Workforce readiness has become a defining factor in regional competitiveness and corporate success. Economic development professionals and corporate executives are facing unprecedented challenges, whether it’s demographic shifts, evolving immigration policies, or the rapid pace of technological innovation, all of which are reshaping the very foundation of the American workforce.
Earlier this year, Guild members Sydney August, Jason Hickey, Rajeev Thakur, and Gregg Wassmansdorf collaborated to present at the Site Selectors Guild Annual Conference in March 2025, discussing these challenges and providing tactics for building a sustainable workforce structure.
The Trends Shaping the American Workforce
The American workforce is experiencing a significant transformation. For nearly two decades, the labor force participation rate has steadily declined, driven by several overlapping factors: Baby Boomers are retiring in large numbers, new generations entering the workforce are smaller, and fertility rates have dropped below the replacement level of 2.1.
The COVID-19 pandemic further accelerated this trend, with a higher death rate among 50-65-year-olds and 1.7 million fewer Americans in the workforce compared to 2020. Notably, 1.5 million people are available to work but remain outside the labor force, and the participation rate for prime-age men has been declining for over 50 years.
Immigration policies are a vital tool for maintaining workforce stability. Industries like agriculture, construction, and healthcare depend heavily on immigrant labor, and restrictive policies can destabilize these sectors, leading to higher employee turnover and increased recruitment costs. Businesses face challenges such as compliance issues, operational disruptions, reputational risks, and economic impacts when access to skilled foreign labor is limited. Counties that heavily rely on immigration and foreign labor are at particular risk, as demonstrated by workforce longevity analysis models. As immigration policy evolves, economic developers and employers must remain adaptable and well-informed.
Technology’s Impact on the Next Generation Workforce
The Fourth Industrial Revolution is reshaping the workforce, especially in manufacturing and production. Disruptive technologies, such as cloud computing, blockchain, advanced analytics, artificial intelligence, robotics, virtual reality, and additive manufacturing, drive productivity and growth. These innovations do not just automate tasks but also create new roles and transform career paths, making manufacturing more sustainable.
Industries heavily reliant on operations, like manufacturing, transportation, and retail, have 1.3 times more automation potential than other sectors. Companies are adopting technology at varying speeds based on their existing infrastructure. Some solutions, like digital work instructions, remote collaboration tools, and augmented reality-supported operator assistance, can be deployed quickly and inexpensively. Others, such as full end-to-end automation, demand substantial capital investment and longer transition times.
Despite reports of tech layoffs, the demand for tech skills remains strong. Since 2022, 600,000 mid-level tech jobs have been lost, but tech unemployment is only 2%. Additionally, there are still 572,000 unfilled cybersecurity roles, even after 470,000 new jobs were created. AI-related job listings have increased significantly, especially in healthcare and retail, underscoring the continuing need for digital talent.
Why Reskilling and Upskilling Are Key to Manufacturing
Manufacturing is at the epicenter of workforce change. With 12.5 million jobs in the U.S., the sector faces both opportunities and challenges. The most in-demand roles include industrial machinery mechanics, welders, and software engineers. Currently, there are 428,000 manufacturing job openings, with projections of 933,000 openings annually through 2032. Most job losses are concentrated in transportation, computer electronics, and semiconductors, mainly due to automation.
Up to 58% of manufacturing activities could be automated with current technology. This creates an urgent need for workforce programs to focus on reskilling, helping staff acquire new skills to take on different or new roles. The reskilling challenge is especially acute in operational occupations like maintenance and warehouse order picking. Meanwhile, upskilling allows workers to improve their current roles with new capabilities. Effective workforce programs must adapt to leverage emerging technologies and innovative learning methods.
Talent Solutions for Economic Developers
As we look ahead to the next decade, most jobs will require a mix of digital, cognitive, social, and emotional skills, along with adaptability and resilience. We will see the following changes as more companies adopt emerging technologies:
- Physical and manual skills involved in repetitive tasks are expected to decline by nearly 30 percent.
- Basic literacy and numeracy skills will decrease by almost 20 percent.
- Tech skills, such as coding, are projected to increase by over 50 percent.
- Complex cognitive skills will grow by 33 percent.
- Advanced social and emotional skills will rise by more than 30 percent.
To build a competitive talent pool, communities should consider investing in childcare facilities to reduce costs and enable more women to join the workforce. Technical schools should offer more robust IT and robotics maintenance programs, alongside entrepreneurship education to encourage business startups in manufacturing. Apprenticeships remain a proven way to connect job seekers eager to learn new skills with employers seeking qualified workers.
Economic development organizations play a crucial role in supporting reskilling and upskilling efforts, utilizing state and federal grants, tax incentives, and funding programs. This approach helps companies transition workers into new roles, alleviates labor shortages, and promotes economic mobility within the local workforce.
Effective workforce development programs exhibit qualities such as being tailored to industry needs, quick implementation with little red tape, recruitment marketing support, pre-employment training, partnerships with companies, collaboration with colleges and high schools, low or no cost, scalability, and broader employment pathways. The capacity to foresee and adapt to these trends is no longer optional — it’s vital for maintaining growth, attracting investment, and developing resilient communities.
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