Advancing the Future of Manufacturing

Apr 30, 2014 - 1:30pm


Executive Vice President
President, Center for Advanced Technology & Innovation

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Photo: George Frey/Bloomberg
Photo: George Frey/Bloomberg

The U.S. manufacturing sector is on the cusp of an historic revitalization—not because it’s returning to the glory days of the past, but because it’s shifting towards a bright new future of rapid advancement and innovation, and even stronger productivity and growth.

To realize the full potential of this renaissance, there are some things we are going to have to do and some challenges we are going to have to overcome.

Keep the Knowledge Here

One of the most important steps to maintaining our lead is keeping the knowledge here, on U.S. soil.

The U.S. semiconductor industry learned this the hard way. The industry first emerged in Silicon Valley, but many U.S. consumer electronics manufacturers decided to move production to Asia because, at one point, the labor cost differential was so great.

At the time, it didn’t seem like a big deal to offshore some consumer electronics production because it wasn’t considered “knowledge work.” But because we shipped much of our chip fabrication overseas, we forfeited our lead in silicon-processing skills from semiconductors. As a result, we let go of a lot of the electronic supply chain and lost out on emerging technologies including flat-panel-display, solar panels, and energy efficient lighting.

The good news is that it’s never too late to turn things around. The U.S. semiconductor industry is poised for a rebound—and it’s happening on U.S. soil. Intel is leading the way with $3.5 billion in investments this year on new chip fabrication facilities in Arizona and Oregon. Samsung, TI, and Micron are also expected to make robust investments in equipment and material for U.S. operations.

Close the Skills Gap

To keep the knowledge on how to make things, we have to have a qualified workforce with the advanced skills and training to do knowledge work.

U.S. manufacturers have added half a million new jobs since the end of the recession, but they are having a hard time finding adequately qualified workers to fill these jobs.

—52% of mid-market manufacturers using advanced techniques have unfilled jobs, and 74% of these employers cite deficiencies in STEM skills—science, technology, engineering, and math—as a major concern.

We can do a much better job of preparing young people for advanced manufacturing jobs by adopting customized certification programs and working with trade schools and community colleges.

Our nation needs to fix our public K-12 schools, which are failing to produce students who are proficient in science, math, and reading. Without that foundation, it’s difficult to build strong skills in technology and engineering, or problem solving and critical thinking.

Reforming our immigration system would also help us attract and retain more of the world’s best talent and hard workers

The Federal Role In Fostering Innovation

There are other crucial ways our leaders and lawmakers can help foster innovation in America.

A major way would be addressing our fiscal crisis—driven by unsustainable entitlement spending. As long as every dollar of federal revenue goes toward mandatory spending, we won’t be able to invest in national priorities. There will be no money left for things like science and technology—even though the public sector has traditionally supported the basic research that lays the groundwork for much of our innovation.

Our leaders must get serious about a national energy policy that will allow us to fully leverage our domestic resources. As a part of comprehensive tax reform to make the United States a more competitive place to do business, we need a permanent extension of R&D tax credit.

To keep innovation flowing, we also need strong intellectual property protections, and to crack down on IP theft, piracy, and rogue websites; fully fund IP enforcement; and negotiate strong IP protections in trade and investment treaties.

Those are just a few of the policy areas that can make or break innovation—there are many others that contribute to a business environment that will allow manufacturing to thrive or decline. 

Infographic courtesy of FreeEnterprise.com

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