Futurist Says CT Manufacturing Will Rebound

By Brad Kane

Email: bkane@HartfordBusiness.com

Haddam futurist Ken Gronbach is predicting a rise in American production - including Connecticut manufacturing - thanks to the large population boom of Generation Y.

Manufacturing is poised to make a comeback in Connecticut, not necessarily in a year or two, but in the future.

That's the upbeat view of Connecticut futurist Ken Gronbach, who, after studying America's demographics and examining the state's industrial strengths, concludes that the best days for the United States lie ahead. Gronbach is the principal of KGC Direct LLC, a consulting firm based in Haddam.

Because the United States is the only Western industrialized country with a young labor workforce and other countries - especially China - are slashing their young populations, America's industries will grow as Generation Y comes of age, he said, particularly in sectors where the foundation already has been laid.

In Connecticut, that means the rise of the manufacturing industry. The increase will come particularly in the form of smaller companies providing parts to major manufacturers, Gronbach said, as the members of Generation Y grow frustrated with the job market and set up their own businesses.

"Manufacturing is going to come back because the footprint is already here," Gronbach said.

Other industries Gronbach predicts to rise in Connecticut include aerospace - again, because the expertise and groundwork is already here - and a new retail climate focusing on apparel, entertainment, communication, transportation and food.

Generation Y - the 6- to 24-year-olds - are the largest age segment in the United States, outnumbering the baby boomers by more than 3 million. The population keeps growing, too; 2007 set a record for births in the country.

Compare that with other countries in Europe, which have stagnant population growth, and with China, which is teetering on the brink of collapse because of its one-child policy, Gronbach said. While the young U.S. population is booming, China has cut its fertility by 70 percent over the past 30 years - going from 40 million births per year to 10 million.

"China has obliterated their labor force," Gronbach said. "They've just wiped out all their consumers, not to even mention their labor force."

In any economy, in any country, the heavy lifting always is done by the middle-aged population, who take care of both the young and the old. When the older population starts to outnumber the middle population, problems will arise. The problems will be drastic in China's case because there is no social security system, leaving the old solely reliant on the young.

The United States is in the midst of a population crisis of its own. When Generation X came of age, that generation was 11 percent smaller than the preceding Baby Boomer generation. That meant labor shortages. Jobs were shipped overseas, and immigrants came to the U.S. to fill the gaps, Gronbach explained.

This immigration wave help lead to the population boom in following generations as nearly a quarter of the babies born in the record setting birth year of 2007 were Latino.

The Generation X population crisis will also create a new type of worker out of Generation Y, Gronbach said. Generation X entered an employee's market where there were 10 vacancies for every eight workers, enabling employees to be more passive about their jobs and more demanding in their compensation.

Generation Y is entering the workforce at a time of high unemployment where Baby Boomers are unwilling to retire, leaving Generation X filling up the mid-level and the entry-level, waiting to move up the chain. Facing a shortage of jobs, members of Generation Y will turn into entrepreneurs, hungry to make their impact on the workplace.

This will have an even bigger impact in Connecticut where the disparity between Generation X and the preceding and following generations is even greater than the rest of the nation, Gronbach said. The state will benefit from the large group of motivated Generation Y entrepreneurs, which is significantly more tech-savvy than the previous two generations, creating a boom in production.

"You are going to see everything come back here," Gronbach said.

The United States constitutes 4.5 percent of the world population yet produces and consumes one-fifth of its goods. As the consumers are in America, the world's companies will want their production in America.

"The best days of the United States still lie ahead," Gronbach said.