This initiative has gained a great deal of discussion and microphone time. But will investment incentives and additional government programs solve the issue?
Or more old-fashioned American ingenuity needed?
Historical Landscape
Social and Political
The landscape is clear. The supply chain for products (and yes, labor too) are excessively stressed. Whether it be food, building supplies, baby formula, or technology chips. For many in the public that did not understand the supply chain concept ... probably for the first time ... the public has gained a visual sense of this concept. Just visit the supermarket and look in the meat, frozen food, and produce departments. Display cases empty, reorganized, or being removed from the retail floor.
As we have seen in the last year, the manufacturing and supply chain challenge has extended to the semi-conductor and chip segment. The post-February 2020 (avoiding that word) period has realized a severe shortage of technology components affecting not only technology devices but also secondary products such as automobiles, appliances, and tools.
The Bill
So after many months of legislative and political horse-trading, we have a new "Chip" bill signed into law by the Federal government. The details of the Chips and Science ...
- Legislation to boost U.S. competitiveness with China by allocating billions of dollars toward domestic semiconductor manufacturing and science research. Final Vote: House 243-187, Senate 64-33
- About $52 billion would go to microchip manufacturers to incentivize construction of domestic semiconductor fabrication plants — or “fabs” — to make the chips, which are used in a wide variety of products, including motor vehicles, cellphones, medical equipment and military weapons. (CNBC)
- Additionally, the bill also includes about $100 billion in spending over the next five years in programs such as the NSF and regional technology hubs.
- From the research and past history, the last initiative has many questions.
Situation
There is no argument that the supply chain is an issue and will continue to disrupt economic growth and our lives for some period of time. Our Country absolutely needs to reduce the reliance of foreign trade on this segment of products, relying on our own capital markets, leadership, workforce and, yes, good old fashioned American ingenuity. We built this country on it ... and still can build/sustain it with the willingness and courage.
The United States used to make 40 percent of the world's chips, but not makes about 12 percent and essentially none of the leading-edge chips.
Great! The infusion of capital and programs from the Federal Government could create the genesis of expanding this important manufacturing market. It may reverse the substantial decline, since the early 1980s, associated with Federal research and development programs. Incentivize and create incubator-style environment for this industry.
Some in Congress said that this will be the most extraordinary achievements for the United States. However, will it be successful? Is there any issues that they missed? So how did we get to this point? How did it go unoticed for so long?
There is one significant issue that I believe our Government has not considered.
The Crack in the Legislation Strategy
Over the last year, I have read over 300 articles on the current state of business technology positions and on the workplace as well as labor statistics from the Bureau of Labor Statistics and other credible sources (LinkedIn, McKinsey, etc.). Combine these three issues and you the missing ingredient ... do you sense the missing ingredient?
Unless you are in a bunker, all STEM statistics associated with majors, focus in our high schools, perceptions by young people, graduates, and workforce quit rates are not trending in the right direction. Then, add in the gender disparity issues for technology and STEM occupations, it just crumbles.
Four occupations will be needed to staff these new manufacturing facilities and initiatives in the Federal bill. These occupations are: computer hardware engineers, electrical engineers, supervisors of production workers supervisors and assemblers/fabricators.
Considering the BLS, statistics, the average number of openings over the next decade are strong. Coincidentally, production robotics will probably be integrated into additional manufacturing processes. However, various jobs associated with the production, maintenance and design of this production technology will be needed with the additional robotics integration.
So will the additional investment then increase the BLS projections?
With the number of engineering majors in the U.S. declining, how will these new plants be able to operate without the engineers and production workers. The workplace issues over the last two years, including the employee quit rates, will only exasperate this issue.
Final Thoughts
Maybe incentivizing people to major in STEM based occupations and majors would be a great use of Federal financial aid than other options currently being discussed. As I have noted in my research, maybe now its time to be serious to integrate STEM education in our junior and senior high school programs across the country. Instead of companies sending funds overseas for STEM labor, maybe the "STEM employment trade deficit" should be evaluated.
Now is the time to implement truly sustainable solutions. Not over-simplified solutions that will not resolve the entire issue.