The study, "The Impact of Information Technology on Metro Manufacturing Productivity," commissioned by the Center for eBusiness & Advanced IT (eBizITPA), was based on federal government statistics in the 272 metropolitan statistical areas (MSA's) across the country for which this data was available. It found that in 2002, the latest year for which information is available, the presence of a large number of highly skilled IT workers was one of four key variables that correlated with higher manufacturing productivity. Other important variables included the amount of capital investment; innovation as measured by new patents; and percentage of overall workforce with bachelor's degrees.
"Because eBizITPA was created specifically to improve IT skills in Pennsylvania, we needed to know the relative value of improved IT proficiency in economic development," noted Susan Breon, president of Erie-based eBizITPA. "This study indicates that the areas in which we have focused since our founding in 2002 should help Erie and the other regions in Pennsylvania improve in this important measurement."
In 2002, a dozen Pennsylvania communities ranked low relative to other U.S. MSA's reviewed, as defined by the value added (VA) for each hour worked by a production worker in manufacturing industries (excluding any other costs/inputs in the process). The national average for VA of each hour worked was $93.38 for all 359 metro areas, $135.18 for the top third of the metro areas and $60.15 for the lowest third. All of Pennsylvania's VA Rankings can be found in the table below:
Rank 2002 VA per Hour Metro Area State(s) 58 $125.84 Philadelphia-Camden-Wilmington PA-NJ-DE-MD 73 $112.72 Allentown-Bethlehem-Easton PA-NJ 130 $95.41 Scranton-Wilkes-Barre PA 152 $91.43 Lancaster PA 186 $82.64 Harrisburg-Carlisle PA 190 $81.97 Pittsburgh PA 197 $80.94 Youngstown-Warren-Boardman OH-PA 222 $74.81 York-Hanover PA 231 $73.79 Reading PA 244 $71.74 Williamsport PA 249 $71.20 Erie PA 254 $70.47 Altoona PA 263 $68.86 State College PA 297 $62.81 Johnstown PA 318 $57.54 Lebanon PA
According to Breon, the results demonstrate that manufacturing productivity is likely to be higher where there are a greater percentage of IT workers in a metro area, particularly high skilled IT workers such as computer and information systems managers, electrical and electronics engineers, computer software engineers and programmers, database administrators, computer hardware engineers, and post secondary computer science instructors.
Breon also noted that studies of productivity, including this one, indicate that productivity growth does not necessarily bring about decreased employment in an industry, even if that productivity is the result of adding technology. In many cases, adding technology results in greater time efficiencies, fewer errors and leaner processes - all factors that can lead to lower labor costs and therefore increased competitiveness.
eBizITPA has provided funding for internships and apprenticeships in information technology, computer science and engineering, business intelligence and related e-commerce. The apprenticeship program has given 55 new graduates opportunities to work in Pennsylvania companies. Fifty apprentices have completed the program and 41 of them have landed permanent positions in these fields. eBizITPA has also sponsored 50 internships over the past five years.
"In addition eBizITPA has provided more than $700,000 in competitive grants that encourage small businesses to implement IT investment projects that have stimulated more than $8 million in direct regional IT investment. Nearly 300 companies and organizations have participated," noted Breon.
As a follow-up to this study - which assesses the relative value of IT to economic development competitiveness - eBizITPA has commissioned an additional study that measures the direct impact of eBizITPA's efforts to date in the commonwealth. The results of that study are expected to be available later this month.
"Much of our work has been in response to feedback from the IT community and our small business customers as well as our economic development partners. Dr. Kurre's study is an additional confirmation that the direct investments in people and information technology development that we have stimulated over the past five years are contributing to the survival and/or growth of regional companies through greater productivity," said Breon.
The full study is available on eBizITPA's Web site at http://www.ebizitpa.org/ and on the Economic Research Institute of Erie's Web site at http://www.eriedata.org/.
