In 2015, candidate Donald Trump promised to bring back manufacturing jobs to the U.S. economy. But in reality, the real future growth industry is leisure, not manufacturing.
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In 2015, candidate Donald Trump promised to bring back manufacturing jobs to the U.S. economy.
But in reality, the real future growth industry is leisure, not manufacturing.
Here’s why:
Since Jan. 2017, manufacturing jobs have increased from 12.3 million to 12.9 million in Nov. 2017, growth, but negligible, particularly considering total U.S. employment has increased from 145.7 million to 157.3 million over that same period.
Manufacturing job growth represents 6% of all new jobs. The overwhelming majority of job growth is taking place outside manufacturing, and this is likely to continue to be the case in coming years.
The economic forces driving the distribution of jobs across sectors of the economy are determined by global economic and technological forces that far outweigh the desires of politicians.
Those global and technological forces also point to where future growth is likely to occur, and thus where small and diverse business owners might be well advised to consider in their own company strategic plans. For the most part, opportunities for small and diverse businesses will not be in manufacturing.
I often think about where markets and technology are going based on my own narrow needs, experiences, interests and demands. Although I am not a typical American consumer, through observations and data, it appears that American consumers/workers are increasingly going to have more time on their hands, partly as a result of technology and rising standards of living.
That leads me to believe the leisure industry has significant growth potential. This is not a new phenomenon.
In the earliest most comprehensive study of the work week, the typical American factory worker worked 68 hours per week in 1832. By 1880, the work week had declined to just over 10 hours a day and six days a week. In 1886, the American Federation of Labor announced its support for the eight-hour day.
After great struggle, in 1914, Ford Motor Co. instituted a $5-a-day wage and eight-hour work day. Interestingly, labor productivity at Ford increased more than enough to compensate them for the reduced number of hours.
We have been stuck with the eight-hour work day for more than 100 years. This is about to change.
U.S. workers in all industries work about as many hours as our British counterparts — 1,680 hours per year. U.S. manufacturing workers averaged a whopping 2,065 hours per year. German workers clocked an average of 1,363 hours and experienced a 27 percent higher productivity compared to their British counterparts.
Less is more. But before you put in that application to work for Porsche in Zuffenhausen, it is only a matter of time before the American work week also becomes shorter.
A shorter work week will have significant implications on what we do with that time, what economists call leisure. My slightly cloudy crystal ball tells me that the future for business is in capturing a greater share of consumers’ leisure budgets.
We already see this in the explosion of companies like Netflix to entertain us at home and on our mobile phones. We see it in the gig economy where workers who have more leisure choose to turn their personal cars into transportation services.
We see our homes being turned into vacation rentals as traditional hotels struggle to keep up with the growing global demand.
Domestic and international air travel in the U.S. has increased from 700 million passengers in 2003 to over 1 billion passengers in 2018.
None of this is possible without increased leisure time, productivity and income.
My crystal ball fails miserably when it comes to drilling down to the specific types of technologies and companies that small and diverse entrepreneurs should think about to take advantage of this massive social change.
However, entrepreneurs should consider how younger consumers and younger professionals are spending their leisure dollars, and at the other end of the age spectrum, how older consumers are doing the same.
The former group sets trends and adopts changes early, while older consumers have the money and wealth to spend unlike their younger children and grandchildren.
Forget about manufacturing. The future is in leisure.
Fred McKinney is the Carlton Highsmith Chair for Innovation and Entrepreneurship and director of the Center for Innovation and Entrepreneurship at the Quinnipiac University School of Business.
