Wind Power is Much Better than Solar for Manufacturing Jobs

Solar manufacturing is incredibly capital-intensive. For new solar fabs, like the Amonix plant near Las Vegas, and the Solexant plant near Portland, capital outlays are coming out to just over $500,000 per job created. Solexant, for example, will create about 200 jobs on a $107 million capital investment. Contrast that to the new Vestas wind turbine plant in Brighton, Colorado (a few miles northwest of Denver Int'l Airport), where 850 permanent jobs will be created with just $100 million of capital investment, or about $120,000 of capital outlay per job. So for less capital investment, the wind turbine plant is creating over four times as many new jobs as the solar fabs.

Unlike solar manufacturing, which requires heavily filtrated clean rooms and expensive printing and cutting equipment, much like a semiconductor fab, wind turbine manufacturing requires a lot of people. And if you're the sort who spends more time thinking about microeconomics than microbikinis, you'd say wind turbine manufacturing is labor-intensive.

The diameter of the largest turbine rotors has surpassed 400 feet, so the economics of production are very old-school, dependent on a lot of people converting raw materials into a large item. This is very different than manufacturing a 4 inch solar cell using machinery from semiconductor plants. Building the wind turbine takes a lot of people, building the solar cell a lot of capital equipment.

In addition to differences in manufacturing costs, wind turbines are expensive to ship. While Vestas has imported turbines here from its native Denmark, moving 400 foot wind turbines around is no small effort, and makes outsourcing manufacturing to Asia a very costly effort. Meanwhile, two of America's largest solar manufacturers, First Solar and SunPower, are building new facilities in Malaysia and the Philippines.

Now what's even more impressive about the wind turbine plant is how it compares to factories where other centralized, alternating current technologies are built. I posted a few weeks ago about the new steam turbine plant going up in Chattanooga that will cost $300 million to build, and produce all of 325 jobs. The Brighton wind turbine factory will produce about seven times as many jobs per capital dollar invested as the Chattanooga steam turbine plant.

While most economic development professionals, as well as politicians, are eager to pounce on anything that remotely looks like a "green job", it's becoming very clear that some green jobs are far more sustainable than others. While wind farms produce very few jobs, and are models of efficiency and productivity, a wind turbine plant is hard to outsource, and creates far more jobs per capital dollar invested than just about any electricity generation technology.

Looks Like Green Jobs Didn't Make the List

Was just re-reading the WSJ story about the Dept of Labor's Occupational Handbook, and noticed not a single "green" job made the list of top 10 growth professions. I've covered solar and wind manufacturing in my consulting business, and this doesn't surprise me.

Just like IT, greentech is subject to tremendous productivity gains and outsourcing, which stunt employment growth. And in terms of green electricity generation, over 90% of the jobs are in building the power plants, not running them.

A few months ago, I served as a business plan judge for green startups here in the DC area, and many of the ideas were centered on building small businesses, including one I gave high marks - an energy efficient gym. But very few of these ideas are the sorts of companies that will ever grow large enough to justify a major venture investment.

The hardest part of my work in solar and wind has been trying to help MBAs and college grads who want to work for manufacturers, because there are so few finance and marketing jobs at these places. Even the rapidly growing, successful ones don't hire like software/media/IT hardware startups. First Solar, for example, grew from just $100 million in sales in 2006, to over $2 billion last year. But 80% of its labor force works in the factory. It has just 800 people working in finance, engineering, management, administration, and marketing, which works out to just one office worker for every $2.5 million in revenue. Cisco, on the other hand, has about one office worker for every $500,000 in revenue.

Greentech is a growth industry, but not much of a jobs producer. The small environmental businesses offer more promise for regions looking to grow employment in this area.

San Mateo County Expects to Hit 2007 Job Levels in 2015

San Mateo, the northern (and largely software) half of Silicon Valley, expects to get back to its 2007 job count by 2015. The county economic development agency, which decided to buy a vowel when it chose the acronym of SAMCEDA (San Mateo County Econ Dev Association), sees a slow recovery over the next few years.

So in this county, which is home to Oracle and Genentech, is a stone's throw from Google, Yahoo, and Intel HQ, and receives 10-12% of all venture capital invested domestically, what do you expect are the growth industries? Well, according to SAMCEDA, it's professional and technical services, retail trade, government, hospitality, health care, social assistance and manufacturing. Basically, the leading growth professions in the county that sits between San Francisco and San Jose are the same as everywhere else.

I've said that for just about every region outside of Silicon Valley, Boston, and maybe Austin/Seattle, that VC is no longer part of any sensible economic development strategy. And if you're Cleveland, or KC, or Lansing, and you wonder whether this applies to you, just look at VC's increasingly niche role in the middle of the San Francisco peninsula.

Obama Allocating $100 million of NASA Budget to Economic Development

I used to cover the satellite industry, and can assure you if there's one industry that's not going to be a jobs powerhouse the next 10 years, it's space. And in response to the coming end of the Space Shuttle program, President Obama is allocating $100 million of the FY2011 NASA budget to help Florida, Alabama, and Texas workers associated with the 80s-era initiative find new jobs.

NASA is often the repository of odd Presidential aspirations, George W. Bush wanted to put a man on Mars, and not to be outdone by bizarre ideas, Obama wants to send a man to an Asteroid.

While I don't think it's likely we'll get a man on an Asteroid anytime soon, we can shoot Asteroids like we did in the 80s (Atari version) at this online gaming site.

Skin Care Specialist Now a Top 10 Growth Profession

Mundane personal service jobs are becoming some of the fastest growing professions. In the past, I've written about some of the "cool" and "creative" jobs defining the future, such as nail care, social work, and teaching. Employment in these sectors correlates more strongly to having a vagina than to having an advanced degree, but they are way too boring for any urban pundit to start writing about.

While I don't think its author is going to get a promotional poster at Barnes & Noble, the Department of Labor's Occupational Outlook Handbook has some interesting findings. It ranks the top 10 growth professions for the next 8 years, and coming in at #8 - skin care specialist. Yes, for all the hype about "creative classes", "knowledge workers", and other sorts of nonsense, skin care is now a leading growth profession.

In addition to skin care, athletic trainer makes the list, as does home health care aide. Even the engineering jobs are mostly angled towards people and medicine, as opposed to faster computers or communications. Only 2 of the top 10 professions have anything to do with finance or IT. Makes me wonder if Jennifer Granholm will invite a skin care professional to speak at the next Michigan "creating cool" conference.

Green Energy Power Plants - Jobs are in Construction, not Production

Under tremendous pressure to reduce costs to get to parity with grid electricity, green manufacturing and production are being done highly efficiently, with much of the work going to semi-skilled construction laborers, not change-the-world college graduates. eSolar and Brightsource Energy are building solar thermal power plants in the Desert Southwest, most of which have about an 11:1 construction to operating job ratio. Brightsource's Ivanpah plant, which will have a rated capacity of 392 MW, will produce nearly 1,000 construction jobs, but just 86 permanent jobs. eSolar's smaller 5 MW Sierra SunTower plant created 250 construction jobs, but just 21 permanent jobs.

The Caithness 845 MW wind farm in Oregon will have just 35 permanent workers, and 400 construction jobs, similar to the 11:1 construction-operating ratio seen with solar thermal. One worker per 24 MW is about 1/4th less than a typical coal-fired plant. While it helps make wind power cheaper, it also shows how much of the opportunity with greentech will be in construction, which is not unlike data centers and other emerging technology areas. They are so automated and efficient that once they are up and running, they are better at creating wealth than jobs.

The Vagina Economy

Many economic development incentives are a waste of taxpayer money. They often involve a lot of handouts so one city, county, or state can make the same "leadership in biotech, greentech, whatevertech" claim as 47 other places. And while there are all kinds of clever studies talking about multiplier effects, the fact remains that far more people, even in regions like Boston and the SF Bay Area, work as nurses, teachers, or retail clerks, than as biomedical engineers. And most of the people doing these jobs spend more money on tampons than on jock straps.


Girls Gone Wild
One of the consequences of the rising costs of education and health care is that money is being directed out of the techie-finance economy that existed in the late 90s to professions like teaching, nursing, social work - all of which are needed everywhere, and are done mostly by women.

According to Bureau of Labor Stats and Nat'l Education Association Data, 80% of teachers, 81% of social workers and 94% of nurses are women. Women comprise nearly a third of all doctors, up from 7% in 1970. These professions that involve caring for people continue to grow while banking, computer programming, and other predominantly male professions continue to get squeezed by productivity gains and outsourcing.

3rd Grade Teachers Don't Have to Double their Productivity every Four Years
While states and counties are falling all over themselves to attract new greentech manufacturing plants, greentech manufacturing is heading out of the country to find cheaper labor, while increasing the productivity of the workers remaining in the U.S. Four years ago, First Solar generated about $300,000 in revenue per manufacturing employee, today it produces over $600,000. Hiring is never going to come anywhere close to the increase in product shipments. Yet this hasn't stopped econ development officials from competing against one another for a plant that might employ 200 people if market conditions remain strong, all while the company building it feels a strong pull to head out to a cheap labor market like the Phillipines or Malaysia, where SunPower and First Solar are building new plants.

Teachers, nurses, and social workers don't get outsourced to the Phillipines, nor do they work for companies under intense financial pressure to increase productivity. 30 years ago teachers didn't have 80% fewer kids in the classroom. And even though social workers and nurses can be pressured to handle a lot of cases, they aren't about to get automated out of existence like many manufacturing workers. As a result, their numbers are poised to keep growing, regardless of how technology advances.

By my estimate, at least 30 states think they are in the top 10 for biotech or greentech. But can anyone name a place that's leading innovation in social work practice? nursing? teaching?

The reality is that many jobs of the future will be in fields dominated by women, and they'll provide a lot more stability and growth than a solar manufacturing facility. Moreover, no one has staked the claim as a leader in recruiting these professions, providing plenty of opportunity for one place to be known as the leading region in these personal services professions. Econ dev authorities would also do themselves a favor if they ditched all their traditional stock photos of science workers, and replaced them with MILFs and recent female grads - that would do a lot more to attract men than pictures of lab coat people staring at test tubes.