A number of prominent economists have used job losses in China's manufacturing sector as justification for abandoning hope for U.S. manufacturing. But these "job losses" never really existed: they were due to statistical changes and the massive restructuring and privatization of China's economy. Recent data indicate that employment in China's manufacturing sector is growing, not shrinking.
While America Sleeps Other Nations Bolster Manufacturing Sector
In recent years, many U.S. competitors have established strategic, well-funded advanced manufacturing support systems that have proven vital to expanding technology creation, supporting the development of innovative new products, improving manufacturing productivity, and bettering trade performance. From Germany and Japan to the United Kingdom, a focus of these strategies has been support for investments in public-private partnerships focused on industrially relevant applied R&D activities. Their goal is to ensure that research discoveries or inventions made in their countries’ universities and national laboratories are commercialized into products that are manufactured at scale by local industry. The United States has not kept pace. But legislation working its way through Congress now via the Revitalize American Manufacturing and Innovation Act could help rectify this situation and revitalize U.S. industrial competitiveness by establishing a National Network for Manufacturing Innovation (NNMI)—a network of 15 Institutes of Manufacturing Innovation focused on innovation in advanced manufacturing product and process technologies.
Spurring a Manufacturing Renaissance: Increasing Competitiveness through Energy Efficiency
The Job Creation through Energy Efficient Manufacturing Act is a necessary component in building a robust manufacturing innovation ecosystem. The bill would spur the development and implementation of energy efficient technologies in the manufacturing sector, improving the productivity and competitiveness of American firms, while also reducing production costs and enhancing environmental quality.
Manufacturing Innovation is Key to Boosting Growth
The Senate Commerce Committee took an important step towards boosting manufacturing competitiveness and innovation last week with the mark-up of the Revitalize American Manufacturing and Innovation Act (RAMI). The bipartisan bill, cosponsored by Senators Sherrod Brown (D-OH) and Roy Blunt (R-MO), would create the National Network for Manufacturing Innovation (NNMI), which would be comprised of up to 15 public-private, manufacturing innovation hubs. These centers would accelerate manufacturing innovation in technologies with commercial applications by bridging the gap between basic research performed at U.S. universities and research laboratories and product development by U.S. manufacturers.
What Manufacturing Renaissance?
Contrary to growing popular opinion, manufacturing is not on the rebound and new policies are required to address the challenges the sector faces. This includes lowering corporate taxes and establishing a robust innovation ecosystem that can promote new product development, enhance productivity and improve global competitiveness.
Why You Should Care About the Federal Budget
The President’s FY 2015 budget proposal does direct funding toward a number of important initiatives in R&D, while also spurring the commercialization of innovations. However, it does not arrest the long-term trend of continued underinvestment in the core building blocks of U.S. competitiveness.
Two Cheers for Martin Baily’s “U.S. Manufacturing”
A new study by Martin Bailey and Barry Bosworth confirms previous research conducted by ITIF which shows a steep decline in U.S. manufacturing output over the last decade. This new data will hopefully serve as a wakeup call for policymakers on the need to address the competitiveness and growth issues faced by this vital sector.