Published 1/18/2010

Value First, Then Jobs

Investments that magnify our ability to create value will ultimately lead to more real jobs.

Workforce Development

Mark Albert

Editor Emeritus, Modern Machine Shop

Steve Cotton and Russ Scoffield are entrepreneurs. Steve’s shop, Micro Precision Parts Manufacturing (MPPM), provides the background for a discussion of CAM programming capabilities in the article,It Takes Firm Resolution To Master The Micro. Russ’s shop, Big Sky EDM, provides the background for a discussion of key factors in the successful application of automation. This article is The Automation Inspiration.

That these shops happen to represent the entrepreneurial impulse at work was incidental to our main purpose of presenting some valuable insights into the technology involved. That both articles appear in the same issue is also entirely coincidental. However, the entrepreneurial element in these stories is significant.

Some observations about MPPM and Big Sky EDM are particularly relevant in the context of the current economic situation in which we find ourselves. In some telling ways, these two shops are microcosms that allow us to observe important principles about economic forces at work.

For example, neither Steve nor Russ started their companies to create jobs (other than their own, of course). They started their companies to make superior parts. Both entrepreneurs saw an opportunity to achieve a competitive advantage in the marketplace by making these parts in innovative ways. They initially invested in technology that leveraged that advantage. Maintaining this advantage is what drives new investments, whether in up-to-date equipment or more staff.

Both shops are motivated by the anticipated return on these investments. At MPPM, Steve is in the best position to make decisions about these investments. The situation is the same at Big Sky EDM—nobody knows better than Russ what equipment to buy.

So how important is it for these two shops to create jobs? I don’t think it’s important. If and when Steve or Russ decide that hiring more helpers is the best value, they will do so. What is crucial for both entrepreneurs is to protect and promote their ability to create value for their customers. In Steve’s case, this value translates into his customer’s enhanced ability to treat medical patients. Lives may be saved. In Russ’s case, the cascading benefits of the value he creates for his customers is less evident but potentially as dramatic. His PCD segments may be incorporated in some novel cutting tool design that enables a manufacturer to produce a highly efficient, low-emissions automobile engine that helps slow climate change.

At the moment, the high unemployment rate focuses attention on job creation. It would be better to focus more attention on creating value in manufacturing. Investments in technology that magnifies our ability to create value will ultimately lead to more jobs that are worth creating and keeping. Government policy would also serve us well if it did more to promote a business climate that encouraged investment in this kind of technology. Good jobs—real jobs—would follow, and the best of these will be the ones entrepreneurs create for themselves.