A new report gives Indiana top marks on the strength of its advanced manufacturing and logistics sectors, but it also notes that the state needs to focus on education and training for the next generation of workers.
“We just need to have a bigger stock and a more robust flow of graduates in this area,” said Michael Hicks, professor of economics and director of the Center for Business and Economic Research at Ball State University.
Hicks was among several speakers Thursday morning at a downtown Indianapolis breakfast event where the report was released, co-sponsored by IBJ and Conexus Indiana. Ball State produced the report for Conexus, an Indianapolis-based initiative focused on strengthening advanced manufacturing and logistics statewide.
The annual report, known as the Manufacturing and Logistics Report Card, analyzes data in nine categories and assigns an A-F letter grade to each. All 50 states are included in the report.
Indiana scored an “A” grade for its overall manufacturing industry health, as measured by three variables: share of total income earned by manufacturing employees, manufacturing wage premiums relative to other states; and share of manufacturing employment per capita.
Indiana also earned A grades in logistics industry health, tax climate and global reach.
But the state earned only a “C” in human capital. In this category, researchers looked at things like high-school and collegiate educational attainment, first-year adult retention rates in community and technical colleges, the number of associates degrees awarded on a per-capita basis, and the share of adults enrolled in basic education.
It earned B-minus grades in productivity/innovation and in its expected liability gap for state and local government pension and healthcare funding.
In the category of sector diversification, the state earned a C. Its lowest grade was a D-plus, for worker benefit costs.
Hicks said the human capital issue is “the area that worries me most.”
Advanced manufacturing includes sectors that rely heavily on research and development and employ a high number of science, technology, engineering and math, or STEM, workers.
More than half of advanced manufacturing jobs—58 percent—are blue-collar jobs. Another 25 percent are white-collar positions, while the remaining 17 percent are in STEM fields.
Mark DeFabis, CEO of Plainfield-based Integrated Distribution Services, discussed the importance of bringing students into the workplace to learn about logistics careers.
“Once exposed, a number of them get excited about what the opportunities hold,” DeFabis said.
Jon Tice, vice president of human resources at Westfield-based seat belt maker IMMI, said reaching out to students is key.
“Human capital is people, and people have got to connect," he said.
Manufacturing is important to Indiana because it makes up such a large part of the state’s economy.
According to the U.S. Bureau of Labor Statistics, an estimated 520,000 Hoosiers worked in manufacturing in April. Looking from 1990 forward, the state’s manufacturing employment peak was in December 1999, with just over 672,000 workers. The sector bottomed out in June 2009, with just over 425,000 workers.
Looking at the smaller subset of advanced manufacturing, the Conexus report says Indiana has 243,597 advanced manufacturing jobs. Put another way, one of every 12 workers is in the advanced manufacturing field—the largest share of any state.