Thanks to its strong educational system and manufacturing industry, Connecticut will pace America’s high tech-sector for the next generation.
But Connecticut is leading in a losing cause. Pacing the nation isn’t what it used to be, as American high-tech manufacturing industry is outpaced by the global marketplace, particularly Asia, according the U.S. National Science Board.
“Manufacturing is an indicator of the economic strength of a nation,” said Ray Bowen, chairman of the NSB, which is the governing body of the National Science Foundation. “It is also an indicator in the investment in fundamental science.”
The NSF released its 2012 economic indicators study on high-tech manufacturing on Jan. 18, showing that the U.S. lost 28 percent of these jobs over the past 10 years, further eroding its lead over second-place China and the rest of the world.
Even though Connecticut leads the nation in many educational and manufacturing indicators, industry groups push for the state systems to improve to help the entire country reverse its downward trend.
“As we look at this as an economic driver, we need to be beyond proficient,” said Patrick Riccards, chief executive of state education reform organization ConnCan. “It is another demonstration that we are not preparing our kids adequately for the workforce.”
Connecticut manufacturing declined steadily since 1990, shedding 45 percent of its jobs. But 2011 marked a turnaround year for the industry, as annual employment reached 167,000, a 1 percent workforce increase over 2010, according to the U.S. Bureau of Labor Statistics.
Last year was the first year since 1998 that employment in Connecticut manufacturing grew. The gains could have been much more as manufacturers were reluctant to fill vacant positions because they couldn’t find job applicants with the proper skills.
“State government and national leadership are understanding that manufacturing jobs are high-paying jobs that require a lot of math and science,” said Frank Johnson, president and CEO of the Manufacturing Alliance of Connecticut. “The idea of keeping manufacturing jobs is an idea whose time has come.”
In its economic forecast report, the NSB looked at a number of key indicators to gauge current and future strength in the high-tech industry. Among all the states, Connecticut is among the leaders in nearly all the indicators of education, higher education, workforce, research financing, research and development, and science and technology’s role in the larger economy.
The percentage of Connecticut college graduates receiving a science or engineering degree was 33.1 percent — ranking the state No. 10 in the nation. The state’s percentage of doctorate of science and engineering holders among the workforce is fourth in the nation.
Among the proficiency of fourth and eighth graders in math and science, Connecticut was in the top quartile in every category.
“Being in the top quartile in this measure means we still have a long way to go,” Riccards said. “We still don’t have the kids with the skills to do the jobs we are creating.”
The state needs to map out the future jobs in the state and then help students obtain the skills necessary to compete for those jobs, ConnCAN’s Riccards said.
China outpaces American in the number of advanced degrees in natural science and engineering, hampering the country’s chance of leading globally in high-tech research and production, according to the NSB. China conferred 300,000 university degrees in natural sciences in 2008, compared to 170,000 by the U.S. For engineering, China universities conferred 700,000 degrees in 2008, compared to less than 100,000 by U.S. universities.
“Avoiding being left behind requires highly developed human capital,” said Rolf Lehming, director of the Science and Engineering Indicators Program.
Having degrees holders in science and engineering — especially doctorates — is important to the future economy because these people are the drivers of new technologies, Lehming said.
The good news for Connecticut is the high-tech industry is holding its own now. Connecticut’s research and development expenditures as a percent of the gross domestic product is over 5 percent, an elite milestone matched by only three other states.
Connecticut’s manufacturing industry created $25.9 billion in gross domestic product in 2010, ranking third among state industries. The state aerospace industry was the biggest subsector with $5.3 billion in GDP. Chemical manufacturing, which includes pharmaceuticals, had $4.7 billion in GDP.
“There is always going to be the need for high-tech manufacturing in the United States, particularly in Connecticut,” Johnson said. “There is a more conscious effort to increase the role manufacturing plays.”
The state lost a lot of high-labor manufacturing jobs after the country signed free trade agreements around the globe, and then lost commodity production jobs as China bolstered its world presence, Johnson said.
The companies remaining from those purges are strong, have increased productivity, hold technology patents and will help keep the industry strong for the next generation, Johnson said.
Shelton manufacturer Lex Products was one of seven Connecticut manufacturers named to the Inc. magazine 5000 fastest growing companies. Lex doubled its revenues from $25 million in 2007 to $50.9 million in 2010.
“We don’t have the dark and dingy type of factory,” Lex President Mike Scala said. “Our manufacturing floor looks more like a clean room.”
Lex makes power systems and control assemblies. The company is expanding two new lines this year: molded cable assemblies and electric vehicle charging stations. To make up for the loss of its military sales, Lex is growing its share of the entertainment market.
The Shelton company introduced lean manufacturing practices six years ago and cut costs by 30 percent. The new efficiencies allow Lex to invest money in new product development.
“That’s how we find opportunities for growth,” Lex CEO Bob Luther said.
Despite current accomplishments and indicators of future success Connecticut hit some bumps in the road in helping the U.S. maintain its high-tech world leader position.
The number of high-tech businesses in Connecticut was 7,736 in 2008, representing 8.37 percent of all businesses, below average. For the entire country, 8.52 percent of businesses are high-tech.
Worse for Connecticut was its loss of 124 high-tech businesses in 2008, the last year for which figures are available. This ranks the state No. 43 in high-tech business growth, according to the NSB report.
These problems — in Connecticut and the United States — must be solved by the industry, the education system and the government, Bowen said.
“It is a long-term national issue that various organizations need to address,” Bowen said.
