But is the skills gap really the issue – or is it a gap in another area?

At a lunchtime discussion hosted this week by the Aspen Institute, panelists from several organizations explored answers to that question.

According to research by Deloitte, about 600,000 manufacturing jobs remain unfilled because employers cannot find skilled workers. The jobs most difficult to fill are those with the biggest impact on performance, said Craig Giffi, vice chairman and leader of Deloitte’s U.S. Consumer & Industrial Products practice. “The proverbial bar will continue to be set higher and higher,” he added.

So, yes, “we seem to have a skills gap,” Giffi told the panel’s audience. But other gaps also exist in training, education, perception, gender and policies, he said.

Wages, however, is one area of success in the manufacturing sector. According to Deloitte research, U.S. manufacturing jobs pay on average more than 8 percent higher than other jobs.

Closing gaps in skills, gender, training and other areas – in addition to growing the manufacturing sector – could produce more than 3.8 million jobs in manufacturing and other related industries, according to Giffi’s presentation of Deloitte research.

So what are the solutions to these gaps?

Theresa Maldonado, director of the  National Science Foundation‘s division of Engineering Education and Centers, said partnerships are key.

“We need to look at education more holistically,” she said, adding that training programs should focus on both fundamentals and advanced techniques.

Tim Welsh, senior vice president for University of Phoenix’s Industry Strategy Group, said addressing the gaps requires the commitment of both universities and employers.

“We can best help here if we treat ourselves as a member of an educational supply chain,” he said. On the employer side, he added, “the role is really around engagement with us.”

Ann Randazzo, executive director of the Center for Energy Workforce Development, provided examples of skills training from the utility industry. Some students participate in boot camps, for example, which provide eight weeks of hands-on training and certifications. Creating training programs for former Military members also is important, she noted.

Others across the manufacturing and education sectors have formed partnerships to train highly skilled workers, and even the federal government plans to launch three additional manufacturing institutes to encourage job growth and innovation. But Giffi pointed out during the Aspen Institute forum that the skills gap issue isn’t unique to the United States.

“We actually have a skills gap on a global basis,” he said. “The same conversation is taking place in countries around the world.”

The highlight of the visit was seeing the scale of Ford’s operation, and particularly the scale of its research and development organization. Prasad’s building is a half-mile into Ford’s vast research and engineering campus. It’s an endless grid of wet labs like you’d see at a university: test tubes and robots all over the place; separate labs for adhesives, textiles, vibration dampening; machines for evaluating what’s in reach for different-sized people.

Prasad explained that much of the R&D that goes into a car is conducted at suppliers–Ford might ask its steel supplier to come up with a lighter, stronger alloy, for instance–but Ford is responsible for integrative research: figuring out how to, say, bond its foam insulation onto that new alloy.

In our more fevered moments, we on the software side of things tend to foresee every problem being reduced to a generic software problem, solvable with brute-force computing and standard machinery. In that interpretation, a theoretical Google car operating system–one that would drive the car and provide Web-based services to passengers–could commoditize the mechanical aspects of the automobile. If you’re not driving, you don’t care much about how the car handles; you just want a comfortable seat, functional air conditioning, and Web connectivity for entertainment. A panel in the dashboard becomes the only substantive point of interaction between a car and its owner, and if every car is running Google’s software in that panel, then there’s not much left to distinguish different makes and models.

When’s the last time you heard much of a debate on Dell laptops versus HP? As long it’s running the software you want, and meets minimum criteria for performance and physical quality, there’s not much to distinguish laptop makers for the vast majority of users. The exception, perhaps, is Apple, which consumers do distinguish from other laptop makers for both its high-quality hardware and its unique software.

That’s how I start to think after a few days in Mountain View. A trip to Detroit pushes me in the other direction: the mechanical aspects of cars are enormously complex. Even incremental changes take vast re-engineering efforts. Changing the shape of a door sill to make a car easier to get into means changing a car’s aesthetics, its frame, the sheet metal that gets stamped to make it, the wires and sensors embedded in it, and the assembly process that puts it together. Everything from structural integrity to user experience needs to be carefully checked before a thousand replicates start driving out of Ford’s plants every day.

So, when it comes to value added, where will the balance between software and machines emerge? Software companies and industrial firms might both try to shift the balance by controlling the interfaces between software and machines: if OpenXC can demonstrate that it’s a better way to interact with Ford cars than any other interface, Ford will retain an advantage.

As physical things get networked and instrumented, software can make up a larger proportion of their value. I’m not sure exactly where that balance will arise, but I have a hard time believing in complete commoditization of the machines beneath the software.

See our free research report on the industrial internet for an overview of the ways that software and machines are coming together.

Jon Bruner is editor-at-large at O’Reilly Media. This post is part of O’Reilly Radar, and its industrial Internet series, an ongoing exploration of big machines and big data. The series is produced as part of a collaboration between O’Reilly and GE. 

The report places countries on either a “Watch List” or “Priority Watch List,” the latter reflecting countries with more numerous, egregious, and longer-standing IP infringement issues. Ten nations comprise the Priority Watch List—Algeria, Argentina, Chile, China, India, Indonesia, Pakistan, Russia, Thailand, and Venezuela—while Ukraine is named a “Priority Foreign Country,” the first time in seven years USTR has used this category to identify the most-severe IP infringement.

Among the findings presented, the authors express “serious concerns with widespread piracy and counterfeiting” in at least ten countries—Bulgaria, Canada, Chile, China, Italy, India, Mexico, Romania, Pakistan, and Vietnam. Indeed, rates of software piracy in most of these nations top 65 percent. It also sights inadequate IPR protections and enforcement in China and India, noting “A wide range of U.S. stakeholders in China report serious obstacles to effective protection of IPR in all forms, including patents, copyrights, trademarks, and protection of pharmaceutical test data.” Regarding India, USTR adds “innovators are facing serious challenges in securing and enforcing patents.” The report specifically challenges the India Patent Controller’s recent decision to issue compulsory licenses for innovative biopharmaceuticals—such as Genentech’s breast cancer drug Herceptin and Bayer’s Nexavar—on the grounds that they weren’t being sufficiently worked (i.e., manufactured) in India.

The inability of these trade partners to protect IP rights is particularly damaging to the U.S. economy, because we increasingly depend on the production of knowledge- and IP-intensive products and services. For example, in 2010, IP-intensive industries accounted for 40 percent of U.S. GDP and 74 percent of U.S. exports. Moreover, IP-intensive industries either directly or indirectly support 40 million U.S. jobs, with those jobs paying 42 percent more than the average U.S. salary. In fact, the U.S. International Trade Commission found that Chinese theft of U.S. IP in the year 2008 alone cost 1 million American jobs and $48 billion in domestic economic activity.

But as bad as IP infringement damages the U.S. economy, it likewise can hurt the countries that practice it by limiting long-term economic growth. Countries with inadequate IP protections and enforcement mechanisms only stifle incentives for innovators to embark on home-grown technology development, while enterprises in these countries are forced to invest an undue amount of resources in protecting their ideas rather than investing in innovation. Most fundamentally, weak IPRs discourage trade and investment, which hurts a country’s own businesses and consumers by limiting choice and access to best-of-breed technologies. The effect of India’s decision to issue compulsory licenses for innovative biopharmaceuticals, for example, will only discourage biopharmaceutical companies from introducing their latest life-improving drugs in India.

In contrast, the evidence is strong that when countries—developed and developing alike—improve their IP protections, it leads to increased rates of inbound foreign direct investment (FDI), domestic investment in research and development (R&D) and thus innovation, and exports. For example, a seminal study by the OECD found that a 1 percent increase in copyright protection in developing countries leads to a 6.8 percent increase in inbound FDI and a 3.3 percent increase in domestic R&D. Likewise, a 1 percent increase in patent protection leads to a 2.8 percent increase in FDI and a 0.7 percent increase in R&D. Put simply, it’s impossible to have innovation without the protection of ideas. Thus, the most important reason U.S. policymakers should push all countries, especially developing nations, to enact stronger IP rights is not because it’s in America’s interest (though it is), but because it’s in the best longer-term interest of those countries. But like the politics increasingly in this country that put short-term interests ahead of long-term ones, these countries choose short-term benefits (cheaper products and services through IP theft) over long-term growth and innovation.

This spring, the U.S. Department of Energy (DOE) is launching a new Clean Energy Manufacturing Initiative that will support both clean energy and manufacturing competitiveness by promoting greater energy efficiency in the U.S. production sector. Rolled out at Oak Ridge National Laboratory (ORNL) in Tennessee last month, the new initiative advances a smart take on both the nation’s energy and manufacturing strategies. But more than that it reflects a welcome new spatial and geographic emphasis at the Energy Department.

While it’s too early to judge the impact of the Energy Department’s Clean Energy Manufacturing Initiative, the new push looks promising. By focusing more of DOE’s efforts on regions, a historically isolated, sometimes obtuse agency may be beginning to align itself with some of the most dynamic technology development exchanges of all—those that happen locally.

Scott Andes is a Senior Policy Analyst at Brookings’ Metropolitan Policy Program and Mark Muro a Senior Fellow and Policy Director there. This post first appeared on their blog The Avenue. 

Levi, who recently penned a post for Ideas Lab on energy independence, says the country’s energy scene is evolving in ways that have been counter to predictions and expectations.

“Five years ago, we were talking about the consequences of becoming dependent on imported natural gas. Now we’re talking about whether we should export natural gas. Oil consumption, which seemed like it would go up forever, has fallen steadily over the last seven years. And renewable energy production has doubled at the same time, in part because of government support but in part because of some pretty radical declines in cost that people didn’t anticipate,” Levi said.

“At the same time that you’ve had these changes in the energy world you also have had big changes in how energy effects the broader world around us. A lot of what we think we know about energy we figured out in the 1970s, in the aftermath of the first energy crisis, the first Earth Day. We focused on how energy affected the economy, security and the environment, but the way those relationships work has changed since then.”

Energy independence is more elusive today, Levi argues, even if the U.S. is able to produce all the all it currently consumes. And climate change, he says, should be central to any discussion about the future of energy here.

“Smart rules” from Washington are necessary, Levi says, to help the U.S. capture opportunities, keep bad actors in line, and help use natural gas to replace coal in the power system to drive down emissions. “We need support from government for further innovation and clean energy and steps that help private companies in the market take into account the damages to the climate that are created by overconsumption of fossil fuels and the harm to national security that comes when we use too much oil, Levi said.

A revolution in shale gas, Orszag says, has multiplier effects on the greater economy, not only counting the increase in new production – a stimulus in other energy sectors, but also lower energy prices allows for greater disposable income for consumers. “So you can imagine, you can think of that almost as if it’s a — basically $100 billion a year tax cut,” Orszag said.

However Orszag also called on the institution of a carbon tax to help deal with the threat of significant climate change, “in order to generate the responses from private firms and from households that would be desirable.”

The full transcript of the call is available at the CFR, along with other articles in its Renewing America project.

Jim Bray, chief scientist at GE, and his colleague Kathleen O’Brien allowed anyone to ask them those questions and any others last week during a Q&A on Reddit’s popular “IAmA” forum. The online platform features people who state their profession or other unique characteristics and allows users to ask them any question. President Obama once hosted an “IAmA” forum, for example.

Jim Bray, chief scientist for GE

Bray opened the live forum with an introduction and said he and O’Brien were happy to answer any questions about smart phones, electric cars, cloud computing, smart grid technologies or anything else. Dozens of questions, including the following, were asked by people curious about such energy and technology subjects. And, yes, someone even asked the scientists if a flying car was coming soon. If you missed your chance to ask a question about science, Bray encourages comments and questions at his blog, Stump the Scientist, and he also is on Twitter at @stumpscientist.

From Reddit:

Q: What does GE think the source of electric power will be 20, 50 years out? Will solar or wind ever surpass fossil fuels? Is nuclear still in the equation at all? I see lots of smaller localized gas turbine generator stations – is the future truly distributed?

GE: Let us put it this way: we know there is a finite amount of fossil fuels. We know that amount will eventually run out; it’s just not clear when, but there’ll be quite a bit left even at the 50-year mark. But we must be prepared to replace those sources with renewable energy. Hard to say what form that would take, though.

One possible source: there are international efforts in place to harness fusion. This is a very difficult problem, but we think will eventually be solved. After all, the sun (a ball of fusion) works pretty well. And humans have a good track record of harnessing things that we know work.

Q: I’d like to see wireless charging more in the future. There are some products on the market for some smart phones and game controllers, but there hasn’t been wide spread adoption of the technology. Do you think we’ll get to see a house that is completely wirelessly powered in the next decade or two? (Are we even close to that?)

GE: It’s not going to happen for a house as a whole, but you will see it (and see it now) for small appliances within it. Houses simply require too much power and are too far away from the source of power it would need.

Q: Is GE working with any small farms on solar solutions?

GE: We don’t currently work directly with any small farms, but we do have a variety of technologies that can be used to generate power from wind, sun, and biofuels (including manure, grass, sugar cane, and corn, among other things). Interestingly, when we think of ‘farms’, we think of large installations of wind turbines or solar panels that can be used to power entire communities in some cases. For example, a single 1.5 MW turbine, which is about several hundred feet tall with blades larger than an American football field, can power about 1,000 homes.

Q: What is one of the most promising projects that you are involved in right now?

GE: We’re working on ways to get wind power from remote, windy areas to high-population centers (like LA). Except for Chicago, it’s hard to find places with high wind and lots of people.

Q: Flying car, is when?

GE: We had the choice between making flying cars or giant wind turbines. Seemed like doing both would be a bad idea.

Seriously, though: the qualities of a great car don’t necessarily make for a great plane, and vice versa. Two major challenges: adding flying capability will make the car way too expensive. And the FAA gets control over your car. As a pilot myself, you don’t want that (nor does the FAA). Airspace is already super-congested; imagine what the air-traffic maps would look like.

What they found was that while natural gas resources are abundant here and ready to be tapped, the industry and its regulators have yet to learn “how to optimize the value of the resource”.

Also uncontested in their findings: that together with a lower demand on electricity and greater use of natural gas in industry, greenhouse gas emissions have gone down; and the billions of dollars of investment has led to greater economic opportunities, job growth and aiding the economic recovery.

Writing previously for Ideas Lab, report authors David Pumphrey and Sarah Ladislaw noted that in spite being relatively new on the energy scene, shale gas has already had a significant impact on certain parts of the unconventional gas resources sector and the economy.

“The availability of more affordable, lower-carbon, abundant energy matters because of the opportunity it brings for potential economic, security, and environmental benefits. As a society, we are beginning to experience and understand the wide-spread influence brought about by this development,” they wrote. “However, there remain significant uncertainties regarding the full range of future impacts. While it is clear that natural gas could have a substantial impact, how we think through the next steps is more important than ever.”

Those next steps include greater public awareness, knowledge and acceptance of natural gas development and “proper community engagement at all levels, early and often, and throughout the value chain of gas development”.

So far, existing regulation has enabled existing infrastructure, which has been successfully implemented in the market, the report finds. But more infrastructure development must come, and some of it will be in high population density areas, which will need greater research and a demonstration that risk is being managed responsibly.

Those risks regarding development “are manageable today” the latest report finds, “but understanding risks and evolving cost-effective risk management approaches is a long-term, continuous process.”

Two papers, released in April by The Hamilton Project at Brookings and Results for America, examine the role of evidence and results in such policymaking. During a forum to release the papers, several lawmakers and policy experts discussed the importance of harnessing evidence to improve federally funded programs. Jeffrey B. Liebman, an author of one of the papers who also is a professor at Harvard University’s John F. Kennedy School of Government, discussed a new proposal on reforming government funding practices to reward innovation and evidence.

Workforce Training Potential

In one paper, Using Evidence to Improve Workforce Training Choices, authors Louis Jacobson and Robert LaLonde propose a federal competition that incentivizes states to assemble data on workforce training programs and disseminate information in a way that improves outcomes of American workers.

According to an abstract of the paper, the plan will increase the return on training investments by developing the data and measures necessary to provide information for trainees and by creating incentives for states to implement permanent information systems once they prove cost-effective. The plan also suggests presenting data in user-friendly “report cards” and providing help for prospective trainees to use the information effectively.

“With the earnings divide between skilled and unskilled workers at a historic high, iti s imperative that we raise overall workforce skills in order to enhance America’s competitiveness and ensure economic growth for all Americans,” the abstract states.

Evidence-Based Policymaking

Liebman’s paper outlines five steps for policymakers to take to better inform their work and provides a framework for thinking about which strategy is the best fit for achieving a given policy objective.

“The current fiscal environment makes it imperative that we produce more value with each dollar that government spends,” the paper’s abstract states. “Doing so will require better use of evidence in policymaking.”

Proposals include giving agencies the authority to reserve a percentage of program spending to fund program evaluations and expanding the use of tiered evidence standards in grant competitions.

Liebman also recommends an initiative called the Ten-Year Challenge, which would tackle 10 social problems using data-driven, outcome-focused initiatives in 100 communities. Another initiative, a federal Pay for Success program, would help state and local governments establish projects in fields like early-childhood education, where state and local activity has the potential to achieve federal policy objectives or produce budget savings at the federal level, the abstract states.