sealPurdue News

February 26, 2002

Manufacturing: Indiana's past ... and future

James J. Solberg
Purdue University's Ransburg Professor of Manufacturing

We've heard many calls for Indiana to become a high-technology state, but that doesn't mean we can – or should – forget about manufacturing. Manufacturing has played a pivotal role in the state's past, and it has an equally important place in Indiana's future.

James J. Solberg

Thirty-one percent of Indiana's gross product comes from manufacturing, according to 1999 census data. That is the highest share in the nation and almost twice the national average.

The percentage of employment in manufacturing also is the highest in the nation and far above the national average. Manufacturing jobs tend to pay more than in other sectors, but the difference is especially dramatic in Indiana. If you compare average wages in manufacturing (about $41,000) to the average of all other sectors combined (about $21,000), the ratio is almost double.

More than any other state, Indiana’s economy depends on manufacturing. You can argue about whether that is a good or bad distinction, but the importance of manufacturing to Indiana is indisputable.

There is no doubt that manufacturing is changing. Globalization, made possible by vastly improved transportation, communication, and information technologies, means companies can shift their low-skill production operations to areas of the world where wages are much lower. But globalization also offers opportunities to compete in markets that were too remote in the past.

The key to success in the new global economy is "advanced manufacturing." This phrase connotes progress in virtually every aspect of manufacturing: design methods, process technology, worker skills, organizational structures, and management practices. Further, this must take place in all of Indiana's manufacturing sectors: automotive, food processing, electronics, steel, and all the others. Large companies and small, throughout the state, from top to bottom – everything must adapt to the realities of the new economy.

And while we certainly must utilize high technology in transforming manufacturing, it is even more important that we talk to each other. Although most manufacturing leaders are well aware of the challenges, each has only a limited perspective on the problems and limited ability to manage the changes. There is a danger that uncoordinated attempts at progress will result in the "curse of unintended consequences." Well-intended plans, implemented independently, could end up working at cross-purposes and defeat what we all hope to achieve – sustained prosperity in Indiana.

It is in this context in which we at Purdue, working with the Central Indiana Corporate Partnership, have been planning an advanced manufacturing summit on the West Lafayette campus March 19-20. The intent is to assemble a large and diverse group of stakeholders to share their thinking about this necessary transformation.

We at Purdue have some contributions to make, but we are really going to be doing more listening than talking. Like everyone else, we have a limited perspective on the big issues facing Indiana's future and have a great deal to learn about how best to work in concert.

Purdue's President Martin C. Jischke and Central Indiana Corporate Partnership President David Goodrich will welcome an unprecedented assemblage of the state's best minds to a wide-ranging discussion about how we can work together for the future of Indiana and its citizens. We've arranged parallel panel sessions on products and industry sectors, and numerous cross-cutting subtopics.

We are hopeful that this meeting can establish a continuing dialogue to create a common vision and some concrete plans to help Indiana manufacturers address the present needs and to get out ahead of the challenges of the future.

So mark March 19-20 down on your calendar, register for the summit, and bring your ideas, vision and passion to West Lafayette. Registration is free.

Participants may register for the Advanced Manufacturing Summit by phone, (765) 494-0743, or online.