Oregon Must Solve Fiscal Challenges, Invest in Future

Published Tuesday, February 6, 2018
by Jon Owens

The McKinsey Global Institute projects that half of current work activity could be automated by 2055 – or even sooner. While that does not mean there will be a 50 percent decline in employment, the projection has important implications for Oregon, which is more dependent on manufacturing than other Western states.

To retain these jobs – and to capitalize on new opportunities that will arise – Oregon must prepare its workforce for the inevitable change in manufacturing technology and methods. Helping Oregonians develop the skills essential to maintain their jobs and thrive in an automated workplace will require increased investment in education and training by both private employers and the government – investment that is possible only if Oregon corrects its fiscal imbalance.

In the past, industrial transformations have delivered improved worker productivity and safety, higher living standards and better health. That potential exists again, but only if we make the right investments. We are not meeting the challenge. Economists point to the rising share of prime-age males (25 to 54 years old) without work as one sign that automation has left too many workers with inadequate skills.

At the Oregon Business Plan Leadership Summit in December, futurist Steve Brown described what businesses and communities must do to make the transition: educate, adapt and embrace. For ESCO and many other manufacturers, this approach comes naturally. We have a long history of educating our employees, adapting to new demands from our customers and embracing change.

These changes are taking place in a global economy, where ESCO has operations in 18 countries with about 3,000 employees worldwide. For our operations to remain competitive, we need a workforce that is attracted to, and skilled in, emerging technologies.

ESCO is eager to confront these challenges, as we have done in the past. Founded in Portland in 1913 as a steel foundry company, ESCO’s early years catered largely to the Northwest timber industry. We now provide products and services globally for a variety of industries. We have succeeded in lasting that long by continually evolving to meet opportunity and adapt to change. In the 1950s and 1960s, we expanded our business through licensee relationships around the world. In the 1970s, we embraced a wave of manufacturing advancement by modernizing our Portland facilities, and opening new plants in Mississippi and Canada. By the 1990s, the age of globalization was well underway, and we started a direct expansion around the world Today, ESCO is a truly global company, with sales, distribution and manufacturing operations around the world.

For many companies like ESCO, the question remains: what will we need our workers to do in the future? Even futurists like Brown shy away from specific predictions. However, we know our manufacturing plants will operate differently in the future, and we will need technologically skilled employees who are ready to adapt and change.

Successful businesses must anticipate changes, and invest in education and training to grow and adapt. Recently, assessing potential customer needs in areas of both quality and productivity, ESCO made significant investments to enhance technology and automation at our plant in Newton, Mississippi. These advancements inspired a partnership with local community colleges, which provide technically trained candidates who are ready to contribute. Similarly, in Portland, we sponsored engineers to return to school, and earn advanced automation degrees. Support for higher education in emerging technologies will enable our skilled workforce to successfully contribute to a vibrant and changing manufacturing economy.

Successful states must do the same for their citizens. Ideally, employers and governments invest together to prepare the workforce for the future to develop stronger communities for us all. Oregon has taken steps recently to improve workforce training and development. The Oregon Manufacturing Innovation Center in Scappoose will be an important space to help workers and employers adapt to automation and other changes in production technologies. Measure 98, approved by voters in 2016, increased investment in continuing education – though the Legislature has not fully funded the measure. 

Oregon has a better chance to produce its workforce of the future if the state creates a stable, sustainable fiscal foundation, and makes adequate investment in training and education, especially for Science, Technology, Engineering and Mathematics (STEM) programs.

Jon Owens is president & chief operating officer of ESCO and a member of the Oregon Business & Industry board of directors. This guest column appeared in The Sunday Oregonian on February 4, 2018.