IT Employment

Reality check for Obama's six proposed tech hubs: Job growth not immediate

President Obama announced his plans for six more tech hubs like the one in Youngstown, Ohio. While the goal is to create jobs, this is more of a long-term program.

 

SOTU
President Barack Obama delivers the State of the Union address in the House Chamber at the U.S. Capitol in Washington, D.C., Jan. 28, 2014.
 Image: Pete Souza/White House

The U.S. high-tech manufacturing comeback suddenly has a lot of people talking, from union laborers to the President of the United States. But, how many jobs is it really creating?

Tuesday night, in his fifth State of the Union address, President Obama announced plans to add six high-tech manufacturing hubs across the United States.

"Bipartisan bills in both houses could double the number of these hubs and the jobs they create. So, get those bills to my desk and put more Americans back to work," Obama said.

These hubs will be in addition to the pilot he launched in Youngstown, OH in 2013 and the second hub he unveiled in Raleigh, NC earlier this month. This follows his 2013 State of the Union address when he asked Congress to, "help create a network of fifteen of these hubs and guarantee that the next revolution in manufacturing is Made in America." Later that year in the summer he asked Congress to support an even larger network of 45 hubs, according to whitehouse.gov. But, what does this demand for high-tech manufacturing actually mean for the American economy? What does it mean for Youngstown?

What it looks like in Youngstown

Nearly a year after it's launch the The National Additive Manufacturing Innovation Institute in Youngstown, OH has proven itself a successful pilot for the high-tech hub initiative, kind of. It hasn't directly added many jobs, with only about 20 people working there; but Youngstown Mayor John McNally says that's not the point. The point is to increase the technology profile of Youngstown and increase the interplay between universities and corporations.  

Youngstown, which sits about halfway between Pittsburgh and Cleveland, was once a steel town like it's neighbors. Now, these communities that once collaborated on steel, are collaborating on technology and innovation. What was once the rust belt is becoming the tech belt.

"What we want to do is really encourage the growth of a regional, technical, industrial community," McNally said.  

The facility has brought attention and a certain level of pride to the city. McNally hopes they can leverage the to attract more talented faculty and students to Youngstown State University. The university has already received some research grants. He is also hoping it brings manufacturing experts and entrepreneurs to work with their business incubator that is attached to the facility.

The writing on the walls

It's seems that many transnational companies sensed the shift back to the Made in America trend for manufacturing before this address. Lenovo built a manufacturing line in Whitsett, NC and they were slated to hire over 100 workers. Tim Cook announced on Twitter the new Mac Pro would be manufactured in Austin. GE opened new assembly lines in Kentucky to build appliances. Even Foxconn, the maker of Apple's iPhone, is looking to move stateside.  

High-tech manufacturing jobs typically look a lot different than traditional manufacturing jobs. High-tech manufacturing requires far fewer workers as it is usually automated. But Obama's mission of creating jobs might not be fulfilled by the manufacturing facilities themselves. When visiting North Carolina State University to unveil the hub in Raleigh, the president explained that the hubs would encourage partnerships and foster new ideas that would drive other industries.

"They’ll help to lift up our communities," Obama said. "They’ll help spark the technology and research that will create the new industries, the good jobs required for folks to punch their ticket into the middle class.”  

In the case of Youngstown, the facility is lifting up their community. But, dropping the number of proposed hubs from 45 down to six does little to instill confidence in this plan. The president's plan is not a quick fix to add jobs, but it does have the potential as a long-term movement to drive technological engagement and innovation in its target cities.

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About

Conner Forrest is a Staff Writer for TechRepublic. He covers Google and startups and is passionate about the convergence of technology and culture.

24 comments
adornoe
adornoe

Obama is a socialist, with the mentality of a communist.


One only needs to examine "his" tech hub idea to notice how reminiscent they are to the old days of the old USSR, where the deal leaders kept coming up with many "5 year plans".  Those plans always failed, and everything Obama has tried, is communist in nature, and so, he and "his" ideas are bound to fail.


Government DOES NOT create jobs, and it doesn't create a good or economy, and it doesn't create growth.  Government only kills jobs, and it kills companies, and it kills economies. 


I put "his" within quotes because, Obama doesn't have an original idea that he could think up by himself.  All of his ideas come from his "handlers", and advisers.  Even the State of the Union speech came from "his" speechwriters, with the aid of Obama's advisers and handlers.  If some tech company could device a speech reading machine, or teleprompter that could sound "un-robotic", Obama could be out of "his" job.  That's all he's "good" at, reading speeches from a teleprompter.


Obama is the Google of government: throw all kinds of ideas at the wall, to see what sticks.  Obama hasn't had one good idea in his whole life. 

kitekrazy
kitekrazy

Government fixing and sponsoring things = bad.  Someone managed to gring up 5 things that government did that was worthwhile but it doesn't put a dent in the bucket of things they mess up. See War on Poverty.  Some of you are probably young and were weened through a liberal indoctrination called public education.  Wage isn't the only reason jobs are over seas.  There's a lot of red tape. If you wanted to start your own oil company you have to fill out 300 permits.  Companies have to deal with extreme environmentalism. Why not go out of the country?  We follow the same path as a broken Europe.

homesangel
homesangel

Just a little clarification,  the SOTU speech was Tuesday night, not Monday night

Shift4SMS
Shift4SMS

This is what you get when you combine book smarts with a college professor mentality and no real world experience running a business. It's all the regulations that are strangling jobs, not a lack of tech hubs. As someone far brighter than me once said, "government is not the solution to our problem; government is the problem."

SnoopDougEDoug
SnoopDougEDoug

Ah yes, the gummint is the bad guy. Corporations had nothing to do with the loss of manufacturing jobs in the US. I hope you realize that corporations are the ones who invested $$$ in politics/politicians to enable driving American jobs to other countries. You are blaming the monkey for the organ grinder's song.

mikep
mikep

The government is never very good at predicting what businesses succeed and which fail.  The government needs to reduce the regulations that brought on this decline in the first place, but then, they will never give up any control, just grasp at more and try to make people believe they know how to create jobs and stimulate the economy.


We can see how well they've done so far.

geek49203_z
geek49203_z

My credentials -- an IT guy living a few miles from the Research Triangle Park, a mile or so from the Lenovo headquarters, who grew up in a GM town.  Some notes:


1.  You can't government-order lightning strikes.  If the Raleigh-Durham area has a Research Triangle, and it employs "X" number of people in good jobs, then why not start 'em everywhere?  Or so the theory goes.  I left a town in Michigan that wanted to re-purpose some old factories into something of an "artist" community, as if you can order up the Left Bank of the Seine or something.  In Ohio, the Wright Brothers established a bit of the aviation industry, which survives in part, but that was a lightning strike.  Ditto with Henry Ford living in Dearborn when he built his first car -- at one time Indy had a bunch of auto markers, and that was the point of the Indianapolis Motor Speedway being built.  Ask Redmond WA what they did to "stimulate" the founding of Microsoft.


2.  When my grandfather was born, 90% of the USA lived or worked on a farm.  By the time he died, that was down to 15% or so.  Akin to agriculture in the 20th century, there is a decline WORLDWIDE in manufacturing jobs, even in China.  The reason why companies want to re-patriot their manufacturing is that the labor demands have negated the higher labor costs -- it doesn't take an army of highly-paid union workers to build anything, but rather a few highly skilled people running machines.  So if Obama wants to stimulate employment, he is swimming against the tides of history.


3.  As I said, I live near Research Triangle.  As I write this IBM is set for another massive layoff (not sure how many will go with the Lenovo sale).  Cisco laid off at the end of the year and maintains a hiring freeze.  Xerox laid off 500 last December here.  Lenovo and Microsoft, I hear, did some right-sizing as well.  And HP just sent out a round of RIF notices.  I've never seen the IT sector employment this weak.  If Obama was trying to leverage the IT/computer/phone sector as some sort of magic panacea, his timing is exceptionally bad.

HypnoToad72
HypnoToad72

Given Obama went to a private company to make the obromneycare website, continued bush tax cuts, ramped up the auto bailouts Bush started in 2008 with that stopgap... Obama is as socialist as you are.

Spiky989
Spiky989

@adornoe I agree, Obama is a socialist, communist, marxist, you name it. People control their own destiny, not the government. Government is NOT the solution! Government IS the problem!

HypnoToad72
HypnoToad72

So you are equally against any private sector entity or activity that received taxpayer money or any tax break?

Spiky989
Spiky989

@kitekrazy I like what I'm reading in all these posts. I think that people are finally waking up, and not falling for all the liberal lies of the democrats and the media! It's about time people start seeing the "writing on the wall", and stop drinking the liberal koolaid!

HypnoToad72
HypnoToad72

The world is what we make of it, together.

And if you wsnt to quote dead people,

"Higher prices and caused by higher profits

Not higher wages" - the same guy who said "government is the problem", got elected, then proved it.

Nuff said

Browser98007
Browser98007

@SnoopDougEDoug "Government" should do what "government" is supposed to do. Protect the borders, maintain a loose confederation of states, and get out of the way of the private sector! Government should not be creating programs and getting involved in the private sector. They have proven they don't know how to get anything done at this level. They can create the climate with tax incentives, but that should be the limit to which they meddle.


Regarding "evil" corporations sending jobs offshore (many are coming back, BTW), consumers drive the behavior. Keep buying the cheapest products without regard to manufacture location, and you will get offshore manufactured products. If everyone decided to buy 50% "Made in USA", you would see some drastic changes. But be ready to pay a bit more. That's part of the equation.

Shift4SMS
Shift4SMS

@SnoopDougEDoug

My mother owns a small skin care product manufacturing company in California. She gets tag teamed by the Federal FDA and the California Department of Public Health, CA's version of the FDA -- each with their own agendas. At the same time she gets tag teamed by the IRS and the California Franchise Tax Board, CA's version of the IRS. Sprinkle in a few visits for Federal and State EPA. She has been in business for 40+ years without any major violations from any of these organizations yet most parolees don't go through as much scrutiny. As far as I am concerned, the government is evil. They should be doing national defense and roads and that's about it.

gathagan
gathagan

@SnoopDougEDoug

Government may not always be the bad guy, but it certainly is the least likely of any entity to produce real, lasting jobs.
That's not a function of government.

Often times it is the government regulations that hamper business growth, especially among smaller businesses.
As to driving jobs to other countries, it is often you and I, the consumers, in our never-ending demand for lower prices, that cause the companies to look for cheaper labor forces in other countries.

In many cases, the American companies face large tariffs in other countries that creates a large disadvantage when they try to sell their goods/services abroad.


There's plenty of blame to go around, but governments are rarely, if ever, the source of jobs creation. 

Shift4SMS
Shift4SMS

@SnoopDougEDoug And this government that has been bought by these evil corporations will save us all? If these corporations are so evil, won't these hubs simply attract evil? Or is the assumption that individual ma and pa startups will flock to these hubs to start their own angelic corporations that'll never turn evil -- since all corporations are evil?

TRgscratch
TRgscratch

@mikep   If the members of government could have a reasonable, rational discussion about what regulations should be created and where, we would all be better off.  Members of the current government have decided to not be reasonable and have refused to have rational discussions.

HypnoToad72
HypnoToad72

So apart from bbitching what are you doing? Getting more corporate welfarr?

TRgscratch
TRgscratch

@Shift4SMS@SnoopDougEDoug   In order to build a road, "the government" closed the lake I used to swim at.  Why should we let "the government" build roads?


In order to do national defense, "the government" got my brother killed.  Why should we let "the government" do national defense ?

atarilynx
atarilynx

@gathagan @SnoopDougEDoug 


I could not disagree more.


While I do agree that government entities don't have much incentive to streamline their operations. I do wholeheartedly disagree with the mentality that goverment programs cannot create jobs.


To be brief and to the point, let me state a few VERY successful goverment sponsored or influenced ventures:


The Apollo Moon landings (the new materials and processes discovered were largely made public...so all businesses could benefit. Mylar, velcro, toothpaste tubes, and various other manufacturing techniques)


The Hoover Dam (put TONS of Americans back to work during the Great Depression, repaid the initial investment in full and is completely self-funded, and lifted the American spirits to show that we can still achieve great things)


The INTERNET (started out as a government program in the Department of Defence called ARPANET) Need I say more how it has revolutionized commerce and the world?


GPS Technology (No company on earth could have started and established GPS technology. The immense amount of technical know-how, capital funding, and unestablished user base would have scared away any investor...even Sir Richard Branson! Never mind that GPS technology would not have been made possible without NASA)


So please, think before shooting off your mouth. Government doesn't necessarily equal BAD.


And PLEASE don't forget it is government regulations that keep people HEALTHY and protect people from business. I live in a city that is now dealing with TWICE the federal limits on air pollution. Much of that is due to our government officials NOT cracking down on business pollutants. If it weren't for those individuals that actually DO their part, we would be even worse off!!

Shift4SMS
Shift4SMS

@TRgscratch Because not having national roads or national defense means not having a country. Sorry about your brother. The "government" got him killed, not the terrorists or enemy he was fighting?

flotsam70
flotsam70

@atarilynx  You MUST believe every word in THIS comment because I'm STRATEGICALLY (aka randomly) choosing words I deem proof POSITIVE and yelling them at YOU.