Skills Gap May Impact Innovation, MIT Study Finds

The debate over whether or not there is a shortage of workers with engineering and math skills in key industries has taken a new twist, with serious implications for innovation.

Researchers at MIT, while agreeing with other economists that fears of a widespread skills gap are exaggerated, have sounded the alarm that it appears quite real, and potentially dangerous, for a key sector of the economy that drives growth: the most innovative manufacturers that bring an above-average number of new products to market.

The other surprise is that these manufacturing businesses are already having trouble finding workers who are competent not only in math, but reading. And a looming wave of retirements is likely to make things worse.

The skills gap “is nowhere near as universal or widespread as we keep hearing it is,” says Paul Osterman, a professor of human resources at MIT’s Sloan School of Management, and coauthor of the new survey. “But I don’t think the message of our work is that everything is fine.”

The MIT team surveyed plant managers at about 900 U.S. manufacturing establishments and conducted on-site interviews at some.

For core production workers in manufacturing, at least, Osterman says, “The skills in demand are in reach of most people. Three-quarters of firms are able to get what they need.”

But the MIT survey did find that the other quarter of manufacturing companies are already having trouble finding qualified candidates—including those who can not only do math, but read and understand technical writing.

It’s already taking three months or more for those companies to find qualified candidates for some positions. And managers at 40 percent of such firms say they see the problem as “a major obstacle to increasing financial success.”

Those are precisely the manufacturers that are most innovative, MIT researchers say. But they’re smaller, too, often offering lower wages, and have few connections to local community colleges and other educational institutions, and little on-the-job training.

They also face what the MIT report says portends a “huge problem”: a surge of retirements from manufacturing, a fifth of whose employees are over 55.

The MIT report recommends closer coordination between employers and educators, which it says can be encouraged by chambers of commerce, workforce investment boards, and civic organizations.

“Too often neither side knows how to deal with the other,” Osterman says. “But neither side has the resources to do that on their own.”

A new White House committee, the Advanced Manufacturing Partnership, will work on national efforts to upgrade workforce-training programs at community colleges and recruit military veterans for manufacturing jobs, among other things.

“If it’s the more innovative companies that are having more hiring problems, then there is real reason for concern for the future, when more firms will start adopting advanced manufacturing technologies requiring higher levels of math and reading competence,” the MIT report says.

Adds Osterman: “They’re not saying we’re going out of business—that this is a disaster. They’re saying it’s a concern. And in the long run, particularly with the large number of retirements that are coming, it could get worse.”

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One thought on “Skills Gap May Impact Innovation, MIT Study Finds”

  1. Respondent says:

    This is only a tactic to get everybody mentally prepared to accept the next round of visas for technical workers to be allowed to immigrate. There are plenty of skilled workers available. However, there is a shortage of workers available at peasant level salaries. If you truly believe in a capitalist system, then let the law of supply and demand work to the advantage of American workers and not just for business owners and supporters of illegal immigration.

    Tell business owners there will be no new visas and to raise their salary offerings or do without. Then, you’ll see the truth.

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