Advanced Manufacturing and West Virginia

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This Legislative Science and Technology Note discusses advanced manufacturing in West Virginia, which includes tools like  machine learning, 3D printing, and robotics. Attracting advanced manufacturing firms and helping companies adopt advanced techniques could bring  jobs and economic  opportunities to West Virginia.

Advanced Manufacturing in West Virginia: Opportunities and Challenges

“Advanced manufacturing” refers to manufacturing companies incorporating innovative technologies or producing high-technology products. In recent years, West Virginia has attracted  new  advanced  manufacturing  firms and  investments. In early 2023,  about 17,380 West Virginians (about 47% of all manufacturing employees) were employed in advanced manufacturing based on  Brookings’ definition. Based on this definition, West Virginia ranks in the middle of Appalachian states for percent of total manufacturing firms (and employees) categorized as advanced.*

West Virginia Manufacturing Firm Size, by Number of Employees (2023, Q1)

Source: WVU Bridge Initiative, based on data from  Bureau of Labor Statistics, 2023

*No definition of advanced manufacturing  is perfect. This note uses for its analysis  a definition that may overestimate adoption by smaller companies and understate adoption for larger ones.

Advanced Manufacturing Fraction of Total Manufacturing: Appalachian State Comparison

  

* “Advanced” as defined by the Brookings Institute,  here.

Source: WVU Bridge Initiative, based on data from  Bureau of Labor Statistics:  West Virginia,  Kentucky,  Tennessee,  Ohio,  Pennsylvania,  Virginia

Advanced manufacturing technologies (AMTs) could help West Virginia firms identify inefficiencies, rapidly prototype and scale production, and automate time-consuming tasks. However, for small- and medium-sized enterprises (SMEs), which represent a large share of West Virginia’s manufacturing firms,  costs, capacity, and  operation disruptions present  particular challenges to AMT

Current Advanced Manufacturing Policies in West Virginia

The  West Virginia Economic Development Authority and the  West Virginia Department of Economic Development (WVDED) seek to  grow advanced manufacturing in West Virginia. These agencies, along with state resources such as the  Marshall Advanced Manufacturing Center (MAMC) and the  West Virginia Manufacturing Extension Partnership offer  access to advanced manufacturing technologies (AMTs), consulting services,  workforce training, and  other programs and incentives.

WVDED is in the process of developing a “Ready Sites Program,” which will assess industrial site development readiness. In 2024, West Virginia legislature passed a law (  HB 5162) that will create a “Youth Apprenticeship Program” and expand registered apprenticeship programs.  HB 4548 (proposed in 2024) would have allowed for application of the existing manufacturing investment tax credit to personal income tax; this bill passed the House but not the Senate.

While West Virginia  is attracting advanced manufacturing investment and has a significant advanced manufacturing industry (32% of total manufacturing by  Brookings’ definition), West Virginia manufacturing experts interviewed in 2024 described adoption of advanced techniques in the state as “immature, slow-growing,” and “stalled.”

Advanced Manufacturing and Economic Development

Supporting greater adoption of AMTs has the  potential to improve West Virginia manufacturing  productivity and  wages. An analysis using  2023 U.S. Bureau of Labor Statistics (BLS) data showed average weekly wages about 65% higher for West Virginia manufacturing employees in  advanced manufacturing sectors compared to those that did not meet the “advanced” criteria.

Actions to support AMT adoption  could  improve the competitiveness of SMEs, providing economic benefits for the state. Attracting advanced manufacturing companies to West Virginia could benefit not only  manufacturing workers but the  surrounding communities. The state’s  many brownfields, such as former minelands, could become sites for future businesses.

West Virginia and Neighboring State Policy Efforts

An  August 2023 assessment found that West Virginia ranks 26th in competitiveness for manufacturing investment. A 2022  Industrial Market Overview reported that West Virginia has low industrial real estate availability.

West Virginia, in comparison to several other Appalachian states, has fewer “shovel-ready” industrial sites. Kentucky is  doubling investment in career and technical education. North Dakota has an  automation investment tax credit. Virginia has a discretionary  site-preparation fund.

Certified or Shovel-Ready* Sites Larger than 25 Acres

* “Certification” and “shovel-ready” do not have a consistent definition across states, so comparisons should not be taken as direct. West Virginia has not yet completed its initial “Ready Sites Program” site reviews as of early March 2024.

Source: WVU Bridge Initiative, based on data from  West Virginia,  Kentucky,  Ohio,  Tennessee, and  Virginia

Policy Options for Attracting and Expanding Advanced Manufacturing in West Virginia

Policy options that support the goals of attracting advanced manufacturing companies and assisting SMEs with adoption of AMTs include

• creating a  fund like  Virginia Commonwealth’s Development Opportunity Fund for developing site infrastructure like high-speed internet connections  required for advanced manufacturing, and 
• expanding the manufacturing investment tax credit  to apply to personal income tax.
  

Each of these proposals carries a financial cost and uncertain economic benefit. However, advanced manufacturing has the potential to contribute value to West Virginia through more efficient company operations, high-paying jobs, and local community benefits.