K12 Industry Partnerships
The US economy has begun to undergo a seismic shift. The COVID-19 pandemic, geopolitical developments, and a global AI tech race have led executives to increase their focus on reshoring and resilience. Over the past five years, hundreds of billions of dollars in capital investments have flowed into US advanced manufacturing, with leading global companies making huge commitments. Two features of this trend have so far gone overlooked. The first is its potential benefits for rural America. Indeed, a McKinsey analysis found that 63 percent of $1 trillion in announced advanced-manufacturing projects is anticipated to go to facilities within 15 miles of rural communities. K12 Industry Partnerships.
Such business investment could substantially increase demand for qualified manufacturing workers in the United States, potentially resulting in a 2.1 million-worker shortfall by 2030. This gap highlights the second overlooked feature: the central role K–12 schools can play to ensure business and governments succeed in supporting the push to reshore. In particular, rural K–12 schools will be vital in preparing students for future-oriented, tech-enabled careers in advanced manufacturing.
Industry and K–12 schools have a once-in-a-generation opportunity to join forces and usher in a brighter future for rural America’s businesses, communities, and students. The benefits of such a collaboration could be enormous: about $20 billion from improved productivity and employee retention and $34 billion in additional wages a year for rural American workers, according to McKinsey analysis.
These transformative gains are by no means guaranteed. They depend on a sufficient supply of qualified workers, which in turn will require K–12 schools and industry to collaborate closely to develop and implement programs on a historic scale. These stakeholders can pursue two major actions to usher in a new era for rural America: First, renew their focus on providing students with core literacy, math, and critical thinking skills; and, second, implement quality, evidence-based career-connected learning that bridges high school, postsecondary education, and the workplace.
Sizing the opportunity
America’s push for resilience and self-reliance has been underway for some time. According to a 2025 McKinsey Global Institute (MGI) report, US companies have diversified their sources of trade in recent years. The United States’ import concentration, which measures a country’s reliance on a small number of trading partners, declined by 18 percent from 2017 to 2024, reducing its trade risk. Over that same time span, MGI finds, US trade flows shifted by 9 percent to more geopolitically aligned nations, signaling an increased emphasis on supply chain resilience.5 Recent tariff announcements may result in additional shifts. Together, these trends could lead US companies to increase their focus on self-reliance.
In addition to changing trade flows, rising investments in advanced-manufacturing facilities and related infrastructure reinforce the United States’ growing focus on reshoring. Since 2020, US and foreign manufacturers and suppliers have dramatically increased their investments in the country. For instance, from January 2020 to January 2024, annual construction spending on manufacturing facilities grew by more than $150 billion, on average—a threefold jump (Exhibit 1).6 Similarly, greenfield foreign direct investment in the United States rose roughly fourfold from 2016 to 2024, reaching $231 billion.
Rural communities could be well positioned to benefit from these advanced-manufacturing investments. Research from McKinsey’s Institute for Economic Mobility examined rural America and identified six archetypes based on economic and demographic factors (see sidebar “Rural America archetypes”). We found that rural communities categorized as “manufacturing workshops” and “middle America” stand to gain the most from these investments.
We analyzed $1 trillion in announced advanced-manufacturing investments in strategic sectors—such as clean technology, semiconductors and electronics, and biomanufacturing—and found that approximately 63 percent of that investment will be within commuting distance of rural America (Exhibit 2).8 (For comparison, 30 percent of existing manufacturing jobs are located in proximity to rural communities.) More than half of the investments are concentrated in 20 heartland states.9 Among rural community archetypes, 35 percent of the investments are set to go to projects in or near middle-America communities, with 26 percent in or near manufacturing workshops.
How companies could benefit
Manufacturing companies that hire local, better-prepared workers could reduce workforce attrition and increase productivity. According to available data, annual turnover for manufacturing workers in rural communities exceeds 50 percent. Industry experts estimate that the most effective workforce development and retention efforts decrease attrition rates by 40 to 70 percent.10
Based on our analysis of the $1 trillion in announced investments, we estimate that advanced manufacturers could save as much as $20,000 to $30,000 a year per retained employee. The improved retention and productivity associated with local, well-prepared workers could be worth $20 billion annually.
A potential windfall for rural workers and communitie
Rural students, communities, and economies could see about $34 billion a year in wage increases across jobs created directly and indirectly from the influx of investment and expanded job opportunities—roughly 10 percent of rural America’s manufacturing GDP. Those annual net new wages would go to three groups of workers. First, local K–12 graduates hired to fill incoming advanced-manufacturing jobs could earn an additional 40 percent in incremental income, equivalent to a collective $3.8 billion.11 Second, these manufacturing investments could spur an additional $9.7 billion in indirect and induced wages in rural areas.12 Third, existing manufacturing workers who stay in their jobs could collectively see $20 billion in wage benefits, with retention further strengthened by equipping these workers with advanced skills and a deeper understanding of their roles, making them less likely to leave for lower-paying jobs.
The impact on future rural K–12 graduates could be life-changing. However, according to interviews with industry experts, students are not aware of that wage potential. As one employer stated, “There is a gap in student perception and reality. We just hired someone with an associate’s degree making $100,000.”
Advanced-manufacturing investments could produce jobs that require different education levels, from a high school diploma to a bachelor’s degree or higher (Exhibit 3). Critically, many jobs that do not require a four-year degree have clear career pathways. For example, welders develop skills on the job that make first-line production supervisor a natural next role. In turn, supervisors build skills that open up an even broader range of occupations, leading to expanded career options and earning potential.
Source: K12 Industry Partnerships
https://www.mckinsey.com/institute-for-economic-mobility/our-insights/manufacturing-in-rural-america-a-plan-for-k-12-industry-partnerships
McKinsey Institute for Economic Mobility