Awareness

In January 2020, I was introduced to some interesting statistics about the manufacturing sector in our eleven-county Northeast Indiana region that have had my nerdy economic development and risk management wheels turning ever since.  While it may not seem the most urgent or pressing matter our city and region face, I cannot help but wonder what failing to embrace its significance might mean for Fort Wayne over the course of the next 20 years. Kristin Marcuccilli

A 2019 study conducted by the Community Research Institute (CRI) at Purdue University Fort Wayne found that seven of our eleven counties are in the top 5 percent of all 3,200 counties nationally for concentration of manufacturing employment or wages.[1]   The manufacturing sector is so extensive it accounts for roughly 30 percent of jobs in the region.  In ten out of eleven counties, that number is closer to 50 percent.  According to Rachel E. Blakeman, J.D., of CRI, Indiana’s dependence on manufacturing is double the rate of the nation.  The National Bureau of Labor Statistics from January 2020 quantifies the region’s employment and wage statistics at 95,356 jobs representing 1,457 employers and average wages of $51,355 per year.[2] [3] 

Our national ranking, as a result of this overwhelming concentration in the manufacturing sector, is astounding.  Today, our region can proudly boast the strength of its manufacturing assets, which are highly diversified and fuel our regional economic growth.  In banking, we often talk about concentration risk.  Certain asset concentrations can bring strength and propel growth; however, they can also become liabilities and even turn into threats. As we consider the significance of this for Fort Wayne and the surrounding region and look to the next 20 years, how impactful is this manufacturing concentration? Why should we care?  How do we ensure this manufacturing focus remains a continuous opportunity for delivering prosperity? What could make this diversified strength turn into a threat? To answer these questions, I think it’s important that we first become aware of how rapidly and radically the manufacturing sector, like many industries, is changing through what many call the rise of the “Manufacturing Renaissance.”

An article from Cerasis defining the Manufacturing Renaissance shares that it “refers to a medieval period in which art, technology, music, design and culture changed drastically from tradition.  Most of what our modern world considers the greatest achievements in history come from this medieval time period.  This change is exactly what baby boomers are feeling about today’s manufacturing industry.  It’s radically different from what they know, and change is shocking.  However, change is a necessary advancement, and society will benefit from the manufacturing industries world-wide change.”[4]  
A colleague of mine who works for a California-based, high-tech manufacturing company recently shared that one of the biggest mistakes a company can make is to hold on to the historical legacy of the organization as its strength.  Even worse, he shared, if the broader community holds the same thinking and maintains any level of arrogance to believe they are untouchable, they’re wrong. “If we’re waiting, we’re in trouble,” said David Roberts, Chief Innovation Officer for the Indiana Economic Development Corporation.[5]  “Change is happening, and if we simply hunker down, the odds of succeeding through the Renaissance are low,” shares Roberts.

Technology is undoubtedly powering the Renaissance, and the levels of agility, learning, and adaptation required to embrace the digital world are overwhelming.  As Adam Robinson of Cerasis points out, “Understanding the digital world is like learning a new language, and the nostalgia of the days of past manufacturing are a language that is quickly going out of style.”[6] It is imperative that we become keenly aware, maybe even obsess a bit, about digital transformation.

Simultaneously, we should recognize the intersection that this transformation has with our workforce readiness and talent attraction initiatives in and around Fort Wayne.  I believe that many often worry that automation is eliminating jobs.  John Sampson, former President and CEO of the Northeast Indiana Regional Partnership, shares “According to analysis by the Chicago Federal Reserve, automation is not reducing manufacturing jobs.  Rather, it is driving a change in the characterization of the manufacturing workforce.”  Sampson continues, “Automation is not the threat.  It is a competitive solution.  The real threat to us is reluctance and delay in embracing technology and in speedy transition to prepare our workforce with essential skills necessary to compete in a ruthless global marketplace.  The strength and legacy of our region in manufacturing is at risk by rapidly emerging technologies which demand a skilled workforce.  We must confront this head-on as we have done many times before.”[7] 

David Roberts of the IEDC agrees. “There will be a moment when certain jobs aren’t coming back, but different jobs are being created,” Roberts says.  “The really good jobs in the 4.0 renaissance will likely pay more and will call for digitally upskilled workers who are capable of delivering higher quality and a higher quantity of product.” As a city and a region striving to become a nationally recognized economy, nothing could have a more positive impact or alternatively, a negative blow to our job and wage growth than supporting the success of our manufacturing sector.   I will say it again — our awareness of what is happening is key.  Moreover, our ability to foster an environment where change brings us energy, technology brings us competitiveness, and where first-class education brings us economic prosperity has never been more pressing. 

I’ve wrestled with how, exactly, businesses and individual leaders in our community can support this mindset of change for the 1,457 small and large manufacturers who are working to expand their productivity and impact.  Jim Schellinger, Indiana’s former Secretary of Commerce, reminded me why the support of manufacturing is critical to the future of Indiana.  “These (manufacturers) are our customers,” Schellinger said.[8]  “We’re talking about hundreds of thousands of jobs.  These businesses, both large and small, have shown their loyalty to Indiana.  They are investing millions to recreate themselves with technology that will propel us in the global economy.  They aren’t investing to eliminate; they’re investing to double or triple their production.  We owe it to them to take care of them,” Schellinger adds.  Two specific ways come to mind for ways we can directly take care of these transformative manufacturing businesses.  The first is to support high-tech initiatives.  We may need to support the start-up community in ways that we haven’t before.  It may mean investing in an entrepreneur who might have the answer for how a manufacturer reinvents its operation.  Perhaps it will mean an investment in venture capital funds which are specifically tied to direct local impact through tech start-ups.  In any case, if we haven’t been paying attention to the success of innovation and entrepreneurship in the Northeast Indiana region, the time is now.  High-tech startups will likely yield one of the leading sources of net new job growth in the Fort Wayne market.

The second way that businesses and individuals can directly influence the success of the Manufacturing Renaissance is through continuous and intentional support of our workforce development initiatives that directly amplify manufacturing and tech jobs.  We are blessed with numerous institutions, organizations and academies who are reinventing themselves for the digital economy.  Investment of time and money, the promotion of internships, and strategic partnerships in workforce development can and will make a difference to our strength and resilience.

Without question, the pandemic, civil unrest and economic recession of this year have collectively disrupted our nation in ways we have not seen before.  Still, 2020 has also brought out the very best in Indiana’s manufacturing sector.  Many local manufacturers creatively maneuvered their production lines to support the needs of the American public by producing personal protective equipment, hand sanitizer and ventilators.  We have witnessed what agility and skill can yield in times of crisis, and it has likely given us a glimpse of what can and will be for our future in advanced manufacturing.  Many suggest that the most innovative and agile companies will drive our economy, especially in manufacturing.  Those who get stuck in a rhythm will not enable growth and become assets who, over time, shift to liabilities.  In the fiercely competitive 4.0 manufacturing economy, the states and regions who are embracing the technology and digital transformation will outcompete those who are unwilling to change. It is my hope that our region, anchored by the steady momentum of Fort Wayne and its surrounding communities, will become keenly aware of the looming detriment to our local economy and our quality of life if the right people and the right organizations fail to take notice. 

Julia Pollak, labor economist at ZipRecruiter, projected that three of the nation’s top ten cities at the greatest risk of job loss in a manufacturing downturn are in Indiana.[9]  Something that keeps me up at night (and I hope it keeps you up at night, too) is the death of Fort Wayne by way of vulnerable manufacturers losing their operating models and their businesses.   We have 1,457 manufacturers to encourage, influence, and support.  We have countless more companies who are waiting to make Fort Wayne their next home.  I urge you, as an individual citizen, an influencer or a business owner to act. 

This essay is part of a citizen-led book project in Fort Wayne called FORTHCOMING: Considering the Future State of Our City. To learn more and read additional essays, visit the Foreword and Preface.

Kristin Marcuccilli is a strategic, customer-focused, results-driven, team builder. As Chief Operating Officer at STAR Financial Bank, she oversees Information Technology, Information Security, Business Analysis & Project Management, Bank Operations, and Facilities & Construction across STAR’s branch network.  Marcuccilli serves her community as a board member for the Fort Wayne Children’s Zoo, Indiana State Chamber of Commerce, and Indiana Technology & Innovation Association. She also serves on the Board of Directors and as Entrepreneurship Committee vice chair for the Indiana Economic Development Corporation. In 2018, she was honored as a Greater Fort Wayne Business Weekly “Forty Under 40” award recipient and was also recognized nationally as a BankBeat Rising Star in Banking. In 2019, she joined the University of Notre Dame's newest advisory council, supporting the IDEA Center's work toward commercialization and entrepreneurial activities. Marcuccilli earned a bachelor’s degree from the University of Notre Dame, an MBA from Indiana University, and is a graduate of the American Bankers Association Stonier Graduate School of Banking.