The Future of U.S. Manufacturing

Picture source: money.cnn.com

 INDUSTRIAL ENGINEER – Volume 44 Number 3

Is American manufacturing prepared for a turnaround? While the daily media remains gloomy on the subject, a new comprehensive report from the U.S. Council on Competitiveness says “yes.” Titled “Make: An American Manufacturing Movement,” it is based on extensive real-world research into the manufacturing sector, its challenges and its prospects for lasting growth.

The backbone of the report is and 18-month series of council interviews and dialogues with companies that are succeeding despite heavy competition from low-wage overseas rivals. It’s an eclectic mix, ranging from industry giants such as John Deere, Ford, Boeing and Alstom to agile innovators such as Tesla Motors and Mag Instruments to stalwarts like Harley-Davidson, Lenox and Crayola.

Their stories show that a resurgent and sustainable manufacturing industry is feasible and worth encouraging as a national policy. As the council found, manufacturing remains an indispensable driver of innovation and job creation. According to the report, “every manufacturing job supports five other jobs and every dollar in total manufacturing value added supports $1.40 in output in other sectors of the economy. No other sector comes close as a multiplier.”

Despite that assessment, the council notes that misperception of industry’s place in contemporary society remains a serious concern: “ The image of manufacturing as ‘dumb, dirty, dangerous and disappearing,’ is far from accurate. Today manufacturing is smart, safe, sustainable and surging.” And decades-old governmental policies are restricting innovation and investment in manufacturing – two essentials for sustainable growth.

The council has identified five key challenges facing manufacturing today and has proposed a set of recommendations:
Challenge 1: Fuel investments in the innovation and production economy from startup to scale-up. Solution: Enact fiscal reform, transform tax laws, regulations and other structural costs to spur investment, ramp up production, capitalize growth companies and create skilled jobs.
Challenge 2: Expand U.S. exports, reducing the trade deficit, increasing market access and responding to foreign governments protecting domestic producers.
Solution: Create fair and open global markets for U.S. goods and services to reduce the trade deficit and increase exports as a percentage of gross domestic product.
Challenge 3: Harness the power and potential of American talent to win the future skills race.
Solution: Prepare the next generation of innovators, researchers and highly skilled workers.
Challenge 4: Transform the industrial base to smart manufacturing and innovation networks to spur next-generation productivity.
Solution: Create national advanced manufacturing networks and partnerships, prioritize research and development investments and deploy new tools, technologies and facilities.
Challenge 5: Optimize/integrate next-generation supply networks with advanced logistics.
Solution: Develop and deploy smart, sustainable and resilient energy, transportation, production and cyber infrastructures.
For the entire report, that’s available as a free download from the council’s website at www.compete.org/publications/detail/2064/make/.