In 2012, when I worked at the Stanford School of Engineering, the competition to hire newly graduated Computer Science (CS) students was so fierce that we heard stories of recruiters driving to campus to distribute their business cards outside the CS lecture halls! Fast forward a decade, and the demand for talent, while still high, has shifted to those who have mastered the ability to build at the intersection of the physical and digital worlds. 

A decade ago, given the fledgling nature and limited adoption of many digital tools, career opportunities were bifurcated into two camps: tech jobs and non-tech jobs. Physical industries remained particularly analog, and therefore “non-tech,” due to the complexity, cost, and organizational cultural changes associated with implementing broad, digital transformation programs. 

But things began to evolve. We saw a maturation of technologies, a decrease in costs, a proliferation of new computing, and the reality that most economy-driving industries were operating – or more accurately “trying” to operate – with less than 10% digital penetration. And then the pandemic hit. COVID catalyzed and accelerated industrial digital transformation by revealing the fragility of our essential industries. As physical industries scrambled to establish resiliency through the implementation of new digital transformation programs, talent emerged as the greatest bottleneck. 

The Blending of Digital and Domain Skill is a Cornerstone of the Industrial Evolution

This need for talent to power the Industrial Evolution has only intensified since 2020. Geopolitics, an aging skilled labor force, immigration changes, and strained supply chains have placed increasing pressure on our domestic physical industries. In addition, the Government’s Investing in America agenda, characterized by legislation, including the CHIPS and Science Act, the Inflation Reduction Act, and the Bipartisan Infrastructure Law, has significantly increased demand for workers with both technical and domain experience — a hybrid workforce that has not been readily available. 

The blending of digital and domain skills in the physical sector is a cornerstone of the Industrial Evolution and defines the development of next-generation talent. In short, the Industrial Evolution is expanding the pool of good jobs in the U.S.

Physical Industry Startups are Expanding Tech-Forward Job Opportunities

In the last few years, physical industry startups have become the engine of the Industrial Evolution — embracing technology to revitalize and improve industrial processes and increase productivity and sustainability. Inspired by a growing cohort of successful, ambitious physical industries companies — like Tesla, SpaceX, Samsara, Rivian, and more — these startups have played a critical role both in migrating advanced technologies to the physical sector and in democratizing technology, making it more accessible to a broader swath of the workforce. As a result, these startups are creating digital-forward career opportunities for individuals of diverse backgrounds who do not fit the traditional Silicon Valley mold of the typical CS graduate and have historically been thought of as non-tech professionals. 

5 Trends will Drive Career Opportunities in Physical Industries

We have been hearing about these growing job prospects anecdotally from many Eclipse portfolio companies, so in 2023, Eclipse partnered with Lightcast, a labor market analytics firm, to quantify the career opportunities enabling the Industrial Evolution. We’re delighted to share the full report which, among other things, uncovers five major trends:

1. Digitization is growing in the physical industries. Since 2017, job postings seeking digital skills have grown more than three times faster in the physical sector than in the tech industry. 

2. Demand for top digital skills has nearly doubled, but domain and human skills are increasingly critical for applying new tech. The demand for top digital skills in the physical industry has doubled or almost doubled since 2017. Yet, domain skills, such as knowledge of construction and warehousing, and human skills, such as self-motivation and problem-solving, are essential in applying digital tools to physical space.

3. New blended roles are emerging that require both digital skills and industry knowledge. Physical sector companies are increasingly hiring for new blended roles, such as Controls Engineers, which bridge the gap between the technology being used and the physical products being created. 

4. While digitization of the physical sector will require digital upskilling, the largest opportunities for training are in reskilling domain and human skills. Across all physical industry segments, demand for domain skills is growing faster than demand for digital skills. At the same time, digital skills are more readily transferable than other types of skills across sectors of the economy. 

5. The physical sector offers more on-ramps to good jobs and sustainable careers for a wider talent pool compared to the tech sector. Physical sector companies have reduced or eliminated degree requirements to a greater extent than tech companies. They also provide more apprenticeship and internship opportunities than those in tech. These entry-level positions within the physical sector open career pathways to high-demand roles with significant earnings potential.

The Industrial Evolution is well underway, providing greater productivity and competitiveness to the U.S. economy and high-quality, good jobs to a diverse range of people across the country. 

Download the full report here.

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