UT Report: New Technologies, Skilled Workforce Can Beat National Manufacturing Slump

KNOXVILLE — Not surprisingly, a recent University of Tennessee report indicates manufacturing jobs in Tennessee are mirroring a national trend of decline, but that same information lends strong support for a renewed emphasis on investing in high-technology education.

While analysts expected to see a continued decline in manufacturing jobs, the report is not a grim forecast for workers. UT is continuing to focus on educating a workforce that will entice progressive enterprises to locate in the state — and ultimately result in more and better-paying jobs.

The UT Institute for Public Service this week released the report on trends in manufacturing across the state. The study, conducted by the Center for Business and Economic Research (CBER) at UT Knoxville, focuses on the global and local environments in which manufacturers operate; trends across industries; and key strengths and weaknesses of different industrial sectors.

Among the findings, the report indicates a decline in the total number of manufacturing firms and the number of workers employed by manufacturers in Tennessee. Despite the reduction in the number of firms and number of workers, manufacturing remains the fourth largest employment sector, generating almost 20 percent of Tennessee’s gross state product each year.

“While manufacturing employment and the number of manufacturing establishments have fallen, industrial output continues to expand, and workers continue to earn good wages and benefits,” said Matt Murray, associate director of CBER.

“To stay competitive, manufacturers are investing in technologies and increasing production capacity. These investments mean new firm locations and expansions will continue to take place, and the need for a better-trained workforce to support increased production will remain,” he said.

“Policies that encourage investments in productive capacity and worker training will be essential to the survival and prosperity of Tennessee’s manufacturing establishments in the years ahead,” Murray said.

Despite nationwide job losses, 21 counties in Tennessee were able to show job gains between 1997 and 2006.

In fiscal year 2007, Tennessee companies reported more than $868 million in economic impact as a direct result of working with UT’s statewide Institute for Public Service. IPS’ Center for Industrial Services helped businesses create or retain nearly 14,000 jobs, and the agency assisted more than 300 Tennessee firms last year.

“The university is working hard to help communities and businesses understand the changes to the economy and to overcome any potential negative effects the manufacturing decline might have on Tennesseans,” said Charles Shoopman, director of statewide initiatives for IPS. “Research at the university is creating new technologies that can help manufacturers produce more durable goods quicker.”

Earlier this month, UT President Dr. John Petersen emphasized the university’s focus on improving overall graduation rates, and rates for underrepresented groups and students with degrees in science, technology, engineering and math.

“These graduates are going to create a better future for Tennessee manufacturing as they bring new ideas, technologies and capabilities to Tennessee’s workforce,” Shoopman said.

One program that already helps entrepreneurs take new technologies from concept to market is UT’s Small Business Innovation Research/Small Business Technology Transfer (SBIR/STTR) Proposal Assistance Center. SBIR/STTR provides funding for new and innovative “high-risk” technology companies in Tennessee to understand grant proposal criteria, identify business partners, and take a product from development to commercialization. Last year, the center helped small businesses secure $4.4 million in funds; 12 companies received awards totaling $3.9 million in funds.

Additionally, the UT Research Foundation has assisted more than 60 start-up companies based on intellectual property. The foundation identifies promising new inventions, manages intellectual property protection matters and markets innovative technologies to the private sector. The foundation also licenses university-developed technologies to promote commercialization.

In June, UT opened a new technology business incubator built in partnership with Knox County, the Tennessee Valley Authority, the Knoxville Utilities Board, the state of Tennessee and the U.S. Economic Development Administration. The UT Research Foundation oversees the incubator.

The full report of “Looking for Opportunity in Tennessee’s Manufacturing Sector” is available at http://www.ips.tennessee.edu/?id=32.


Contacts:

Matt Murray, CBER, (865) 974-6084, mmurray1@utk.edu

Tom Looney, IPS, (865) 974-6587, tom.looney@tennessee.edu