As the world continues to decarbonize, demand for clean energy technologies is taking off. This presents a historic opportunity for state and local governments to harness this demand to generate equitable and sustainable local economic growth. Most notably, the Inflation Reduction Act of 2022 will inject hundreds of billions of dollars into dozens of energy transition projects around the country, and policymakers will need to ensure that their region is at the forefront of this new industrial revolution.
This report describes and applies a framework for evaluating local energy transition industrial strategies with a focus on the Great Lakes region. We begin by describing the current state of the energy transition economy nationally, providing a snapshot of differences across regions in their progress toward and specializations in specific energy transition products. We find that:
- Energy transition industries are responsible for 11.4 percent of national employment and have higher median wages than other industries. The fastest growing industries include storage battery manufacturing and solar electric power generation. Some examples of occupations in these industries include electrical assemblers, solar photovoltaic installers, and engineers. In addition to higher wages, a majority of these industries offers a share of “good jobs” above the economy-wide average.
- Energy transition occupations rarely require more than a high school diploma. In eight of the nine energy transition sectors that we identify, more than half of the jobs only require a high school diploma and over 70 percent require no more than a high school diploma.
- Racial diversity can be improved, especially within higher paid sectors. The distribution of white and non-white groups differs quite a bit across the sectors. The Transition Enabling sector has comparatively low levels of Hispanic and Black employment but offers the highest-paying jobs, both nationally and in the Great Lakes. Increasing diversity in this sector should be a priority. Additionally, the most diverse sector, Forestry, Land, and Agriculture (FLAG), offers virtually no upward mobility.
- The most seamless transitions are likely to occur in the manufacturing and utilities industries. The manufacturing and utilities sectors consist of industries that frequently lead to transitions into other related industries—i.e., they offer a range of growth opportunities, including in many of our identified clean transition industries.
- Transitions into technical or information industries will be more difficult. In contrast, some industries require specialized inputs and benefit from being geographically concentrated, such that in many parts of the country there are few opportunities to move into them. These include high-paid transition activities such as environmental consulting, engineering, and industrial design that are critical in the development of systems such as smart electrical grids. While some parts of the Great Lakes (e.g., Chicago) will be able to build out these activities, other parts of the region will need to focus their economic development strategies elsewhere.
- The Great Lakes is well-poised for the energy transition but will need to close significant workforce gaps. There are existing strengths within the Great Lakes region, such as a historical specialization in the manufacturing sector, that will serve as a good foundation during the transition. However, our analysis highlights the need for strategic planning to address significant workforce gaps—in particular, the region will want to develop workforce capabilities and economic development strategies that support job growth in the high-paying Transition Enabling sector.
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