General Electric’s announcement last week to locate its multimillion-dollar thin-film solar manufacturing plant in Aurora means more to Colorado than just jobs and investment. It sends a broad message into the marketplace that the changes occurring in the clean-tech sector continue to leapfrog one another. The result is lower costs for electricity production and increasing numbers of advanced manufacturing technologies, and it just might be at the forefront of a national manufacturing resurgence.
Henry Ford once said, “A company that makes nothing but money is a poor kind of company.” He was talking about the value of manufacturing to our national economy. But since the 1970s, the U.S. has lost manufacturing jobs to lower-cost labor markets; first to Japan and Korea, then to Mexico, India, Taiwan and Singapore.
As the nation’s economy grew rapidly in the 1980s (via growth in the “Services” sector), manufacturing declined. The U.S. continued to be the world’s center of innovation, but it did not become the world’s center of manufactured products created by innovation. The 20th century revolution in steelmaking, for example, was invented in the U.S., but the “basic oxygen furnace” was developed commercially in Japan. The Japanese would go on to dominate the world’s steel industry, while steel cities such as Pittsburgh sagged. China now dominates manufacturing globally.
Today’s manufacturing jobs barely resemble those of the 1950s. Computer- aided manufacturing requires technological competencies that rival other technology jobs. And the pay scales reflect it. For a young person entering the manufacturing sector, a four-year college degree is not always a requirement, but training beyond high school is crucial. Many of the jobs at GE PrimeStar Solar will be technology jobs.
A component of building a strong economy is creating “pathways” to the middle class for workers. Manufacturing is one of those pathways, but a shrinking one. There are only two major pathways today in Colorado: construction and medical careers. The resurgence of manufacturing, led by companies such as GE, Vestas, Ascent and Abound, holds promise for increasing manufacturing employment in metro Denver. We should see this as good news for workers, our state and the nation.
The diminishing role of manufacturing in the nation is also reflected in metro Denver. In 1980, 15.6 percent of workers were employed in manufacturing. By 2010, that percentage dropped to 5.6 percent. Manufacturing is one of the most productive segments in our economy. A drop in employment is frequently equated to increased productivity. Not so for us. The contribution to gross state product by manufacturing dropped between 1990 and 2010.
But the impact of clean tech on manufacturing has recently increased its portion of Colorado GDP. Between 2000 and 2010, manufacturing’s GDP actually increased from its all-time low of 6.7 percent to 7.4 percent.
How else will GE’s significant presence in Colorado impact our “brand”? Metro Denver has come a long way from the days of the Brown Cloud. We are now seen as a center of clean tech and other cutting-edge innovations in aerospace, bioscience, software, aviation and broadcast/telecom. Our commitments to our physical environment draw international accolades, even though our sensitive environment compels attentiveness to its quality. GE’s substantial investments in Colorado will only further our reputation as a center of energy innovation and global business activity.
And it might just help still the voices of those who claim that the New Energy Economy is a false one. When a Fortune 6 company chooses your community to pioneer a new energy technology, it means that millions of dollars of research have gone into its potential financial success and its ability to sustain financial returns over time. The Big Kids have come to play. They have seen what we see. Projected global energy demand requires that tomorrow’s energy mix be a cornucopia of sources — fossil, solar, wind, geothermal, biomass, ocean currents, etc. Smart companies are getting there before the crowd. Let’s all watch GE’s technological horsepower bring this piece to the global energy puzzle and manufacture it right here in Colorado. And let’s all be prepared to be amazed.
Tom Clark is the executive vice president of Metro Denver Economic Development Corp. Reach him at tom.clark@metrodenver.org.
