Manufacturing

Manufacturing Universities: A Catalytic Step Toward Revitalizing American Manufacturing

August 5, 2014
| Blogs & Op-eds

A key component for reviving American manufacturing should be the creation of a national system of “manufacturing universities.” This effort would incentivize post-secondary university programs to focus more on advanced manufacturing, while producing graduates better equipped with the knowledge and skills needed for careers in emerging, innovation-based industries.

The Export-Import Bank's Vital Role in Supporting U.S. Traded Sector Competitiveness

July 28, 2014
| Reports

As the official export credit agency of the United States, the U.S. Export-Import (Ex-Im) Bank plays a vital role in fostering U.S. traded sector competitiveness and facilitating exports of innovative U.S. products and services to foreign markets. The bank provides financing for export transactions that might not otherwise occur when private commercial lenders are unable or unwilling to provide financing to foreign purchasers of U.S. exports and plays a key role in leveling the playing field for America’s exporters by matching the credit support that other nations provide, ensuring that U.S. exporters are able to compete based upon the price and performance features of their products. In 2013, the Ex-Im Bank supported over $37 billion in U.S. exports—many of which would not have been possible without Ex-Im assistance—which supported over 200,000 jobs at more than 33,000 firms or their suppliers.

Yet the Ex-Im Bank is under heavy attack from a variety of ideological and special interest critics who oppose the Banks’ very existence. Populist opponents, from both the left and right, oppose the Bank as mere big business “crony capitalism” and a manifestation of unnecessary government intervention into market forces. Other groups have made unsubstantiated claims that the bank’s export credit assistance distorts capacity in markets such as the global aviation industry. Yet there is scant evidence that the global aviation industry suffers from sustained structural overcapacity or that export credit finance contributes to overcapacity in any meaningful way. This report debunks the fallacious claims of both the Bank’s ideological and special interest opponents, which have been designed to obscure the instrumental role the Ex-Im Bank plays in supporting U.S. manufacturing and services exports.

The reality is that the export credit finance the U.S. Ex-Im Bank provides is needed now more than ever, especially as foreign export credit competition continues to intensify. For example, in 2013, China issued three times as much new medium- and long-term export credit than the United States did (China’s $45.5 billion compared to America’s $14.5 billion) and over the past five years China and Germany issued four and five times much export credit as a share of GDP, respectively. If the Ex-Im Bank were disbanded as critics desire, leaving the United States unable to provide export credit assistance to foreign purchasers of U.S. products and services in situations where private sector lenders are unable to do so, the simple reality is that U.S. exports of aircraft, locomotives, power-generation equipment, and thousands of other products and services would be replaced by those of Asian or European producers, whose still-operating export credit agencies would step in to fill the void.

In short, failure to reauthorize the Ex-Im Bank will have far reaching negative results, including fewer U.S. exports, fewer U.S. jobs, and higher U.S. trade deficits. Therefore:

  1. With Congressional authorization of the U.S. Export-Import Bank set to expire on September 30, 2014, Congress should move expeditiously to reauthorize the Ex-Im Bank for a new five-year term.

  2. Congress should raise the Ex-Im Bank’s current exposure limit (i.e., lending cap) of $140 billion to at least $160 billion by 2018, ensuring that American exporters don’t fall behind foreign competitors, whose countries are investing substantially more in export credit finance as a share of their GDP than the United States. 

Senator Coons Unveils Bill to Designate "Manufacturing Universities"

July 28, 2014
Senator Coons Unveils Bill to Designate "Manufacturing Universities"

Senator Chris Coons (D-DE), leader of the Senate's Manufacturing Jobs for America campaign, introduced new legislation on the floor of the Senate designed to boost STEM education and help universities prepare students for careers in advanced manufacturing. The bill is based in part on ITIF’s report Cut to Invest: Support the Designation of 20 "U.S. Manufacturing Universities."

RAMI Legislation Poised to Revitalize American Manufacturing

July 24, 2014
| Blogs & Op-eds

The House Science Committee takes up important legislation this Friday in the Revitalize American Manufacturing Innovation (RAMI) Act which would provide Congressional authorization to establish at least fifteen Institutes of Manufacturing Innovation as part of a National Network for Manufacturing Innovation. Virtually every major American manufacturing competitor-including Canada, France, Germany, Japan, the United Kingdom, and the European Union-both operate and make substantial investments in similar public private partnerships designed to spur innovation in advanced manufacturing product and process technologies in their nations. The network of IMIs would play a vital role in enhancing U.S. industrial competitiveness by supporting development of technologies that will enable U.S. manufacturers to develop the cutting edge technologies needed to compete in the global marketplace. It's time America develop its own National Network for Ma nufacturing Innovation, and we urge the House to follow the Senate's lead in passing the RAMI legislation out of Committee.

U.S. manufacturing value added in 2012 remained 7.4 percent below 2007 levels.

U.S. manufacturing value added has still not recovered from the Great Recession. In fact, excluding computer and electronics, from 2007 to 2012, real value added produced by durables manufacturing fell by 2.9 percent while non-durables fell by 10.6 percent.  Meanwhile, economy-wide real value-added has grown by 4 percent. The lag of manufacturing growth behind overall economic recovery suggests that the talk of "reshoring" and a U.S. manufacturing renaissance is at best premature and at worst, hype. 

The Role of Trade and Technology in 21st Century Manufacturing

July 17, 2014
Stephen Ezell discussed the impact of U.S. trade policy on American manufacturing in testimony before the Senate Finance Committee.

Stephen Ezell discussed the impact of U.S. trade policy on American manufacturing in testimony before the Senate Finance Committee.

The Role of Trade and Technology in 21st-Century Manufacturing

July 17, 2014
| Testimony and Filings

In testimony before the Senate Finance Committee, Stephen Ezell analyzed the current challenges facing America’s manufacturing economy and offered several policy recommendations designed to bolster global competitiveness.

Government R&D and Manufacturing Competitiveness

July 7, 2014
| Blogs & Op-eds

For the United States to regain its lost manufacturing prowess, it must dramatically increase government investment in research, development and technology transfer. The private sector cannot do this alone, as businesses have been shown to underinvest in new technologies, while foreign governments have invested significantly in their own manufacturing sectors. A focus on industrially relevant applied research can pay major dividends for the U.S. economy and help us compete in the increasingly globally race for innovation advantage. 

Where Do New Products Come From? Insights From a New Study of Innovation in Manufacturing

July 2, 2014
| Blogs & Op-eds

A recent survey examining manufacturing innovation found that less than half of manufacturers innovated in the previous 3 years, and those that did were more likely to introduce a product imitation than an entirely new product. It also found that the largest amount of innovations come from customer ideas, although those innovations are less valuable to firms than innovations originating from technology specialists.

American Manufacturing Needs an Updated High Tech Trade Agreement

June 5, 2014
| Blogs & Op-eds

While the Information Technology Agreement (ITA) has played a critical role in promoting IT trade and investment, which in turn has boosted productivity, increased employment, and accelerated U.S. industrial growth, the product scope needs to be expanded. With negotiations on a revised agreement currently stalled—due primarily to reticence from Chinese negotiators to conclude a comprehensive expansion—the U.S. manufacturing community should lend its voice to amplifying calls to complete a robust agreement.

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