Reality Check: Where the Real Jobs Will be Created

It is clear that efforts of workforce development agencies around the country have not yielded the kind of job growth in new business sectors for which they had hoped. It is about time for all of us to cut the noise of slick marketing campaigns and feel-good speeches about massive job creation in technology, energy, and healthcare sectors.

The latest McKinsey Report points out,

Many governments have been actively trying to promote growth, competitiveness, and employment. But policy makers who hope that advanced “clean” technologies can create work on a large scale will probably be disappointed, because these sectors are just too small to make an economy-wide difference. The local-business and household-services sectors are a much better bet: from 1995 to 2005, services generated all net job growth in high-income economies. Low-tech “green” activities, such as improving the insulation of buildings and replacing obsolete heating and cooling equipment, could generate more jobs than renewable technologies can.

Now, if we step back for a moment, it all starts to come into focus for us. Real new job growth will come from the existing industries that have invested in innovations in technology, etc… It makes sense, doesn’t it? Industries that have already established an infrastructure and market presence are much better suited to grow and expand their workforce than a new start-up entity that will require massive support to get up and running.

That is not to say that we should abandon these new growth initiatives, as they are important to the future of this state for the decades to come. What we need to do is be realistic with ourselves and focus on both short-term and long-term workforce strategies. That means our short term focus should be to drive innovation within existing businesses. They will be the ones who expand their workforce and create new jobs faster than a start-up company. Long term, we also need to continue to support the start-up businesses that will bring new ideas, products, and services to threshold industries faster than an established company. Finally, we need to insure that these two business sectors actively communicate with each other.

When we look at the workforce landscape in Michigan now, and over the next ten years, I think we will find the highest job growth in companies that have proactively and aggressively integrated new technologies, processes, and products into their existing business models.