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IMA Executive News & Views Blog

Can Mom and Pop Manufacturers Survive the Skills Gap?

Industrial Trades Pros is an IMA B2B Partner

We all know that the United States is in the middle of a skilled labor shortage. There are not enough mechanics, machinists, welders and other important tradesmen and tradeswomen. But how could this skills gap impact the make-up and size of companies operating within our industries?

recent study by Rajshree Agarwal and Serguey Braguinsky of the University of Maryland and Atsushi Ohyama of Hitotsubashi University focusing on Japanese cotton-spinning manufacturers in the 19th century reveals a similar situation to the one that we face today. As the supply of high skilled engineers tightened, the firms that were able to maintain what they call the highest “center of gravity” successfully attracted and retained the best talent and achieved growth. These companies took aggressive steps to attract skilled workers and modified their cultures to welcome that talent into their management. The firms that made these adjustments thrived, acquired smaller companies and grew. The ones that did not vanished. The result was a major consolidation of manufacturing employers to a dominant seven.

How do the events of the 19th century in Japan shed light on the future of our industrial economy? We now face a future of manufacturing “winners” and “losers” based largely on our ability to attract talent. We believe mom and pop manufacturers as a category are most susceptible to these pressures. The outcome is not predetermined but the pressure is on for smaller companies to raise the bar on the way they attract, train and retain their people so they can compete with companies that can more easily achieve this “center of gravity.”

With more client orders available than most manufacturers have the capacity for, the ability to find skilled trades talent will be the key to growth.


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