We Need a Manufacturing Agenda

President Obama's announcement last week that Commerce Secretary John Bryson will join National Economic Council Director Gene Sperling as co-chair of a new White House Office of Manufacturing Policy offers a glimmer of hope that our government will finally get serious about promoting U.S. manufacturing.

The good news is we still have a vibrant manufacturing base that is dominant in many key industries. We can turn things around if our leaders will get behind sensible policies that will strengthen our manufacturing sector. There is a diversity of opinion about how best to achieve this, and it is vital that we keep our eyes on the ball and not get distracted by a well-intentioned social agenda driven by politics instead of market incentives.

But many good people have been working on this challenge and there is a wealth of intelligence available to Bryson and Sperling. For example, the Information Technology & Innovation Foundation (ITIF) has developed The Charter for Revitalizing American Manufacturing built on four T's: technology, taxes, trade and talent.

  • Technology is the key determinant of progress in today's world. We have a strong lead in R&D, but our competitors are chipping away at that lead, and our investment in R&D is declining. We have to resume our historical commitment to R&D and its application to innovation.
  • Our corporate tax system is a hodgepodge of special interest giveaways that discourage long term capital investment and R&D. We need a tax system that looks like it was designed on purpose -- to reduce rates and encourage long term investments in manufacturing and rewards exports.
  • Speaking of which, trade has been our Achilles' heel for too long. Free trade is fine and dandy when everyone plays by the rules. But our competitors are engaging in blatantly predatory trade practices that have destroyed thousands of small companies. Enough!
  • Talent is complementary to technology, but the kids coming out of our public schools are pathetically unqualified to work in modern manufacturing. The Germans and Japanese in particular have excellent programs for training bright young people to work with advanced manufacturing technologies. We have enough lawyers. We need more people who know how to make things.

While the charter focuses on all manufacturing, it gives special emphasis on encouraging small manufacturing. It is worth nothing that this ITIF document represents a consensus among diverse interests including the AFl-CIO Industrial Council, the Alliance for American Manufacturing, The Brookings Institution, the Council on Competitiveness, the Manufacturers Alliance, the Manufacturing Institute, MIT and many others. While there is room to strengthen the agenda further -- by adding major regulatory reforms -- it provides the building blocks of what is needed for strengthening manufacturing competitiveness, economic growth and job creation.

Jerry Jasinowski, an economist and author, served as President of the National Association of Manufacturers for 14 years and later The Manufacturing Institute. Jerry is available for speaking engagements.