Nov 7, 201809:09 PMMaking Madison
with Buckley Brinkman
Strong job growth scares me
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Strong job numbers came out again this month, with the U.S. economy adding over 200,000 new positions. Most hail this as great news for all concerned, but I’m not so sure. Unemployment sits at 2.6 percent in Wisconsin and the job market is as tight as it has been during my lifetime. If you’re searching for new workers to grow your business, you are in a tough spot. In fact, our entire economy may be at risk.
Economic growth is a simple equation: workforce growth plus productivity growth. Manpower projects the Wisconsin workforce to grow by just 15,000 workers between now and 2040. That’s virtually no growth and — if nothing changes — means that all of our economic growth must come from productivity gains. That’s scary to me because that means that even a modest 3 percent growth requires us to sustain productivity growth that we have not seen since World War II. It’s not a terrific scenario.
We need a different approach to productivity in order to keep the economy growing and strong. We must understand the elements leading to higher productivity and boost those levels in new ways. The vast majority of our companies are small and medium sized, and we must provide them access to the same tools as larger companies. We must redefine our market approach and become proactive in order to create the 30–40 percent productivity growth we need in the coming decade.
A group of experts from across the state, supported by the WEDC, is taking a new approach. Experts from industry, government, and academia created the Transformational Productivity Initiative (TPI) as our answer to this challenge. The goal was to boost productivity by at least 30 percent in our manufacturing operations. The team engaged around practical solutions for small- and medium-sized manufacturers (SMMs) in a yearlong development effort with promising results.
The team explored much of the research and the various approaches used to create significant productivity improvements in a variety of situations. Their efforts resulted in an impressive collection of services for SMMs, all designed for impact under precise conditions. It’s a valuable portfolio, especially when leveraged with accurate diagnoses and the proper implementation talent.
TPI opened a surprising new pathway for growing productivity. The initial pilots demonstrated the possibilities, improving productivity by 9–51 percent in a variety of manufacturing environments. Traditional efforts involve standardized programs and one-size-fits-all approaches. Those work — for incremental improvements. The TPI path requires more effort and specialized attention, but creates productivity improvements above 30 percent!