The Key to North American Dominance in a Global Economy
North America’s global competitive advantage depends in large measure on maintaining a strong base of workforce talent. But North American manufacturing and supply chains are concerned about growing labor market shortfalls, particularly in advanced manufacturing and logistics.
Labor productivity has grown slowly over the past decade, which is why middle-class incomes in the United States, Canada and Mexico have also been growing slowly. For the good of our communities and ability to compete in the global marketplace, we need to do better.
One problem that is common to all three countries, and that increases the cost of manufacturing in North America, is the lack of a widely accepted, third-party entry-level certification of basic skills. Without it, companies have to provide their own training, and young workers can't benefit immediately when new job opportunities arise.
By supporting new workers to launch their technical careers with a strong foundation of skills, we can build a talent pipeline in all three countries. We can enable companies to reduce the cost of recruitment and retention while increasing the availability of skilled workers. And, most important, we can empower young workers to take advantage of new opportunities where their third-party certificates will be more valuable than a company-issued one.
Our approach is to “up-skill” and grow our next generation of frontline manufacturing and logistics workers throughout North America by promoting mutual recognition of training, evaluation and certification approaches among North American certifying bodies.
Where appropriate, certifying bodies can and should agree on standards that are considered equivalent to their own and work with local educational institutions to turn those standards into training courses. A worker who successfully completes the course receives a certificate that all of the employers in the local job market recognize and value.
Expanding training and credentials in communities across North America must be undertaken at the local level by academic institutions, employers and job centers developing curricula together to address local economic needs. Leaders in all three countries can support this work by helping organizations build a common foundation of competencies designed to support career growth and flexible worker deployment.
This is not a theoretical proposal. It is a reality today thanks to North American Strategy for Competitiveness’s (NASCO’s) North American Workforce Initiative, of which the George W. Bush Institute is a member. We have worked together to achieve official recognition in Mexico of standards developed by the U.S. Manufacturing Skill Standards Council (MSSC).
At the same time, we are working to identify and engage technical institutes or community colleges in Mexico that can provide training and certification using the MSSC standards. We have found significant interest among businesses and the local Colegio Nacional de Educación Profesional Técnica (CONALEP) in the State of Nuevo Leon and expect to launch a pilot project with this local technical college in coming months. In Canada, the Manufacturing Skills Centre within the Canadian Manufacturers & Exporters, which develops standards, offers training and conducts competency assessments for leading companies in Canada, has begun using an adapted version of MSSC’s standards as well.
So why should Americans care about how Mexico and Canada train their young people? Aren’t we just giving them skills they will use to compete against our workers?
We think not, and here’s why: The United States, Canada and Mexico don’t really compete for jobs because we make things together for sale on a global marketplace. The skill levels in the respective countries complement each other, such that each country can look to the other for specific talents and skills at different wage levels. As paradoxical as it might sound, ensuring that Mexico and Canada can produce their parts of the value chain as cost efficiently as possible actually secures American jobs.
This approach to global competitiveness through regionally-integrated supply chains has secured prosperity and growth in the United States for over twenty years. Our major competitors in Germany, Japan, increasingly South Korea and even China all use the same approach to compete with our products around the world. If we strengthen our skill base and continuously work to innovate and manage costs, we can continue to win into the future, and a coordinated strategy to build our skills is a key to success.
Matthew Rooney is the Director of Economic Growth at the George W. Bush Institute and Tiffany Melvin is the President of North American Strategy for Competitiveness (NASCO).