4 6 2 1.0 2.6 10 3 1.5 3.9 15 1 0.5 1.3

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20 1 0.5 1.3 TOTAL 195 100.0 100.0 Adjusted n=77 Q30E Master or Doctorate degree

of hires n % Adjusted 0 17489.2 _ _% 1 8 4.1 38.1

2 8 4.1 38.1 4 2 1.0 9.5 5 2 1.0 9.5 12 1 0.5 4.8 TOTAL 195 100.0 100.0 Adjusted n=21

PART 6 - BARRIERS & OPPORTUNITIES Q31. Are you currently part of a major supply chain? n % 1. Yes 71 35.5 2. No (Go to 33) 129 64.5 Total 200 100.0

Q32. What is the scope of your supply chain? n % 1. National 33 46.5 2. International 38 53.5 Total 71 100.0 Q33. Do you plan to become part of a major national or international supply chain in the near

future? n % 1. Yes 44 22.0 2. No 139 69.5 3. Can’t answer / Not applicable 17 8.5 Total 200 100.0 Q34. Will you be manufacturing in California in three to five years?

n % 1. Yes 168 84.0 2. Unknown 17 8.5 3. No 15 7.5 Total 200 100.0

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PART 6 - SUMMARY QUESTION Q35. What can the community colleges do to better recogn ize and respond to your new technology training needs? Q35codes (ALL-THAT-APPLY) 0 50 100 COUNT ADJ% ├─┬─┴─┬─┴─┬─┴─┬─┴─┬─┴─┬─┴─┬─┴─┬─┴─┬─┴─┬─┴ Machine, voc, trade skills 49 24.5 ╞══════════ No answer 41 20.5 ╞════════ Computer skills 33 16.5 ╞═══════ Keep up with current trends 25 12.5 ╞═════ Misc course content 25 12.5 ╞═════ Hands-on training, prac lab 22 11.0 ╞════ No new technology needs 19 9.5 ╞════ Math 15 7.5 ╞═══ Keep doing what you're doing 12 6.0 ╞══ Language skill development 11 5.5 ╞══ Manufacturing skills 11 5.5 ╞══ Basic literacy 11 5.5 ╞══ Basic employment issues 11 5.5 ╞══ Engineering 10 5.0 ╞══ Other 9 4.5 ╞══ Business education 7 3.5 ╞═ Drafting, blueprint, design 6 3.0 ╞═ Student relations 5 2.5 ╞═ People skills 4 2.0 ╞═ Problem-solving skills 4 2.0 ╞═ TOTAL 200 100.0 ├─┴─┬─┴─┬─┴─┬─┴─┬─┴─┬─┴─┬─┴─┬─┴─┬─┴─┬─┴─┬ 330 0 50 100 Multiple response analysis: 200 respondents mentioned 330 themes.

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Location of Respondent N % Buellton 1 0.5 Camarillo 6 3.0 Chatsworth 6 3.0 Chino 17 8.5 City Of Commerce 2 1.0 Claremont 1 0.5 Compton 1 0.5 Corona 26 13.1 Downey 1 0.5 El Monte 2 1.0 Fresno 1 0.5 Gardena 2 1.0 Glendora 2 1.0 Goleta 1 0.5 Hacienda Heights 1 0.5 Kingsburg 1 0.5 La Puente 1 0.5 Lake Elsinore 1 0.5 Lancaster 1 0.5 Los Angeles 4 2.0 Madera 2 1.0 Montclair 4 2.0 Montebello 1 0.5 Moorpark 1 0.5 Moreno Valley 1 0.5 Newbury Park 2 1.0 North Hills 1 0.5 Norwalk 1 0.5 Ontario 25 12.6 Oxnard 4 2.0 Pacoima 1 0.5 Palmdale 1 0.5 Paramount 1 0.5 Pasadena 1 0.5 Paso Robles 1 0.5 Perris 2 1.0 Placentia 1 0.5 Pomona 9 4.5 Rancho Cucamonga 16 8.0 Riverside 18 9.0 San Dimas 1 0.5 Santa Barbara 1 0.5 Santa Fe Springs 3 1.5 Santa Maria 1 0.5 Simi Valley 3 1.5 Sun Valley 2 1.0 Temecula 1 0.5 Thousand Oaks 1 0.5 Upland 6 3.0 Valencia 4 2.0 Van Nuys 1 0.5 Ventura 1 0.5 Westlake Village 2 1.0 Whittier 1 0.5 Total 200 100.0

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Attachment 3: Time Structures’ Manufacturers Survey Respondent Comments

"What can the community colleges do to better recognize and respond to your new technology training needs?"

• "Nothing, it is all old technology." • Keep on top of what is going on in the state. • "Teach basic math, geometry, trigonometry, reading and writing. " • Deal with our politicians and rule-makers. • There aren't any colleges that teach about wire and cable so there is not much I can

do. It's a lost art and there are not that many knowledgeable people in this business. • They are doing a fine job. • It’s hard to keep current. We’re buying all new machinery for technologies. • “Most of the workers are not highly paid. We have one person with an accounting

degree, and one person with an engineering degree, that is all we have." • "[They should keep doing] what they are doing now in community colleges. We have

no further needs from them. They (students) have to know how to weld, screw down floors, know about hydraulics and handle steel."

• The foundation. • "We need better communication with them. They should know workers need basic

composite lay-up, working with composite materials in the aerospace fields. They need to know general computing to access files, computer skills, knowledge of basic shop machinery, drill press, band saw, grinders. They come out of schools, colleges, and can’t turn on a band saw, etc, they don't teach in high schools either."

• We look for mechanical manufacturing experience. Basic job skills. • Quality and lean manufacturing. • Better educate students in literacy. • The local community college is doing very well. • "Market research, just like this call." • "Offer customer service classes that are not already available. Also, mechanical

classes. Maybe those are available, I'm not sure. Mostly, classes in the customer service area. Have common sense. Also, when we advertise for operators of mechanical machines, for people who have more technical knowledge of advanced machines, no one hardly answers those ads. People don't have that knowledge."

• Maintenance training for mechanical things and electronics. • "Machinists, assemblers, stockroom, and shipping." • Have more hands-on trade classes or skills. • "Language skills, computer skills, and people skills." • More hands-on computer-aided machinery. • I think that they are already doing [everything they need to]. • Give them (students) an understanding of product design and manufacturing. • Emphasis on business structures. More emphasis on application of prerequisite

materials.

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• "Older technology. It's, pretty much, OSHA-certified, HAZMAT training. Operators union, crane certificates, class A license, teamsters."

• They (the community colleges) are doing the best they can. • Offer electronics testing and software. • Offer more computer classes. Teach them how to behave. • Stay current with the technology that is out there. • Basic computer literacy and hands on skills. That's it. • "In regards to manufacturing, [we need] a larger amount of people trained in different

processes." • "They need to be trained in mills, lay and CAD CAM machines for making airplane

parts. They might have to go to a technology school for training. They need to have a lot experience."

• Basic machine skills. Metal-cutting and know how to use a CAD CAM machine. • They need to learn the PLC program. The community colleges need to teach them the

whole spectrum. They need electrical and mechanical skills and know how to trouble-shoot each area or machine.

• "Continue training and communicating with employers in the area." • "Good math skills and the good communication skills, to speak well. Those are the

two main requirements." • We have the need for a good machinist with hands on experience and good skills in

general. • Offer more workshops to current employees. • "Offer more technical classes, such as tool and die." • Business ethics. Customer relations. • "Teach the students to have solid basics such as English, math, CC computer

programming and be able to read micrometer." • "Run focus groups." • I would hope they would be one step ahead of me. • "Make more electrical engineers, high voltage power supply." • "Keep updated with soft wear, motivation, creativity." • "Basically, get the knowledge of machines. I can't tell them what to do." • Good penmanship and know how to write numbers. • "Current electronics technology. Know how to troubleshoot and maintain, as well as

knowing soldering. Know the latest advancement in product electro-mechanical assembly.

• "More hands-on work. We have had people from the colleges. It really depends on the people, whether they know what tools are needed. Same for even knowing which tool is which."

• I guess they need to be more practical. Sometimes they (workers) need basic skills in business and math.

• "Machinist, welders, we need trade training." • "They need the latest technology that is in this field in the future. They have to have a

strong background with electronics, blueprints and soldering." • "Use some of the modern technology computer software, the latest cutting machines."

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• I think they are doing a good job in our trade or field. We do tool and dye and plastic molding.

• "Mt. San Antonio Junior College. They have all the equipment and electrical engineer and toolmaking. They need machine shops to have them learn. Most of the high schools have machine shop programs. They need that. More colleges need to get back to these basics, to learn these types of jobs. Kids need guidance.

• "Have basic fundamental math, communication skills, and team work. Also, continuous improvement in problem-solving skills."

• They are too slow to pick up on new training needs. • "Technicians need computers, need to know how to spell, need to design." • [We need] a design person for new battery powered lawn mowers. • "They need the work ethic and communications skills. Also, an engineering degree." • "Quit spending money on sports, put it in the trades." • "More technical training in machine shop. For example, grinders, mills, lathes." • They don't seem to be training for what we are doing like punch presses and four-

slide machine. • Just offer to support the change in technology. Automation. • They need to get back to some of the basics such as the 3 Rs. • "Just what you're doing, an outreach program to manufacturing. I have a good

background with community colleges from Oregon. I intend to do the same thing here. Communications skills are very lax, in the workforce, today."

• It's really changing fast. Every year. • "More certificate programs. Hands-on computer use, in all positions. Those are the

major needs." • "We don't need to worry about that because we train on the job. You need to be really

good at math, physics and chemistry. No one is going to expect someone from a two year college to know everything. Unless you were going to be a doctor or something, then you better know it inside and out."

• "They need to get back to more technical schools, welding hydraulics, electrical. We need more of those schools."

• "We need to communicate with each other. They need to know about the programs we currently have. The schools in the area should be aware of our training."

• "CADCAM machinery classes. The government has these classes. Good mathematics skills, drafting, understand blueprint reading."

• Offer more education in plastics at the technical level. • Stay in touch with industry. Use industry and advisory committees. • Need to offer a wider range of classes that are more realistic. • "For the machine shop industry, implement better machine shop abilities and better

training." • More industrial training. • Practical lab experience. • Gather information out of the industry. • I would have to say offer my engineering courses. • "We need more hands-on engineers, mechanical and electrical. No more business

people. Too many, already."

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• "They don't have the programs for our industry, in metal manufacturing." • "Part of it is not just making phone calls. Get out and meet companies and see what

they are doing. It will give them a good start. Get the word out about what is offered. We need more information from the community colleges. That's it, in terms of outreach."

• "Make America wake up and keep manufacturing jobs in the United States. No one will train workers in the states. To get five years of training on the job, they need to be trained. Our country lets the illegals take all our jobs and they send the rest to Mexico or China."

• "People that have CAD experience, who are familiar with it." • Composite training. • They should have lots of hands on experience in machining not only technical but

practical. • "Need better dialog between our company sites, to know what they really need to do.

They need to know technical skills. For example, a solid foundation in electrical and mechanical, and they will be employed."

• "Come in and focus on the type of manufacturing we do. They have general machine knowledge in colleges but they need to come in and see the whole concept of what we do here. They need structural engineering skills, CAD CAM machine knowledge, mechanical engineering."

• Teach people to come to work every day. • "We don't hire anyone from community colleges, unfortunately. China has taken all

the industrial business from the United States. We just train people on our assembly line work and box up stuff here."

• Be aware of the medical device manufacturing market and its associated technologies. • "Come in, sit down and see what is going on." • Need more training in optics. • "Community college, at the engineering level [we need] analog technology,

programming technology. Digital and radio frequency engineering knowledge." • Talk with the manufacturing companies. • They already have a good program. We deal with them. They should continue to stay

current with technologies. • "Make their students literate, especially in words that are specific to the technology

industry. They need to know what the different technical terms mean." • They (the community colleges) are already doing it. • More hands on type of study. • More engineering training. Technicians have to be qualified for it. • Get in touch with the hr people so hr knows what experiences they have and what

classes they are taking. • They could put the schools a lot closer to where people are. They could put more

parking lots in. • Have a really good program for chemistry and computer skills. • More technology for different programs. Most up-to-date design software.

Production statistical process control. More on import and export. They need to know about China and how to deal with that.

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• They pretty much already offer what they need to in the community colleges that I am aware of.

• "I think your college is already there. They need to stay with industrial arts; that's mechanics and welding. They need to keep these programs going."

• "Lean manufacturing, 3D design." • Provide as many students as possible with welding experience. • The functions [we need] relate to accounts payable and receivable. Things that deals

with customer service relations and production. • "Our focus is on better material utilization, on industrial machine programming for

machines that have a CPU in them. They need to learn work force discipline, productivity and the key to producing the product in a small amount of time. Teach the scheduling cost control system."

• "Provide classes for people in the sign industry. For example, signs, electrical training with C145."

• Workers just need to know computers and how to use the robot welding machines. Most people know how to bend or cut metal. It's not hard to learn.

• Teach them better English and communication skills. • "Make sure people have a basic education, especially in math and English." • "The hardest thing to find in this town, are well trained programmers -- on the top of

the list. People in other areas, like electrical engineers, are not as difficult to find." • "We do not have new technology needs. [Technicians] need to be able to read, do

simple math and speak English. They will need welding skills." • Give me people with some skills. • "Make fees affordable and give residence students a break in the cost. Good student

rates. Better organization. Keep the same books for each course." • More 3D CAD CAM. Higher levels of quality training. • Train wider medical technology. When people get their degrees they need to be able

to communicate. • "Give us people who have completed courses, introduce them to us." • Encourage students to take classes in finance. • "Math skills, blueprint reading." • Continue to stay ahead of technology. • Offer curriculum that would help the student move into the work force. • [We need] people that can sew and have common sense. • People with electrical mechanical ability. • Train them to be proficient in technical matters. They need both math and computers

skills. They could visit our plant and learn what they have to do. • Start training in power electronics and with labs. • "Any kind of printing training would be beneficial." • "We need people trained for automotive technology. We need higher technical

training; there is a shortage for this. Computers skills. These all tie together." • "[Community colleges should] strengthen their operational programs with business.

We are open to internships for students to learn at our company. Hold some kind of student conferences so we could talk about what we do at our company."

• IT skills.

75

• The hands-on education. • They are doing all they need to. • "We need CAD operations. The community colleges lack in math skills and

communications skills. The kids out of high school can't balance a check book at all. Our school system needs to be over-hauled; they pass them through anyway so the teachers get paid. All the kids do is watch TV or play games and they don't have ambition to learn or make a living."

• More hands-on training. • "They (workers) need to be able to use computers, have Excel knowledge and math

skills. That's all I can suggest. We train here." • "Again they do a good job teaching technical skills in community colleges but

graduates can't write, speak well or get along well with others in general." • "They need basic hand tools, what I said before and math skills." • More machinists and electricians.

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Attachment 4: State Training Programs: Advanced Manufacturing Investments

Arkansas Department of Workforce Services

http://www.doleta.gov/BRG/pdf/Adv%20Man_Arkansas%20Dept%20of%20Workforce

%20Services1_Arkansas%20Delta%20Training%20and%20Education%20Consortium

_11.29.05.pdf

Delaware Valley Industrial Resource Center (DVIRC)

Greater Philadelphia Man http://www.doleta.gov/BRG/pdf/Adv%20Man_DVIRC_Greater%20Philadelphia%20Ma

nufacturing%20Technology.pdfufacturing Technologies Program

Greater Peninsula Workforce Investment Board

http://www.doleta.gov/BRG/pdf/Adv%20Man_Greater%20Peninsula%20WIB_SE%20

Virginia%20Adv%20Man%20Collaborative.pdf

Henderson-Henderson County Chamber of Commerce

http://www.doleta.gov/BRG/pdf/Adv%20Man_Henderson%20County%20Chamber%2

0of%20Commerce_Tri-County%20In.pdf

Illinois State University's National Center for Integrated Systems Technology

(ISU/IST)

http://www.doleta.gov/BRG/pdf/Adv_Man_ISU_Expanding_the_AM-

IST_Program_013105.pdf

Lancaster County Workforce Investment Board

http://www.doleta.gov/BRG/pdf/Adv%20Man_Lancaster%20County%20WIB_Pennsylv

ania%20Advanced%20Manufac.pdf

Lower Rio Grande Valley Workforce Development Board

http://www.doleta.gov/BRG/pdf/Adv%20Man_Lower%20Rio%20Grande%20WDB_Sou

th%20TX%20Adv%20Man%20Apprenticesh.pdf

National Center for Integrated Systems Technology - State of IL

http://www.doleta.gov/BRG/pdf/Adv%20Man_NCIST_Integrated%20Systems%20Tec

hnology%20Training%20for%20D.pdf

National Center for Integrated Systems Technology - State of OH

http://www.doleta.gov/BRG/pdf/Adv%20Man_NCIST_Integrated%20Systems%20Tec

hnology%20Training%20for%20D.pdf

National Institute for Metalworking Skills (NIMS)(1)

http://www.doleta.gov/BRG/pdf/Adv%20Man_NIMS_Competency%20Based%20Appre

nticeship%20for%20Metalwork.pdf

National Institute for Metalworking Skills (NIMS)(2)

http://www.doleta.gov/BRG/pdf/Adv%20Man_NIMS_Flexible%20Training%20Options

%20for%20Metalworking_12.pdf

77

Nebraska Central Community College

http://www.doleta.gov/BRG/pdf/Adv%20Man_Central%20Community%20College_Ne

braska%20Mechatronics%20Ed.pdf

Oregon Manufacturing Extension Partnership (MEP)

http://www.doleta.gov/BRG/pdf/Adv%20Man_Oregon%20MEP_Regional%20Lean%20

Manufacturing%20Training%20in.pdf

San Bernardino Community College District

http://www.doleta.gov/BRG/pdf/Adv%20Man_San%20Bernardino%20Comm%20Colle

ge%20District_Skills%20Certif.pdf

St. Louis Workforce Investment Board

http://www.doleta.gov/BRG/pdf/Adv%20Man_St.%20Louis%20WIB_Greater%20St.p

df

The Manufacturing Institute of the National Association of Manufacturers

http://www.doleta.gov/BRG/pdf/Adv%20Man_NAM%20Manufacturers%20Institute_Dr

eam%20It%20Do%20It%20Careers.pdf

The Pennsylvania Workforce Investment Board (WIB)

http://www.doleta.gov/BRG/pdf/Adv_Man_PA_WIB_Pennsylvania_Plastics_Initiative_6

.3.05.pdf

Workplace, Inc. (Southwestern Connecticut's Regional Workforce Development

Board)

http://www.doleta.gov/BRG/pdf/Adv%20Man_Workplace_Advanced%20Skills%20for

%20SW%20Connecticut_11.1.pdf

78

Attachment 5: Manufacturing Occupations and Skills Occupations Discussed in the Manufacturing Careers Report Source: Labor Market Information Division, Employment Development Department (2005). Manufacturing Careers. At: http://www.calmis.ca.gov/file/occmisc/Manuf1-Intro.pdf

• Aerospace Engineers • Assemblers • Bakers and Food Batchmakers • Cargo and Freight Agents • Chemical Engineers • Chemical Technicians • Chemists • Computer-Controlled Machine Tool Operators • Computer Hardware Engineers • Computer Software Engineers, Applications • Computer Software Engineers, System

Software • Cutting, Punching and Press Machine Setters,

Operators, and Tenders • Drilling and Boring Machine Tool Setters,

Operators, and Tenders • Electrical and Electronic Engineering

Technicians • Electrical and Electronic Engineers • Electrical and Electronics Repairers,

Commercial and Industrial Equipment • Electrical, Electronic, and Mechanical Drafters • Extruding and Drawing Machine Setters,

Operators, and Tenders • First-Line Supervisors/Managers of Production

and Operating Workers • Forging Machine Setters, Operators, and

Tenders • Graphic Designers • Grinding and Polishing Workers (Hand) • Grinding, Lapping, Polishing, and Buffing

Machine Tool Setters, Operators, and Tenders • Hand Packers and Packagers • Heat Treating Equipment Setters, Operators,

and Tenders • Industrial Engineers • Industrial Machinery Mechanics • Inspectors, Testers, Sorters, Samplers, and

Weighers • Laborers and Freight, Stock, and Material

Movers (Hand) • Lathe and Turning Machine Tool Setter,

Operators, and Tenders

• Lay-Out Workers • Machinists • Material Moving Occupations • Meat, Poultry, and Fish Processing

Workers • Mechanical Engineers • Milling and Planing Machine Setters,

Operators, and Tenders • Millwrights • Mixing and Blending Machine

Setters, Operators, and Tenders • Molding, Coremaking, and Casting

Machine Operators • Multiple Machine Tool Setters,

Operators, and Tenders • Numerical Tool and Process Control

Programmers • Packaging and Filling Machine

Tenders and Operators • Painting and Coating Workers

(except Const. and Maintenance) • Painting, Coating, and Decorating

Workers • Printing Machine Operators • Production Helpers • Rolling Machine Setters, Operators,

and Tenders • Semiconductor Processors • Sheet Metal Workers • Shipping, Receiving, and Traffic

Clerks • Structural Metal Fabricators and

Fitters • Tool and Die Makers • Tool Grinders, Filers, and

Sharpeners • Transportation, Storage, and

Distribution Managers • Truck Drivers, Heavy and Tractor-

Trailer • Truck Drivers, Light or Delivery

Services • Welders, Cutters, Solderers, and

Brazers

79

Attachment 6: White House SBIR Executive Order

For Immediate Release Office of the Press Secretary

February 24, 2004

Executive Order: Encouraging Innovation in Manufact uring

By the authority vested in me as President by the Constitution and the laws of the United States of America, including the Small Business Act, as amended (15 U.S.C. 631 et seq.), and to help ensure that Federal agencies properly and effectively assist the private sector in its manufacturing innovation efforts, it is hereby ordered as follows:

Section 1. Policy. Continued technological innovation is critical to a strong manufacturing sector in the United States economy. The Federal Government has an important role, including through the Small Business Innovation Research (SBIR) and the Small Business Technology Transfer (STTR) programs, in helping to advance innovation, including innovation in manufacturing, through small businesses.

Sec. 2. Duties of Department and Agency Heads. The head of each executive branch department or agency with one or more SBIR programs or one or more STTR programs shall:

(a) to the extent permitted by law and in a manner consistent with the mission of that department or agency, give high priority within such programs to manufacturing-related research and development to advance the policy set forth in section 1 of this order; and

(b) submit reports annually to the Administrator of the Small Business Administration and the Director of the Office of Science and Technology Policy concerning the efforts of such department or agency to implement subsection 2(a) of this order.

Sec. 3. Duties of Administrator of the Small Business Administration . The Administrator of the Small Business Administration:

(a) shall establish, after consultation with the Director of the Office of Science and Technology Policy, formats and schedules for submission of reports by the heads of departments and agencies under subsection 2(b) of this order; and

(b) is authorized to issue to departments and agencies guidelines and directives (in addition to the formats and schedules under subsection 3(a)) as the Administrator determines from time to time are necessary to implement subsection 2(a) of this order, after such guidelines and directives are submitted to the President, through the Director of the Office of Science and Technology Policy, for approval and are approved by the President.

Sec. 4. Definitions. As used in this order:

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(a) "Small Business Innovation Research (SBIR) program" means a program to which section 9(e)(4) of the Small Business Act (15 U.S.C. 638(e)(4)) refers;

(b) "Small Business Technology Transfer (STTR) program" means a program to which section 9(e)(6) of the Small Business Act (15 U.S.C. 638(e)(6)) refers;

(c) "research and development" means an activity set forth in section 9(e)(5) of the Small Business Act (15 U.S.C. 638(e)(5)); and

(d) "manufacturing-related" means relating to: (i) manufacturing processes, equipment and systems; or (ii) manufacturing workforce skills and protection.

Sec. 5. General Provisions. (a) Nothing in this order shall be construed to impair or otherwise affect the authority of the Director of the Office of Management and Budget with respect to budget, administrative, or legislative proposals.

(b) Nothing in this order shall be construed to require disclosure of information the disclosure of which is prohibited by law or by Executive Order, including Executive Order 12958 of April 17, 1995, as amended.

(c) This order is intended only to improve the internal management of the executive branch and is not intended to, and does not, create any right or benefit, substantive or procedural, enforceable at law or in equity, against the United States, its departments, agencies, or other entities, its officers or employees, or any other person.

GEORGE W. BUSH THE WHITE HOUSE, February 24, 2004.

# # #

Return to this article at: http://www.whitehouse.gov/news/releases/2004/02/20040224-6.html

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Endnotes 1 Manufacturing and Engineering Design, National Materials Advisory Board (2004). Retooling Manufacturing: Bridging Design, Materials, and Production. Division on Engineering and Physical Sciences National Research Council. 2 http://www.cccewd.net/services_detail.cfm?l=4 3 LMID, Wage and Salary Workers by Major Industry 1939-2004. 4 The Keystone Group (2004). Manufacturing in California. Kosmont Parteners and the Rose Institute. 5 US Bureau of Economic Analysis, Gross State Product calculator at: http://www.bea.gov/bea/regional/gsp/default.cfm 6 Labor Market Information Division, Industry Employment and Labor Force, November 18, 2005. 7 Center for Continuing Study of the California Economy (2004). California Economic Growth. Palo Alto, California. 8 Manufacturing Institute (2006). The Future Success of Small and Medium Sized Manufacturers: Challenges and Policy Issues. The Manufacturing Institute. 9 Manufacturing Institute (2006). The Future Success of Small and Medium Sized Manufacturers: Challenges and Policy Issues. The Manufacturing Institute. 10 LMID, Wage and Salary Workers by Major Industry 1939-2004. 11 The Keystone Group (2004). Manufacturing in California. Kosmont Parteners and the Rose Institute. 12 US Bureau of Economic Analysis, Gross State Product calculator at: http://www.bea.gov/bea/regional/gsp/default.cfm 13 The Keystone Group (2004). Manufacturing in California. Kosmont Parteners and the Rose Institute. 14 Employment Development Department, Labor Market Information Division, Industry Employment and Labor Force, November 18, 2005 at: http://www.calmis.cahwnet.gov/file/lfmonth/cal$PDS.pdf 15 Labor Market Information Division, Industry Employment and Labor Force, November 18, 2005. 16 Center for Continuing Study of the California Economy (2004). California Economic Growth. Palo Alto, California. 17 Manufacturing Institute (2006). The Future Success of Small and Medium Sized Manufacturers: Challenges and Policy Issues. The Manufacturing Institute. 18 National Association of Manufacturers, Manufacturing Institute, and Deloitte and Touche (2003). Keeping America Competitive. Washington D.C. 19 Manufacturing Institute (2006). The Future Success of Small and Medium Sized Manufacturers: Challenges and Policy Issues. The Manufacturing Institute. 20 Manufacturing and Engineering Design, National Materials Advisory Board (2004). Retooling Manufacturing: Bridging Design, Materials, and Production. Division on Engineering and Physical Sciences National Research Council. 21 Rebecca Taylor (2004) “Collaborating to Meet Manufacturing Challenges,” National Center for Manufacturing Sciences, in Committee on New Directions in Manufacturing, National Research Council (2004). New Directions in Manufacturing: Report of a Workshop. Washington, D.C. ISBN: 0-309-09227-2. 22 http://www.microsoft.com/resources/casestudies/CaseStudy.asp?casestudyid=16613&PF=yes 23 http://www.microsoft.com/resources/casestudies/CaseStudy.asp?casestudyid=16613&PF=yes 24 These systems are more fully discussed in: Time Structures (2005). Training California’s Transportation Workforce for the 21st Century: Responding to the ITS and The New Vehicle Technology Revolution. Advanced Transportation Technology Initiative, Economic and Workforce Development Program, California Community Colleges. 25 National Research Council (1998). Visionary Manufacturing Challenges for 2020. Washington, DC. 26 Stephen Walsh (2005). The Future of Microsystems: A Global and Academic View. SCME & SAME-TEC Pre-Conference Workshop July 25 & 26, 2005. 27 Manufacturing and Engineering Design, National Materials Advisory Board (2004). Retooling Manufacturing: Bridging Design, Materials, and Production. Division on Engineering and Physical Sciences National Research Council. 28 Ashok D. Bardhan and Dwight M. Jaffee (2005). Innovation, R&D and Offshoring, Fisher Center for Real Estate & Urban Economics, UC Berkeley. 29 Committee on New Directions in Manufacturing, National Research Council (2004). New Directions in Manufacturing: Report of a Workshop. Washington, D.C. ISBN: 0-309-09227-2.

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30Anthony C. Mulligan1(2004), “Issues for Small Manufacturing Enterprises,” Advanced Ceramics Research, Inc., in Committee on New Directions in Manufacturing, National Research Council (2004). New Directions in Manufacturing: Report of a Workshop. Washington, D.C. ISBN: 0-309-09227-2. 31 Bay Area Economic Forum (2005). One Million Jobs at Risk: The Future of California Manufacturing. 32 Bay Area Economic Forum (2005). One Million Jobs at Risk: The Future of California Manufacturing, p. 19. 33 Manufacturing and Engineering Design, National Materials Advisory Board (2004). Retooling Manufacturing: Bridging Design, Materials, and Production. Division on Engineering and Physical Sciences National Research Council. 34 Manufacturing Institute (2006). The Future Success of Small and Medium Sized Manufacturers: Challenges and Policy Issues. The Manufacturing Institute. 35 US Department of Commerce, Input-Output Tables, 2005. 36 Bay Area Economic Forum (2005). One Million Jobs at Risk: The Future of California Manufacturing, p. 11; and Gus Koehler (1997). Meeting The Needs Of Small And Medium Sized Manufacturers In California. Sacramento: California Research Bureau, Note Vol. 4, No. 4. 37 “Where Are The Jobs?” Business Week, : http://www.businessweek.com/magazine/content/04_12/b3875601.htm, and The Price Of Efficiency, Business Week, http://www.businessweek.com/magazine/content/04_12/b3875601.htm 38 US Department of Commerce (2004). Manufacturing in America: A Comprehensive Strategy to Address the Challenges to US Manufacturers. Washington, DC. 39 Ron French, “China losing cheap labor allure: More U.S. companies find savings are drained by errors, shipping costs and engineering changes,” The Detroit News, 2005. 40 Daryl Hatano, Vice President, Public Policy, Semiconductor Industry Association (October 23, 2003). Trends in Manufacturing and High Tech Immigration – Ramifications for Maintaining Technology Leadership. Speech to the California Council for Science and Technology, Irvine, California. 41 National Association of Manufacturers (2003b). 2003 NAM Small Manufacturers Operating Survey. http://NAM SME 2003 survey.htm 42 Gus Koehler (1995). Small Business Networks: Tools to Promote Economic Success. Sacramento: California Research Bureau. 43 California Economic Strategy Panel (2005). Key Findings and Recommendations, December 15, 2005. Sacramento, CA. 44 Gus Koehler (1995). Small Business Networks: Tools to Promote Economic Success. Sacramento: California Research Bureau. 45 Organization for Economic Cooperation and Development (OECD), The Economic and Social Implications of Electronic Commerce: Preliminary Findings and Research Agenda, OECD Ministerial Conference, Ottawa, Canada, October 7-9, 1998, p. Annex I, Table 3.1. Comparison of various total ecommerce estimates, p. 24. 46 Myung Jong Hong (2000). World Class E-Commerce Strategies. Sacramento: California Research Bureau. 47 Batt, The New American Workplace. (Ithaca: ILR Press, 1996). 48 These themes are fully developed in: Gus Koehler (1999). California Trade Policy. California Research Bureau. 49 Howard Schatz (2003). Small Business and the Globalization of California’s Economy. Public Policy Institute of California. 50 Howard Schatz (2003). Small Business and the Globalization of California’s Economy. Public Policy Institute of California., p. 4. 51 “Intel to invest $1 billion in India: Chip maker plans to expand operations, partner with local tech companies,” The Associated Press, Dec. 5, 2005; and Bal Krishna (2205). India, Canada Sign Science, Technology Agreement, BBC Monitoring South Asia, sited by Small Times at: http://www.smalltimes.com/document_display.cfm?document_id=10356 . 52 Margaret Eastwood (2004).” Manufacturing Globalization: Is the Glass Half Full or Half Empty?” Motorola, Committee on New Directions in Manufacturing, National Research Council (2004). New Directions in Manufacturing: Report of a Workshop. Washington, D.C. ISBN: 0-309-09227-2. 53 Rebecca Taylor (2004) “Collaborating to Meet Manufacturing Challenges,” National Center for Manufacturing Sciences, in Committee on New Directions in Manufacturing, National Research Council (2004). New Directions in Manufacturing: Report of a Workshop. Washington, D.C. ISBN: 0-309-09227-2.

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54 National Research Council (1998). Visionary Manufacturing Challenges for 2020. Washington, D.C. 55 AnneLee Saxenian (1999). “Silicon Valley’s New Immigrant Entrepreneurs,” Public Policy Institute of California, p. v-vi. 56 AnneLee Saxenian (1999). “Silicon Valley’s New Immigrant Entrepreneurs,” Public Policy Institute of California, p. viii. 57 Silicon Valley Nano Newsletter, July 2005, 58 Howard J. Shatz, Luis Felipe López-Calva (2004). The Emerging Integration of the California-Mexico Economies. Public Policy Institute of California. 59 Ying Lowery (2004). Dynamics of Minority-Owned Employer Establishments, 1997-2001. U.S. Small Business Administration. 60 Congnetics (1999). Analysis of Hispanic Owned Companies for the Small Business Administration. 61 Gladys L6pez-Acevedo (2003). Wages and Productivity in Mexican Manufacturing. The World Bank Latin America and the Caribbean Region Economic Policy Sector Unit. 62 Gladys L6pez-Acevedo (2003). Wages and Productivity in Mexican Manufacturing. The World Bank Latin America and the Caribbean Region Economic Policy Sector Unit. 63 National Association of Manufacturers (2001). The Skills Gap (2001): Manufacturers Face Persistent Skills Shortages in an Uncertain Economy. 64 California Manufacturing Technology Center (1999). Challenges & Barriers that California Manufacturers Have in their Growth. Los Angeles: California Manufacturing Technology Center. 65 The National Academy of Sciences, the National Academy of Engineering, and the Institute of Medicine of the National Academies (2005) Rising Above The Gathering Storm Energizing and Employing America for a Brighter Economic Future, Committee on Prospering in the Global Economy of the 21st Century: An Agenda for American Science and Technology. Committee on Science, Engineering, and Public Policy. http://books.nap.edu/catalog/11463.html 66 Los Angeles County Economic Development Corporation (2005). Manufacturing in Southern California. Los Angeles. 67 State of Texas Advanced Technologies and Manufacturing Cluster Assessment, August 2005. http://www.twc.state.tx.us/news/timanufacturing_report.pdf 68Bay Area Economic Forum (2005). One Million Jobs at Risk: The Future of Manufacturing in California. http://www.bayeconfor.org/ 69 Gus Koehler (1997). Meeting The Needs Of Small And Medium Sized Manufacturers In California. Sacramento: California Research Bureau, Note Vol. 4, No. 4.