By Michael Jeanfreau, Senior Economist

Advanced Manufacturing: In the intricate tapestry of modern economies, manufacturing stands as a fundamental thread that weaves together innovation, production and prosperity. At its core, manufacturing is more than just a process of crafting goods — it's a bedrock industry that underpins the creation of tangible products, propelling economies forward and fostering a symbiotic relationship with various sectors. By transforming raw materials into finished goods, manufacturing fuels consumption, supports other industries and plays an indispensable role in bolstering regional economic growth and job creation. In Utah, manufacturing provides more than 150,000 jobs and pays more than $10 billion in wages annually.

The economic implications of manufacturing extend far beyond the factory floor. A thriving manufacturing sector contributes not only to the abundance of consumer goods but also to the creation of well-paying jobs and the stimulation of related industries. As manufacturing plants hum with activity, the demand for skilled labor grows, providing employment opportunities for individuals with a diverse array of talents and expertise. This intricate interplay generates a positive feedback loop, as job creation boosts local spending, supports community development and ultimately leads to sustained economic expansion.

While traditional manufacturing has long been the cornerstone of economies, advanced manufacturing has emerged as a dynamic evolution, driven by technological leaps that redefine how products are conceived, created and delivered. In contrast to its conventional counterpart, advanced manufacturing leverages cutting-edge technologies such as robotics, 3D printing, artificial intelligence and the Internet of Things (IoT). These transformative tools enable unprecedented precision, customization and efficiency, revolutionizing industries across the board. In Utah, advanced manufacturing represents just under 50% of all manufacturing and accounts for $5.9 billion in wages, almost 57% of all wages paid in manufacturing. To define and analyze Utah's advanced manufacturing landscape,  North American Industry Classification System (NAICS) codes offer a means to categorize industries for detailed analysis.

Understanding NAICS and Specific Advanced Manufacturing Industries: The NAICS is a standardized classification system used to categorize and analyze industries across North America. By using a hierarchical structure of numerical codes, NAICS assigns a unique identifier to each industry, enabling accurate comparisons and analysis of economic activities. This system facilitates the grouping of similar businesses and activities, making it easier to track industry trends, measure economic growth, and understand the landscape of various sectors.

Within the comprehensive framework of NAICS, advanced manufacturing encompasses a diverse array of industries that have embraced cutting-edge technologies and processes to revolutionize traditional manufacturing methods. Some of the key advanced manufacturing industries, as defined by their corresponding NAICS codes, include:

1. Aerospace Product and Parts Manufacturing (NAICS 3364): This industry involves the design, development and production of aircraft, spacecraft and related components. Examples include commercial airplanes, military aircraft, satellites and propulsion systems. Advanced manufacturing techniques have led to the development of lightweight and durable composite materials used in aircraft construction, resulting in increased fuel efficiency. 
2. Computer and Electronic Product Manufacturing (NAICS 334): This sector encompasses the production of electronic goods, including computers, semiconductors, communication equipment and consumer electronics like smartphones and tablets. In the computer and electronic product manufacturing sector, the production of microchips using nanoscale processes has revolutionized computing and communication technologies.
3. Medical Equipment and Supplies Manufacturing (NAICS 3391): Within this industry, manufacturers produce a wide range of medical devices and instruments, such as diagnostic equipment, surgical instruments and medical imaging devices. 3D printing is enabling the creation of customized prosthetics and medical implants with improved functionality.
4. Electrical Equipment, Appliance, and Component Manufacturing (NAICS 335): This sector involves the production of electrical equipment like transformers, motors, generators and various appliances used in homes and industries.
5. Machinery Manufacturing (NAICS 333): Machinery manufacturing includes the production of heavy machinery, industrial equipment and machinery used in construction, agriculture and manufacturing processes. The utilization of robotics and automation has improved precision and efficiency in processes such as CNC machining and assembly line production.

Over 30 industries represent the advanced manufacturing sector in Utah, with employment totaling over 74,000 jobs. Industries included all belong to the manufacturing super sector, or NAICS 31-33. Below is a list of NAICS considered to be advanced manufacturing in Utah, and the average 2022 employment for each industry.

Employment counts serve as a crucial metric for assessing economic vitality, but it's important to recognize that the quality of jobs and the associated payroll wages paid to employees also significantly impact a region's economic landscape. While the creation of 100 new jobs in industries like food and accommodation may contribute to employment growth, the true measure of economic impact lies not only in the quantity but also in the quality of those jobs. The advanced manufacturing sector, characterized by higher wages and skilled positions, holds the potential to exert a more substantial influence on a region's prosperity because of its high-quality profile. The addition of 100 new jobs in advanced manufacturing carries the weight of increased payroll wages, amplifying consumer spending, fueling local business growth and supporting community development. In contrast, the same number of jobs in lower-paid industries may yield less economic traction due to limited disposable income and less social financial support. In total, advanced manufacturing paid $5.9 billion in wages to Utah employees in 2022. That’s 56.9% of all wages paid in manufacturing despite only representing 49.2% of total manufacturing employment. Similarly, on a state level, advanced manufacturing represents only 2.6% of total employment across Utah but pays 3.4% of all wages in the state.

Location Quotients: To delve deeper into Utah's specializations in advanced manufacturing, a mathematical calculation known as a location quotients (LQ) helps to identify the prevalence of advanced manufacturing in an area or region. An area’s advanced manufacturing employment share is compared against the national advanced manufacturing employment share. If the area’s share is larger than the nation’s, then advanced manufacturing is identified as a significant employer and economic support to a local region. (An LQ share of 1.00 is equal to the national average. LQs higher than 1.20 speak to high advanced manufacturing prevalence in a region.)

Utah has a particularly high concentration in medical equipment and supplies, primary metal and nonmetallic mineral productions, and pharmaceuticals. Each of these have an LQ over 2.00, meaning that there are proportionally more than twice as many workers in these industries than the national average. While some industries of interest are below the national average, there is a positive correlation between high levels of employment within advanced manufacturing and the associated industry’s LQ. Notable exceptions include magnetic and optical media, which has only 250 employees, but has an LQ of 1.93. Conversely, motor vehicle parts and semiconductors have 4,000 and 3,000 employees respectively, but both have an LQ of around 0.7, which is lower than the national average.

Looking at the far-reaching implications of advanced manufacturing, a notable disparity emerges in paid wages. When considering the broader manufacturing super sector encompassing all manufacturing activities, the average weekly wage stands at $1,325. While this figure surpasses the state's overall $1,185 average, it falls short when compared to sectors that typically demand higher levels of educational attainment — such as utilities, management, and information-related fields.

However, average wages within advanced manufacturing are higher than those of general manufacturing. Average weekly wages in 2022 for a worker in advanced manufacturing was $1,531, more than $200 dollars above the manufacturing industry average. Weekly pay in advanced manufacturing can reach higher than $2,500, significantly higher than the average for the industry in general. High wages should help draw sufficiently skilled workers into the industry.

Regional Specializations: Employment and wage data for the advanced manufacturing sector are available on a county-by-county basis, providing insights into the distribution of advanced manufacturing across Utah. In the visual below, select a specific industry in the drop-down menu to view employment by county.

Among the state's diverse economic regions, Salt Lake County emerges as a dominant player in advanced manufacturing, reflecting its position as an economic powerhouse. The aerospace industry largely concentrates in Salt Lake and Weber counties, a testament to the region's prominence in cutting-edge aerospace technologies and production. Strikingly, Davis County boasts a substantial workforce of 2,442 employees in primary metal products, a figure almost on par with Salt Lake County's count of 2,527.

It is important to note that when the employment totals of every county are aggregated, the sum reaches 53,791 workers — noticeably less than the state's overall count of 74,219. This discrepancy is attributed to certain disclosure laws that safeguard privacy. In cases where a single employer accounts for most of the employment in a specific industry or where the number of employers is limited, data may be withheld to preserve confidentiality. This explains why essentially no advanced manufacturing workers show up in counties like Box Elder County, where manufacturing represents over 30% of the labor force and single large employers dominate specific NAICS.

Using county employment numbers, location quotients can be created for the region. Specialization is much more apparent as the area analyzed becomes more distinct. While Salt Lake County represents about half of advanced manufacturing jobs, its employment is spread fairly proportionally across industry sectors. In contrast, smaller regions have much more defined specializations than the states. For example, Davis County’s petroleum and coal production has an LQ of 12.06, which means we have 12 times the proportion of workers in the industry in Davis County compared to the nation. The top 10 LQs in Utah’s advanced manufacturing are found below.

Relevance in the Modern Landscape: In today's interconnected and rapidly evolving world, the relevance of advanced manufacturing has never been more pronounced. The acceleration of technological breakthroughs and the convergence of disciplines have ushered in an era where speed, agility and innovation are paramount. Advanced manufacturing's ability to swiftly adapt, produce on-demand and optimize processes in real-time, positions it as a strategic response to the vulnerabilities exposed by supply chain disruptions and the uncertainties posed by global events. The onset of the COVID-19 pandemic in 2020 and geopolitical instability caused by Russia’s invasion of Ukraine in 2022 served as a stark reminder of the vulnerabilities present within global supply chains. Disruptions in transportation, labor availability and access to essential components exposed the hazards associated with relying heavily on distant suppliers. These disruptions reverberated across industries, from healthcare to electronics.

Investing in advanced manufacturing carries a dual benefit: enhancing domestic production capacity while reducing reliance on foreign suppliers. The ability to produce essential goods locally not only strengthens a nation's resilience in times of crisis, but also cultivates economic self-sufficiency. By leveraging advanced manufacturing techniques such as 3D printing, robotics and automation, industries can respond swiftly to changing demands and disruptions. This adaptability enables manufacturers to pivot production to address immediate needs, whether it's producing medical equipment during a healthcare crisis or addressing sudden shifts in consumer preferences. Furthermore, reduced dependency on foreign suppliers diminishes the susceptibility to geopolitical tensions, trade disputes and supply chain bottlenecks, fostering a more stable and secure economic environment.

Utah strives to develop and grow advanced manufacturing in the state through efforts like the Utah Manufacturing Modernization Grant. Stateside efforts mirror several federal efforts to develop advanced manufacturing in the United States. The CHIPS and Science Act as well as the Inflation Reduction Act (IRA) are both targeted to bring specific elements of advanced manufacturing. Microchips have been a sector of particular focus, as global shortages, limited production, and geopolitical instability threaten the US’s ability to access a vital resource in today’s technology driven world. Initiatives like the National Network for Manufacturing Innovation (NNMI) and the Manufacturing USA program have allocated resources to foster collaboration between industry, academia and research institutions. These initiatives not only stimulate innovation but also support the development and implementation of advanced manufacturing techniques, positioning the nation to better navigate economic uncertainties and global challenges. 

Utah’s Advanced Manufacturing Community: Utah's commitment to advancing its manufacturing landscape is evident through a multitude of initiatives that foster innovation and collaboration. The Utah Advanced Materials and Manufacturing Initiative (UAMMI) [https://www.uammi.org/] stands as a testament to the state's dedication. UAMMI, a public-private partnership, brings together academia, industry leaders and government agencies to drive research, development and application of advanced materials and manufacturing processes. This collaborative effort not only accelerates technological breakthroughs, but also provides a platform for knowledge exchange and skill development.

Utah's commitment to advanced manufacturing thrives on the synergy between academia, industry, and government. The Utah Manufacturing Extension Partnership (MEP) [https://utah-mep.org/], part of the National Institute of Standards and Technology (NIST), collaborates with local manufacturers to enhance their competitiveness through process optimization, workforce development and innovation adoption. Moreover, partnerships between universities and businesses are shaping the landscape. Utah’s higher education and engineering programs collaborate with companies like Boeing and L3Harris Technologies to advance aerospace research and develop innovative manufacturing processes. These collaborative endeavors amplify Utah's influence in the realm of advanced manufacturing, fostering a thriving ecosystem of innovation and economic growth.

Utah's advanced manufacturing landscape is enriched by the notable presence of major players that have strategically positioned themselves within the state. These influential companies are at the forefront of technological advancements in aerospace, defense and other cutting-edge industries. Their substantial contributions to advanced manufacturing underscore Utah's pivotal role in shaping the future of air and space technologies. Moreover, the realm of additive manufacturing thrives within the state's borders, driving innovation through state-of-the-art 3D printing solutions that transcend industry boundaries. A list of top employers within Utah’s advanced manufacturing sector is provided below.

In the intricate interplay of economic dynamics, advanced manufacturing stands as a pivotal force that spurs innovation, shapes industries and propels regional growth. Utah's commitment to growth is evident through its thriving ecosystem of advanced manufacturing industries, which have harnessed cutting-edge technologies to redefine traditional manufacturing methods. As explored through this article, advanced manufacturing not only fuels economic prosperity by creating high-paying jobs, but also enhances domestic production capabilities, reducing reliance on foreign suppliers and bolstering resilience against global uncertainties. By delving into Utah's advanced manufacturing landscape through the lens of NAICS codes and payroll employment data, valuable insights emerge into its unique specialization and its vital contribution to the state's economic fabric. As the global landscape continues to evolve, advanced manufacturing remains a beacon of innovation and opportunity, fortifying Utah's position at the forefront of manufacturing excellence and shaping the trajectory of progress in the modern industrial world.