Manufacturers Need More Speed

Manufacturers Need More Speed

There are about 35,719 census blocks in the state of Indiana that are considered “unserved areas” for broadband internet access, according to the Indiana Office of Community & Rural Affairs (ORCA). These are internet dead zones – a frustrating problem for residents and a financial sinkhole for manufacturing companies.

Let’s put that stat into perspective. An unserved area is defined as a place that “does not have at least one broadband provider offering actual speeds of at least 10 mbs download and 1 mbs upload, or an area where there is not a potential provider through a federal funding program to deploy that minimum level of internet speed.”

There are 267,071 total census blocks in the state, per the Census Bureau’s data. That tells us about 13.3% of our blocks barely have enough speed to stream an HD movie, let alone integrate a manufacturing operation with the latest systems monitoring technology.

Looking at the state’s map of underserved areas, there are noticeable clusters of these underserved blocks. Brown, Bartholomew, Jackson, Lawrence, Washington, Floyd, Spencer, and Parry Counties are all major hotspots, and there are quite a few other clusters distributed throughout other counties.

For a manufacturing-intensive state like Indiana, keeping our companies equipped with the latest and best tools is key to remaining competitive. Internet is just one such tool, and there are many reasons why improving it can be an asset for our state’s manufacturers. Let’s take a look at some of the bigger benefits.

 

Talent

Throughout the U.S., about 2.6 million manufacturing jobs will be unfilled due to the skills gap by 2028, according to data from Deloitte and The Manufacturing Institute. Researchers believe this will lead to a major loss of economic growth, producing a shortage of up to $2.5 trillion in reduced output.

Now, remember, manufacturing’s share of the GDP is disproportionately high in Indiana. The National Association of Manufacturers (NAM) has data showing that manufacturers in Indiana account for 27.84% of the total output in the state and employ 17.24% of the workforce.

So, a major national skills gap is going to be an even bigger problem here. Would you want to live in a place with slow internet? For younger workers at the start of their careers, the answer may very likely be no. Therefore, faster internet is essential for improved quality-of-place and talent attraction efforts – much like good quality schools and other local amenities.

 

Investment

One of the most attractive things about Indiana for manufacturing companies is our logistics infrastructure and the capabilities that it offers. An internet system more evenly distributed throughout our state provides greater options for site location and rural investment, beyond more congested urban areas where land value might be at a premium.

For example, earlier this year global commercial real estate services firm Avison Young reported that over 95% of central Indiana’s new industrial real estate, about 10 million square feet, was immediately absorbed. So, it’s clearly not easy to find industrial property in the parts of the state that have the fastest internet. Communities outside of central Indiana need to increase their speed to strengthen their site marketing.

 

Competition

The final and probably most important reason for Indiana manufacturers to have faster internet is strictly due to competition. Internet-enabled devices are becoming much more prevalent throughout the manufacturing industry, offering greater efficiency, a better understanding of performance, and improved system monitoring and maintenance, among many other things.

This arena has gotten so big, people around the world are referring to it as the world’s fourth industrial revolution, or Industry 4.0. To describe the four succinctly, you could define like this:

  • Steam (1700s)
  • Electricity and Mass Production (1800s)
  • Computing and IT (1900s)
  • And today, Connectivity and IoT

(Source: Encyclopedia Britannica)

Hoosier manufacturing competitors throughout the world are making rapid advancements into Industry 4.0 every day. They’re doing much more with much less, and they’ll be outperforming Indiana before long. Given how important this sector is for our economic output, it’s vital that we give them all the tools to success. In this regard, faster internet is the core infrastructure component that companies will need.

 

More MBS Needed ASAP

The equation in this situation is fairly straightforward; more internet speed equals more manufacturing profitability. It will also enable our state to geographically diversify our manufacturing concentrations and assist with quality-of-place improvements in surrounding areas. There’s a lot to gain, and it’s likely we’ll be seeing more efforts to increase speed and internet investment as time passes.