The digital skills gap is an Achille’s heel for manufacturers. This must be addressed if the potential of digital operations is to be fulfilled.

Are your workers struggling to keep up with the introduction of new technologies? Perhaps your organization has a more fundamental problem: jobs, at all levels, cannot be filled?

The extent of the digital skills gap in manufacturing is illustrated by a range of concerning statistics, many of which have been worsened by COVID-19’s impact.

The widening digital skills gap

Unfilled jobs in the US manufacturing sector could grow to 2.1 million by the end of the decade, according to a recent study by The Manufacturing Institute. In its report ‘Creating pathways for tomorrow’s workforce today’, it warns that the digital skills gap, if unaddressed, will cost the country’s economy $1 trillion by 2030.

Despite positive indicators and sentiment in the latest National Association of Manufacturers’ Outlook Survey of Quarter 3, 2021, employee vacancies continue to be identified as a major concern, with 81.5% of respondents saying that workforce shortages represent the biggest downside risk to manufacturers’ prospects.

The scope of the problem has been worsening for some time. As US manufacturers have escalated their adoption of Industry 4.0 technologies, and stepped up their transformations toward modern production systems and digital maturity, skills have not kept pace. Paradoxically, the increasing reliance on digital technologies has crystalized the importance of people’s digital capabilities to orchestrate digital systems and capitalize on their potential. It has also highlighted the sobering reality that these digital skills are in short supply.

Understanding the causes

Manufacturing’s digital skills gap is rooted in a number of factors, including global megatrends. Globalization has driven the need for competitiveness, squeezing margins, in turn constraining budgets, and pressurizing time, for training and upskilling.

Demographic shifts are transitioning the workforce. The older generations among current employees have the traditional, core competencies, and often carry the firm’s institutional ways-of-working and knowledge. But they may be nearing retirement – or be more resistant to change, and reluctant to learn new skills.

New generations entering the workplace are digitally aware and enabled, but have different expectations of employment and employers. Despite basic starting remuneration being double the country’s minimum wage, younger people perceive manufacturing as offering minimal prospects, routine work, and suboptimal work-life balance.

Further, science, technology, engineering and mathematics (STEM) skillsets are underdeveloped in US school and college curricula, and – unlike Germany, for example – a system of vocational and apprenticeship programs is largely absent.

New frontiers, new skills

The paradigm of digital manufacturing requires digital skills to use next-generation software design technologies; to operate augmented reality simulation tools or co-bot machinery; to program additive manufacturing systems; to manipulate management tools which bring data to life, and to understand this data in making real-time decisions. These are competencies which require both specialist skills and general digital affinity – and necessitate lengthy initial training and ongoing skills updating.

However, they must be augmented by creative and critical thinking abilities, problem-solving capability, and a willingness to foster soft skills toward an experimental or innovative mindset, and teamwork.

Currently, manufacturers are feeling the absence of all such skills, across the spectrum of specialized to generalized, and all strata, from entry-level, unskilled positions to mid-level functions such as computer numerical control (CNC) machinists, and senior positions such as design engineers and integrated technology officers.

Close the gap

There are three distinct areas to address to close the digital skills gap. They are interlinked, and a holistic strategy is both necessary and appropriate.

  1. Attraction and recruitment. Manufacturers must be thinking about how to get school leavers and college graduates to say, “I want to work in manufacturing.” A composite approach to widening the talent pipeline involves meaningful diversity, equity and inclusivity (DEI) initiatives, and invigorating and amplifying the company brand through purpose-led social involvement.

The most important angle is a longer-term one: developing talent ecosystems necessitates collaboration. Explore partnerships with educational institutions and government bodies; form industry or sector-specific training bodies; seek best-practice opportunities locally and internationally through affiliation with the World Economic Forum’s Global Network of Advanced Manufacturing Hubs (of which Michigan and New England are member zones), or industry body conveners such as The Manufacturing Institute.

  1. Training, knowledge-building – and more training. The pace of job specification evolution is rapid. Generally, in today’s world of work people’s skills halve in value every five years. Manufacturers should address the implications for the digital skills gap by implementing structured learning and training programs, both in-house and outsourced to academic institutions or technology supplier partners.

Consider rotational roles, too. This helps to disperse skills and foster the spread of digital problem-solving capability throughout the organization.

Ensure that the training is practical – and practiced. Keep it relevant. Manufacturing work will continue to evolve, but the fast-changing workplace still requires hour-by-hour, day-to-day routines which deliver KPIs.

  1. Culture: the cure or the cause? Digital maturity is a function not only of the systems, processes and technology adoption within the enterprise, but also of the engagement and attitude of employees. Continuous improvement should be woven into the fibre of the company – and an innate aspect of a high-performance, integrative improvement culture is a growth mindset, including continuous learning. Fundamentally, employees must embrace technology rather than feel threatened by its encroachment into their environment and their tasks.

Culture – broadly, the way things get done – is the dial for the company’s energy, setting the tone for how employees engage with problems or seize opportunities. How workers adopt and leverage new technology hinges on their acceptance of it and their willingness to learn new skills to leverage digital for productivity gains and competitiveness. It may be the most important digital skills initiative.

It’s clear that manufacturing is facing a severe current crisis of digital skills, and this is retarding its potential and prospects.

Smart factories need smart people. Now is the time to prioritize skills, to close the gap.


Contact CCi  to find out how to instil a continuous learning culture in your organization. CCi is a privately held global company that enables organizations to deliver sustainable results across the supply chain through TRACC, a continuous improvement solution.