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Recent key developments in MAKE│NZ
– Sabine is away on holiday, and we could have a nice surprise waiting for her when she gets back. Remember, I’ve promised to take her out for a coffee when our LinkedIn follower number reaches 500. We’re at 480 now. Come on, people …!
– Our next Fireside Chat event will be next Monday, June 16. We are trying a different format for this one, with a focus on ‘crowdsourcing’ information about the actual state of manufacturing in Canterbury and beyond. The idea will be to invite all those present to share where their business is at right now, major current challenges, and the outlook for the next 10 to 12 months. When we did this in the past, participants walked away with a ‘consensus view’ of where manufacturing is at, and where their own business fits into the picture. It will be an interesting evening, and not too late to register for those eligible: dieter@makenz.org
Recent key developments in New Zealand
– In one of the presentations at our conference, the topic of how to deal with older workers during periods of change was touched upon. ‘Older worker’ (employee) here meaning those 65 years of age, or older. The ‘older worker’ topic comes up in conversations with HR manager in manufacturing fairly frequently. Not a problem when those wanting to continue to work are the ones we wish to retain. Otherwise …
A recent Hays survey in Germany asked 500 managers across a range of sectors about their attitude towards employing older workers. The results were interesting. Only two percent of respondents couldn’t see any advantages in doing so. For the rest, relevant experience and know-how, combined with high levels reliability, discipline and the ability to manage crisis situations were seen as the top 5 advantages in retaining older workers. When it comes to disadvantages, almost a quarter (24%) of respondents couldn’t see any. For the rest, a lack of IT skills, a lack of ability to appreciate the need for change both in terms of how work is organised, and how it is executed, as well as high levels of illness and lower levels of stress tolerance were the top five disadvantages mentioned.
We are not aware of any equivalent research having been conducted in New Zealand. However, from our own conversations with manufacturing leaders we see it as likely that their views wouldn’t differ vastly with what is reported above.
What we do know about New Zealand is that is has the second-highest labour force participation rate in the OECD for older workers, eclipsed only be Iceland. With an average of 26%, the rate is highest for Māori (32.2%) and lowest for people of Asian ethnicity (20.5%). As a recent Informetrics study shows, there is a 10% gap between males and females, and a rapid decline beyond the age of 69:
The labour force participation rate for those aged 65 years and older (male and female) has risen from 5.9% in 1994 to 26% in 2024. During that period, New Zealand’s labour force grew by 1.34m, with the growth in older worker participation contributing 12.6% to that total.
When it comes to the reasons for that increase, and New Zealand’s position close to the top of the OECD, there will be a combination of need, want and circumstances.
Need: NZ Superannuation is low by international comparison and doesn’t cover what is required even for a ‘no frills’ lifestyle in most circumstances.
Want: There is a strong work ethic among older New Zealanders, with many expressing a desire to remain active and engaged through paid or voluntary work rather than fully retiring. The social expectation to retire at a certain age is weaker in New Zealand than in many other countries.
Circumstances:
- Formal status: With the exception of some professions, there is no compulsory retirement age in New Zealand, and discrimination in the job market based on age is illegal. That sets us apart from many OECD countries, where strong formal, as well as social and cultural, barriers exist to being employed beyond what is a legally defined or implicitly accepted retirement age
- Increasing life and health expectancy are raising (some) people’s inclination to work beyond the age of 65 without the perception that – for them at least – 65 is a ‘natural age to retire’
- New Zealand’s labour market offers significant flexibility, including widespread availability of part-time work and roles that can accommodate the preferences and capacities of older workers
In addition, global labour markets are getting tighter, as a recent study by McKinsey demonstrates quite compellingly. New Zealand manufacturers know that from their own experience, especially when it comes to more experienced workers with specialised technical skills. Demographic trends will exacerbate the shortage, while at the same time the increasing proportion of those over 65 (‘boomer bulge’) presents an opportunity to tap into a growing resource of older workers.
In doing so, experience shows that adapting employment practices to meet the needs of this resource, especially when it comes to flexible arrangements in terms of volume and timing of work, will be a critical success factor. As are good employment practices throughout. People who have been ‘hanging in there for the last few years’ under – in their perception – poor conditions are rather unlikely to be open to extending their relationship with their employer.
Recent key developments in the World
– Our world is awash with headlines. Many of them are predictions, sometimes quite dire, and not always ending up in reality
This one, however, is for real. In December 2024, China put controls on the export of gallium, germanium and antimony to the United States. These minerals are required for the production of semiconductors, and there are now early indications that the production of semiconductors is being affected.
In April 2025, the Chinese government added a more extensive set of restrictions. It included an additional seven heavy rare earth metals (samarium, gadolinium, terbium, dysprosium, lutetium, scandium, yttrium) and applies to all countries. Of these, samarium, terbium and dysprosium are used in the production of high-performance magnets used in EV motors, for example. The effects of the latter measure, although more recent, is already restricting the production of electric vehicles. This from a statement of CLEPA, the European Association of Automotive Suppliers: “The European automotive supply industry is already experiencing significant disruption due to China’s recent export restrictions on rare earth elements and magnets. These restrictions have led to the shutdown of several production lines and plants across Europe, with further impacts expected in the coming weeks as inventories deplete.” And in India, the world’s third-largest automobile market, the Society of Indian Automobile Manufacturers (SIAM) warned in early April that component inventories could run out by June.
And, last but not least, many of the rare earth minerals are essential for the manufacture of military equipment. More than 400 kg of rare earth minerals are used in the construction of an F-35 fighter plane, for example. No surprise, then, that these export controls are at the heart of the current round of trade talks between China and the US in London. As will be US export controls, directed at China, on advanced semiconductors and the software to design and the machinery and equipment to make them.
At least since the COVID-19 pandemic, we know about the ripple effects of supply chain disruptions. It will be interesting to see how this one will play out, and to what extent New Zealand manufacturers will be impacted. If you are and are willing to share: dieter@makenz.org
– Talk about things moving fast in the area of ‘small AI’ available for manufacturing (see also last week’s edition). Time series analysis, the systematic examination of data points collected sequentially over time, is an important tool in manufacturing. It is used in QC (anomaly detection) and monitoring process stability, in predictive maintenance and production planning and optimisation. Statistical models for time series data, such as ARIMA, have been around for over 50 years, and software for these tools is widely available in Python libraries, for example.
Now there is a new approach. In a recent publication, the authors are presenting a zero-shot time series forecasting tool based on a combination of machine learning tools. Zero-shot means the model has been pretrained and provides accurate predictions on new datasets without the need for additional training. The commercial version of the model is claimed to be “significantly smaller and more memory-efficient than its competitors. It not only excels in prediction accuracy but is also considerably faster.” Which means it can be deployed directly in manufacturing machinery and equipment – CNC mills, robots, even drones. Watch this space …
– And while we’re on fun smart technology …badminton with a robot, anyone?
– It is the US government’s declared intent – and the driver of major policy decisions, such as the introduction of additional tariffs – to strengthen the industrial base of the US economy. And yet there already is a long-term labour shortage in manufacturing in the US – albeit rapidly reverting back to long-term averages after the post-COVID19 peak. No surprise, then, that vocational education has attracted major attention from the current US government. You may have heard about the US President’s recent suggestion that $3 billion of funding should be moved from Ivy League (elite) universities to vocational education colleges, for example.
Traditionally, vocational education in the US has been plagued by a series of challenges, many of which sound quite familiar:
Fragmentation and Lack of Standardisation
- The US vocational education system is highly fragmented, with programs varying widely by state, region, and even city.
- Accreditation and recognition of qualifications are inconsistent, making it difficult for students to transfer credentials or for employers to assess skills across state lines.
Stigma and Cultural Bias
- There remains a strong societal bias favoring traditional four-year college degrees over vocational pathways, often reinforced by policymakers, educators, and parents.
- Vocational tracks have historically been seen as a “second-tier” option, sometimes serving as a default for students struggling academically, which has contributed to negative perceptions.
Mismatch with Labor Market Needs
- Many programs are not closely aligned with current industry demands. Employers often report difficulty, for example, finding workers with the right technical skills, especially in advanced manufacturing, renewable energy, and STEM fields.
Low Employer Involvement
- There is a lack of strong, systematic partnerships with employers for apprenticeships and on-the-job training. As a consequence, the share of the working population engaged in registered apprenticeships is low by international comparison: 0.3 – 0.4% in the US; 1.5 – 2% in Canada; 2-3% in Germany, and 3-4% in Switzerland.
Funding and Resource Constraints
- Many high schools have cut vocational programs due to funding pressures and a shift toward academic standards-based reform. Sustaining and updating equipment, curricula, and teacher training to keep pace with technological change is a persistent challenge.
Post-GFC, the number of youth apprentices (age 16 – 24) in the US has been rising steadily after a short-term trough:
As is the case in New Zealand, there is a low rate of direct transition from high school into apprenticeships:
In 2021, there were 593,690 registered apprentices in the US in total, meaning 64% of all prentices fell outside of the ‘Youth Apprentice’ category. This is in stark contrast to European countries, Germany, for example, where direct transition from secondary education into apprenticeships still is prevalent:
– The fix? On April 23, 2025, the US President signed an Executive Order “to modernize American workforce programs to prepare citizens for the high-paying skilled trade jobs of the future. The order directs the Secretaries of Labor, Education, and Commerce to review all federal workforce programs to modernize, integrate, and re-align programs to address critical workforce needs in emerging industries.”
The Order commits the Administration to submit a plan to support more than 1 million apprenticeships per year. That would be a 50% increase over the last available official figure of 667,000 registered apprentices (October 2024).
An important note of caution: All the data presented here refers to ‘apprentices’ in general. When we look at the breakdown by sector, we find that only a small proportion of apprenticeships are in manufacturing:
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