Insourcing American Jobs: The Importance of “Smart” Manufacturing, Broadband, and IT

On Wednesday, President Obama hosted a forum at the White House focused on the increasing number of companies choosing to “insource” jobs and make new investments in the United States. An important factor in this trend is the rising importance of information technology.

Take Master Lock, for example:  CEO John Heppner noted that the company not only brought back 100 overseas manufacturing jobs to its Milwaukee facility, but is now also exporting products to China. Master Lock credits its success with heavy investments in automation, which enabled skilled union labor to compete successfully with labor-intensive approaches overseas.  Thanks to companies like Rockwell Automation, Smart Manufacturing is rapidly transforming the global competitive landscape by marrying industrial automation with information technology (IT) to optimize the efficiency, productivity, and output of plants and supply networks.  Equally important, smart manufacturing at companies like Master Lock typically require three to four times the number of indirect jobs to support them—in the case of Master Lock, an additional 300 to 400 new jobs.  That’s because smart factories typically use more non-manufacturing, service-sector and technical support and logistics to support increased productivity.

Another example is Arise Virtual Solutions, which engagesworkers for call centers: CEO Angela Selden noted her plans to attractan additional 10,000 agents this year.And she’s not alone – a coalition of contact center companies joined FCC Chairman Genachowski to pledge to hire an additional 100,000 workers over the next two years. Critical to scale these businessesis the prevalence of residential high-speed broadband.

Yet another example is GalaxE Solutions:  CEO Tim Bryan shared his story about bringing IT jobs back to the United States and helping to revitalize an iconic American city by working to transform Downtown Detroit into a healthcare IT hub. GalaxE acquired three floors of a barely occupied downtown high-rise with its “Outsource to Detroit” campaign, matched by its commitment to hire 500 IT professionals within five years. And the company is on track, with more than 120 jobs filled and an additional 200 openings.

GalaxE isn’t alone; there were an estimated 3,400 posted IT positions in the greater Detroit market as of October 2011. An American city known for technological innovation coupled with affordable real estate, a large network of research universities and community colleges, and a highly skilled workforce, Detroit is an attractive and a viable destination for IT work, as are a growing number of other communities throughout the country.

We are a bit more excited about Detroit’s success given its participation in the White House Strong Cities, Strong Communities (SC2) initiative. OSTP has a front row seat as we’ve been working with employers in Detroit to develop IT skills training courses at local community colleges to fill thousands of job openings in this sector. Stay tuned.

Aneesh Chopra is U.S. Chief Technology Officer

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