New Survey Report Highlights the State of Georgia's Manufacturing Industry

Staff Report From Georgia CEO

Thursday, February 14th, 2019

Aprio, LLP, a nationally-recognized CPA-led business advisory firm, Georgia Tech's Georgia Manufacturing Extension Partnership and Kennesaw State University released a report today on the state of the manufacturing industry based on the results of the 2018 Georgia Manufacturing Survey.

"A Call to Action for Georgia Manufacturers" provides expert commentary and insights from manufacturing industry leaders, along with top-line results from the 2018 Georgia Manufacturing Survey.

The survey uncovers that, while many companies are struggling with perennial challenges such as workforce development, challenges with innovation and digitization also exist.

The survey found that larger manufacturers are making bold investments in digitization, while others are hanging back. Only 38 percent of small manufacturers in Georgia have implemented progressive digital technologies such as robots and RFID, compared with 71 percent of medium-sized and 84 percent of large manufacturers.

The results also indicate that workforce development is still a top issue for Georgia manufacturers. More than a third of manufacturers surveyed cite a lack of technically-skilled workers, while 25 percent still report problems meeting basic skills requirements like reading, writing and math. If manufacturers can't find employees who meet their basic needs, the question becomes, how will they find employees with more advanced skills sets, such as data science, as digitization continues to rise in the sector.

And while 80 percent of Georgia manufacturers say that they've introduced a new or significantly improved product or service in the past two years, only six percent are prioritizing innovation as a strategy for competing in the marketplace.

To keep pace with the speed of change, some New Year's resolutions for Georgia Manufacturers to consider include:

Own the skills gap by taking a more proactive role in creating an upwardly mobile workforce. This includes offering tuition reimbursement programs, bonuses and raises for those who seek additional training, as well as offering apprenticeships and cross-training opportunities.

Drive big innovation by transforming the business so it is positioned for the digital future. Create a long-term strategy and roadmap to chart the journey, and shorter-term goals to help prove ROI along the way.

Accelerate digitization by implementing new digital technologies like robots, cloud, blockchain and digital dashboards to keep pace.

Prepare for what's next. The move to digitization requires employees with new skills, like data science, and an increased focus on cybersecurity. Though the manufacturing industry is primed for cyberattacks, nearly 60 percent of Georgia manufacturers have yet to take action.

"Thanks to its favorable economic and policy landscape, plentiful labor pool and affordable cost of living, major manufacturers have poured billions of dollars of investment into new or expanded production facilities in the Peach State," said Adam Beckerman, partner-in-charge of Manufacturing and Distribution at Aprio. "Yet, Georgia's manufacturing industry is at a crossroad. For all that our state has to offer, too few Georgia manufacturers are making meaningful investments in workforce development, strategic innovation and digitization — three areas that will ultimately determine our economic destiny."

Today, Georgia manufacturers are in the throes of a fourth industrial revolution, also known as Industry 4.0. No sector of manufacturing will be immune. Even manufacturers in ostensibly "low-tech" sectors will eventually find themselves on the front lines of this digital revolution and in need of more highly-trained workers.

"Revolutions only come around so often. This is an exciting time for anyone in the manufacturing industry. Likewise, anyone holding onto 'the way things have always been done' is on the wrong side of history," said Karen J. Fite, director, GaMEP and Enterprise Innovation Institute at Georgia Tech. "Bold action starts with taking first steps."