Got Smart? It’s Growing

Posted on March 5th, 2012 by

 Image by Trilliant

The latest government’s job report showed markedly-improved numbers over the past year. The nation’s unemployment rate fell to 8.5 percent, the lowest level in nearly three years. While this is certainly good news, it should be taken in context. After years of mass destruction, the US has been generating jobs at a healthier rate, albeit one that is still too anemic given the huge unemployment resulting from the 2008-2009 global financial crises.

Job growth came in a broad range of industries: professional & business services, health care, manufacturing, leisure & hospitality, wholesale trade, construction, and mining. Average hourly earnings for private-sector workers rose 4 cents to $23.29. Though inflation numbers have not yet been released, real earnings adjusted for inflation likely stayed the same or fell. Stagnant wages are likely to hurt the economic recovery. Stagnant wages make it harder for the middle class to sustain their wages, which will result in the barbell effect, in which jobs and wages are pushed more and more to the lower brackets while the top stays strong. This can result in a job market that is heavy on the bottom and the top, but eroding in the middle.

There has been continued rising income dispersion between the highest earners and those in the middle and bottom levels (further amplified by the Occupy movements that drive a wedge between the 99% vs. the infamous 1%). Studies have shown that labor market institutions (schools, colleges and across the current workforce) have been too slow to respond to ongoing structural changes in the US economy. Globalization has caused the economy to shift from manufacturing to higher-level technology/services, which requires more advanced skills. The growth economy of the future will need highly developed human capital to succeed, yet too few Americans are equipped with the more-advanced skills required to fill jobs in the new growth sectors. The technology sector in general, and smart energy in particular, is one such new growth sector.

Recent studies by the Brookings Institute and GridWise Alliance that show that:

1) The clean economy grew more slowly in aggregate than the national economy between 2003 and 2010, but newer “cleantech” segments produced explosive job gains and the clean economy outperformed the nation during the recession. …”newer clean economy establishments— especially those in young energy-related segments such as wind energy, solar PV, and smart energy—added jobs at a torrid pace, albeit from small bases.”

2) Young establishments in certain segments of the clean economy (Smart Energy, GHG reduction, renewables, etc.) had a substantially-greater job creation impact per establishment than their “non-clean” peers in the national economy. The research indicated that many of these positions have been created in the past few years. An even more interesting point is that this segment is also one of the most educated and attracts some of the greatest number of candidates with higher educational qualifications.

3) Job creation in cleantech may also depend less on simply retraining existing workers, but rather, on hiring newly educated candidates with new skills. In a report just released by the GridWise Alliance, The US Smart Grid Revolution: Smart Grid Workforce Trends 2011, KEMA’s own research and analysis suggested further that these positions would require higher-level and more diverse skills for sustainable industry positions. This emphasizes the criticality of creating new curriculum in higher educational facilities, in order to properly train new generations of vital new skill areas. The younger generation, by virtue of its lifelong familiarity with communications technology and affinity for dynamic and creative work environments, will bring significant positive change to the traditional energy industry and help the deployment and effectiveness of smart energy projects.

Anecdotally, I can also comment from personal experience. Every few months or so, I receive calls from recruiters looking for a candidate for their client companies. The responsibilities range from leading a smart energy practice to global smart energy marketing to helping a company with an IPO roadshow and so on and so forth. The jobs seem plentiful, in particular in the arena where technology and energy intersect. There’re still relatively few people with the skillsets that marry these two fields — technology (IT) and energy (OT). Traditionally, technology (as in Silicon Valley type of technology companies) has seldom intersected with energy. There is also a culture clash between the two fields. The technology industry is filled with fast-moving, risk-taking, and capital-efficient businesses. Technology gets obsolete every few months (think of your computers, mobile phones, etc.). In contrast, the energy industry is traditionally slow-moving, capital-intensive, and regulatory/policy-driven. Smart energy is one area where these two traditionally-separate cultures and skillsets have to intersect. The analogy is somewhat similar to the beginning of the Internet in the late 80s/early 90s. Not too many people possessed the skillsets as the industry was just emerging. 10-20 years later, it is a much more defined space — many new businesses leverage the Internet: ecommerce, social media, and cloud-based apps. Smart Energy has the potential to be just like the Internet. Today, it is still being defined and shaped. A career in smart energy can be both personally and professionally satisfying.

Education and a paradigm shift towards a more higher-skilled workforce are among the most important mediators of the US human capital development. Unless American workers and students can develop new skills in these new growth sectors over the next decade, the nation risks a future of being left behind in the growing global economy. The challenge is enormous, but the country has met such challenges before. In the beginning of the century, the country transitioned from an agriculture-based economy to an industrialized one. Two to three decades ago, the country further transformed into a service-and-technology-based economy. Many tactical measures may be needed to meet these new challenges head on. But the nation’s focus and priority should be to upgrade its human capital with the new skillsets necessary to succeed in the globalized world.

The opinions expressed in this article are solely those of  the author  Sonita Lontoh, head of the Global Corporate Marketing at Trilliant. Sonita is a frequent speaker/contributor on cleantech topics and is an expert profiled on Wikipedia. Connect with Sonita on LinkedIn

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One Person has left comments on this post

» Helipal said: { Mar 6, 2012 - 09:03:49 }

Your kidding, right? Energy job growth between 2008 and 2011 have be supported heavely by US governmet stimulas funds. where do you think these jobs will go when the Goc $$ dry up, and the payoff is too meager for private investors?

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