Can MEMS and NEMS Visibly Impact US Job Growth in the Next Decade?

Between 2007 and 2011 there was a full recovery of the US GDP to $13.5 trillion. In the same period US lost 7 million jobs, and additional 24 million people don’t have full time jobs.

The job creation engine has changed due to the following factors:

  • Technology providing massive increase in efficiencies across industries.
  • Globalizations, bringing over the last 15 years 400 million new workers to the marketplace at wages an order of magnitude lower that in the US.

As a result, US economic growth and employment started and will continue to diverge, bringing US to the employment crisis.

President Obama’s budget targets creation of 20 million jobs over next 10 years. Based on the history (only 1.7 million US jobs were created over the last 10 years, primarily in government and healthcare), it will be a big challenge.

Five best strategies for increasing employment selected by Business Week are:

  • Matching Germany’s model where industrial jobs represent 28% of employment, as opposed to 22% in the US (difference equal to 14 million jobs). This would require upgrading technical education with a focus on complex products which commend premium price. MEMS/NEMS fits nicely into this strategy.
  • Retraining of millions of people in multiple industries where jobs are gone forever. A model could be the GI Bill program after WWII retraining veterans, with private sector identifying what jobs are needed. Again MEMS/NEMS can support this strategy.
  • Supporting growth industries. Initial selection points to increasing export of movies, TV programs and songs, increasing attractiveness of US medical care for foreigners and focusing on tourism as job generator.MEMS/NEMS is a growth industry and should be added to a target list.
  • Fostering small business ecosystem, as between 1980 and 2005 nearly all net job creation occurred in firms less than 5 years old. MEMS/NEMS fits here perfectly.
  • Funding infrastructure programs (fixing airports, bridges, highways, train systems) through a national bank, following model of other countries, to create jobs in near term. Funding MEMS/NEMS infrastructure to attract production should be added to this list.

As shown, MEMS/NEMS can help to create jobs in every targeted area. How big an impact could it make?

Forecasts for MEMS/NEMS market growth are referenced below:

  • Global MEMS components market is $10B in 2011, forecast to grow to $37B in 2021 (14%/y).
  • Market for MEMS based system (using MEMS components) is between 10 and 100 times larger, thus estimated between $370B and $3,700B in 2021.
  • Global nanotechnology market is expected to grow from $17B in 2011 to $50B in 2021.
  • Nanomaterials from $11.5B in 2011 to $45B in 2021
  • Nanodevices from $51.6M in 2011 to $2.3B in 2021
  • Assuming nano-based system market at 10 to 100 times larger, we get a 2021 market estimate $480B to $4,800B.

Nasdaq 100 companies average revenue about $500,000/employee/year. Using this as a yardstick,MEMS/NEMS industry has potential to create globally between 1.7 to 17 million new jobs over next 10 years.

Typically, US market share in multiple industries varies between 30% and 40% of the global market. With government support and focus, perhaps 50% of MEMS/NEMS emerging applications could be captured in the US, representing 850,000 to 8,500,000 jobs.

This projection represents a significant fraction of Obama’s target job creation, and has potential to create more jobs than all jobs in previous decade.

Majority of MEMS/NEMS jobs will be created by system, as opposed to component, companies. This implies a need for a close partnership between system companies and component developers to accelerate path to market.

One of such examples could be iPhone, wherein MEMS sensors (microphone, acceleration and rate) represent only about 5% of selling price. Leading visionary developer (Apple) pulled in sensor developers to deliver required product. Duplication of such success may not be easy.

Bringing necessary Government support to MEMS/NEMS to keep jobs in the US will require major effort and participation of industry visionaries. Can visionaries and Government officials work effectively? Should they try?

MEMS/NEMS industry organizations such as MIG, COMS, Micro/Nano Manufacturing should take an active role is selling this vision to US Government. Will they be willing to do that? It is worth checking…

Can US get there in current economy?

While Business Week vision for job generation seems to be sound and reasonable, US Government didn't yet adopt the outlined strategies. So far (as of 8/4/11), Obama administration unveiled three preliminary strategies:

  • Hiring tax credit (for hiring unemployed).
  • Investment in domestic clean/renewable energies, with a focus on wind power.
  • Rental of foreclosures.

This clearly is a short term vision, which will not create 20 million jobs in coming years.

In parallel, President Obama formed President’s Council of Advisors on Science and Technology (PCAST)). PCAST release on June 24, 2011 a report Ensuring American Leadership in Advanced Manufacturing, providing a strategy and recommendations for revitalizing the Nations’ leadership in advanced manufacturing, including:

  • Creating a fertile environment for innovation through tax and business policy, robust support for basic research and training and education of high-skilled workforce.
  • Investments to overcome market failures.

To achieve these goals PCAST launched Advanced Manufacturing Initiative (AMI).

TRF (Transducer Research Foundation) organized in August 2011 the Workshop in Napa, CA, with objective to create recommendations to AMI related to MEMS and NEMS research and industry in four strategic areas:

  • Transformation of Micro/Nano potential
  • Infrastructure needs
  • Industry-academia partnerships
  • Educational and workforce needs

Marty Schmidt (MIT Provost) will be integrating workshop comments into a report to the President.

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