Your editorial (First Up, June 2010) and the article (p.38) on business incubators and startup businesses highlight that job creation is one our nation's most pressing problems. The jobs that America needs most are in the manufacturing sector -- not only to provide stable, well-paying jobs for its citizens but also to maintain and defend its strength and freedom in an increasingly competitive world. This very topic is a matter of serious thought and discussion in a recent white paper by the Manufacturing Division of the National Defense Industrial Association. One of the points discussed in this white paper is maintaining a skilled manufacturing workforce. As a nation, we are rapidly losing many of the skills that are vital to our nation's survival such as ship building and military communications systems design. The first is in danger of being lost because of the huge cost of new naval vessels and the second because of more and more reliance on COTS (commercial off-the-shelf) devices as a method of reducing costs. Based on my observations over more than 40 years of industrial employment, we have probably lost an entire generation of U.S. manufacturing expertise.
While incubators and startups are important sources of innovation, they usually tend to employ only small numbers of people, many of whom hold one or more college degrees. The statistics in the article support this conclusion since the average number of full-time employees per startup company is less than four and only about 3% of incubators are focused on manufacturing. Incubators and startups are glamorous to politicians, but they will provide less than 1% of our nation's need for 13 million new jobs in the next 10 years. These jobs can only come from the private sector when there is an expectation of sufficient and sustainable demand for the goods and services to be provided so that the investment required for their creation will yield a reasonable return.
Allan H. Reed