Recruiting the New Industrial Base
Recruiting the New Industrial Base
American industry requires a new workforce, not just new technology
By Ryan Li and Jai Malik
It is easy to conflate building hard tech in America with automating hard things. After all, nearly every factory today—whether it builds rockets, cuts sheet metal, or makes building materials—relies on automation. Conveyor belts transport materials across the factory floor without the need for humans, robotic appendages can manipulate heavy objects better than the strongest people, and software can check for production mistakes more quickly than the most discerning human eye.
However, the greatest bottleneck to renewing our industrial base is building a more abundant, capable workforce within hard tech itself. For example, as many as 2.1 million manufacturing jobs could go unfilled by 2030, costing the American economy $1 trillion a year. In contrast, the production and sale of industrial robots is as robust as ever, as robot sales increased a record 43% in Q1 2022. Even though automation is an essential part of our industrial future, an immense opportunity lies in recruiting more people to address our industrial needs and lay the groundwork for a bountiful and secure world. Put simply, American industry has a talent shortage—not just a technology shortage.
The Automation Myth
Throughout human history, the invention of machines has freed up time for people to pursue other, more productive endeavors. Scribes were professional text copyists who worked before the advent of the printing press. Besides these responsibilities, they also took care of administrative and secretarial duties for their employers like bookkeeping and record-keeping. After the invention of the printing press, scribes may have ceased their original function of painstakingly copying text by hand, but the extra time allowed them to focus on their other, more creative duties. The scribe trade eventually developed into the white-collar professions that form the backbone of the service economy—law, journalism, public service, and accounting.
Centuries later, the same pattern may apply in hard tech. Despite the assumption that many industrial processes have been “automated” and do not require humans, hard tech companies continue to grow and hire people aggressively in both manufacturing and engineering. Even Tesla, which has one of the most automated car factories in the world, has continued to find value in having humans in the production process. In 2018, Elon Musk described the initial period of Model 3 production as a “production hell” and wished they had more people in the factory to increase efficiency. In one interview, he even detailed how the Tesla factory had a complex network of conveyor belts that simply did not work, which forced the team to reintegrate manual labor into that process.
Thus, while automation is helpful for low complexity tasks, not everything can be automated—even at the production level. Physical tasks that may be straightforward for humans can present challenges for even the most advanced machines. For example, the simple task of tightening and loosening screw fasteners is still extremely difficult for robots. Furthermore, even companies as big as Apple have found that humans outperform robots in fine motor tasks like applying millimeter-accuracy glue to surfaces. As Peter Thiel wrote almost a decade ago, humans and machines are good at fundamentally different things. They are complements, not substitutes.
There is also a growing narrative in many circles that industrial automation will cause millions of workers to permanently lose their jobs. However, real-world evidence suggests that this is not necessarily true. In fact, automation often gives humans more leverage to complete their jobs more efficiently. For example, a study conducted on factory managers in the apparel industry found that increasing automation of certain tasks like cutting fabric actually increased employment as well. Thanks to improved productivity, these apparel factories are able to grow their business many times over—thereby enabling them to hire more people to work with machines and focus on higher-level tasks.
Put more specifically, automation using technology strips unnecessary work out of mechanical processes; but, an often forgotten component of automation is actually the work of humans. Machines can make a particular production process an order of magnitude more efficient, but only humans can question whether that particular process even needs to be done in that way—or at all. Tesla’s factories are so efficient precisely because their process engineers have built their production lines from the ground up, questioning every step of the traditional car manufacturing process. For example, at one point in the Model 3 production scramble, engineers realized that 300 of the welds designed for the underbody were redundant and reprogrammed the welding robots to forego them. This kind of creative thinking is a crucial component of what we often call “automation”—and it can only be done by talented humans.
Finally, the belief that all industrial jobs will be automated away is especially misguided because it discourages young people from entering the manufacturing workforce. Today, one-fourth of our manufacturing base is over 55, and only three in ten parents would consider guiding their children towards manufacturing careers, in large part due to misunderstandings around the cleanliness and safety of manufacturing work. Nevertheless, these jobs are often extremely robust and well-paid. Even though the Great Recession caused millions of Americans to lose their jobs, many manufacturing companies like Snap-on did not lay off a single employee—even with increasing use of robotics. In order to supplant the existing narrative around industrial automation, we need more hard tech companies capable of organizing a new, powerful workforce to replace the retiring one.
Building a New Workforce
The next generation of American industry will require a radically ambitious talent base. It is both geopolitically imperative (as we discussed in our last piece on hard power) and economically imperative to the tune of trillions of dollars that more people enter the hard tech workforce, both upstream at the engineering and design level and downstream on the production floor. As American hard tech companies architect new manufacturing paradigms from first principles and build the physical world we want to see (i.e., abundant energy, rapid transportation, and a powerful industrial base), they will need people to help design and realize them.
However, what should this new workforce look like? We believe there are three primary groups of engineers and builders that hard tech companies will have to recruit. Only with people from these three groups working together can tomorrow’s multi-billion dollar hard tech companies succeed.
1. Hard tech engineers who apply their knowledge to adjacent industries
First, many great hard tech companies have been built by people applying relevant skills and overarching principles in efficient, growing industries to a more sleepy or traditional industry. A historical example of this in practice is that of Ford Motor Company’s moving assembly line. After being inspired by the moving processing lines in the meatpacking houses of Chicago and other conveyor belts he saw in the agriculture industry, Henry Ford and his team had the cross-domain insight to apply meatpacking and agricultural production ideas to car manufacturing, thereby creating the first moving automobile assembly line. As we now know, the assembly line became crucial to reducing the price of cars and making them affordable for all.
This example is, of course, just one of many. More recently, Parallel Systems was co-founded by experienced avionics engineers at SpaceX and borne out of applying hyper-efficient aerospace engineering principles to the legacy rail industry. In the future, hard tech engineers working in some of the most advanced industries today (such as aerospace) will creatively apply modern engineering and manufacturing principles to legacy industries like construction and energy. For instance, a hypothetical propulsion engineer will have a unique perspective on how to build highly efficient motors, engines, and compressors that would be useful in constructing the next generation of power generators. The combinations here are nearly endless—and all potentially fruitful.
2. Software engineers who seek out new experiences in hard tech
While hard tech discourse has naturally centered around hard tech engineering disciplines like mechanical, electrical, and aerospace engineering, equally important is the recruitment of software engineers to help solve hard tech problems. Great software can help save critical time and money in the physical world, by swiftly simulating real-world tests, analyzing data and information to creatively reduce operating expenditures, and much more.
One of the first companies to do this was CACI International. In 1962, two computer scientists from the RAND Corporation co-founded CACI to commercialize the SIMSCRIPT programming language. They took advantage of their unique technical background in the burgeoning field of computer engineering, which none of the primes had, to address the military’s increasing need for organizing and tracking their physical operations. After becoming one of the first companies to develop and sell any type of software, let alone defense-focused software, they were awarded a $17,000 contract to simulate naval inventory operations in 1963. Five years later, revenue exceeded $1 million, and today, CACI’s revenue exceeds $4 billion annually.
While software originally developed alongside defense and hard tech use cases, software engineers have now largely become distanced from these types of problems. The most “prestigious” software jobs are now generally at software-dominated companies like Google and Meta. Today, a staff software engineer used to working on routing optimization problems for Uber may be less inclined to work on control systems for a manufacturing tech company, despite the fact that their experience may very much be highly valued.
However, what generally distinguishes the fastest growing hard tech startups of today from legacy hard tech companies has precisely been their ability to recruit highly talented software engineers to work collaboratively alongside their hard tech engineers. One straightforward way they do this is through more generous compensation packages. Pulling from Glassdoor, the typical SWE salary at Boeing and Lockheed Martin is $90k and $101k, respectively, while the typical SWE salary at SpaceX and Anduril is $120k and $145k—and these numbers do not even include potentially generous equity packages.
Beyond compensation, the best hard tech startups leverage deeply compelling narratives to unify engineers of all stripes towards the same cause. SpaceX’s career page talks about how they are actively developing technologies to “change the course of life on Earth and beyond.” Anduril, in a beautifully designed manifesto, asks readers to help them “reboot the arsenal of democracy,” explicitly emphasizing their software-first approach. Contrastingly, legacy companies like Boeing and Raytheon use trite, unimaginative language: Boeing’s engineers “share a passion to redefine what’s possible,” and Raytheon’s engineers are “advancing aviation” or “developing smarter defense systems.” All great organizations need great stories. If hard tech companies want to attract more top software talent, they must be generous with compensation and captivating with their missions—like software companies already are.
3. Technicians who lay the foundations of scale at hard tech startups
Perhaps the most under-appreciated talent at hard tech startups today are technicians: people that are comfortable with working with their hands, testing in real-time, and ensuring that production lives up to R&D. It almost goes without saying that an efficient production process is only possible if people on the production line can turn ideas into reality at scale. Whether a hard tech company is selling building materials, machined parts, or finished jets, it needs technicians skilled in aircraft maintenance, assembly, field work, and/or factory operations in order to grow.
Since the turn of the 2000s, there has been a gradual decline in the desirability of jobs involving physical labor. Nevertheless, these jobs are incredibly important for the functioning of our industrial society, and great hard tech companies require both excellent engineers and excellent technicians in order to transform prototyping into engines of production. While the manufacturing processes of tomorrow may not look like the processes of today, they will still require the experience of those with existing domain knowledge.
For instance, many of the upstream manufacturers of components that go into finished products employ high-skilled workers with decades of experience. Without attracting these technicians into the new hard tech workforce, hard tech companies will lose generations' worth of knowledge once they retire. In fact, this is precisely what happened with nuclear power plants. As the West experiences a resurgence in nuclear energy interest, there is now a shortage of managers and technicians who have the necessary experience in reactor construction because of decades of nuclear hesitation.
Many hard tech startups spend less time recruiting technicians than software or hard tech engineers, but the hard tech workforce of the future requires the best of all three. The needs of technicians are also different; whereas engineers work in offices, technicians work on production lines. Hard tech companies that provide comfortable working environments and allow technicians to own the processes they are responsible for—rather than barking orders from above—will find the most success at recruiting top talent.
Finally, these technicians often come from the thousands of smaller artisan manufacturing shops across the country where they are surrounded by like-minded teams, so it is essential for hard tech startups to cultivate similar camaraderie between engineers and the technicians they hire. Hadrian, for example, understands this well and is incredibly thoughtful about company culture down to the finest details. Everyone at the company eats lunch together—executives, machinists, technicians, and engineers alike. Culture is built one small interaction at a time, and a culture of mutual respect starts at the communal lunch table before expanding to the factory floor.
What’s Next
The reason that we focus on these three types of talent is that all three are equally necessary for new hard tech companies. Hard tech engineers from cutting-edge industries, software engineers solving difficult software problems, and skilled technicians form the talent pillars to build the future we dream of. Right now, we’re seeing a resurgence of people in the first category developing an interest in starting and joining hard tech companies. However, there is still a lot of work to be done to recruit people in categories two and three.
In the long run, a new hard tech workforce will not only be beneficial for companies looking to grow today; it will form the backbone of American industry for the rest of the 21st century. As software engineers, hard tech engineers, and technicians learn how to work together to tackle difficult industrial problems at the hard tech companies of this generation, they will become better prepared to build even greater companies themselves years down the road.
This is not a hypothetical vision of the future. It is already happening in pockets of hard tech, with engineers from companies like SpaceX, Blue Origin, and Tesla branching off and starting a new generation of hard tech companies (e.g., Varda, Parallel Systems, Plantd Materials). Nevertheless, there must be many more people who tackle this challenge. Trillions of dollars of GDP, millions of jobs, and an abundant future for all are at stake.