Recommendations > Recommendation Detail
The Challenge: The Long-Term Prosperity and Security of the United States Depends on a Healthy Manufacturing Sector
- In 1980 manufacturing accounted for 20% of American jobs, but due to rising productivity, competition from foreign trade, and changing consumer tastes, today the sector represents only about 9% of total employment.
- Though the economy has become increasingly service-based, we can’t afford to stop building things in America. The U.S. manufacturing sector creates good middle class jobs and generates new waves of technological innovation, and boosting manufacturing exports will help to restore macroeconomic stability by leveling the trade deficit.
- America can never risk becoming so dependent on foreign production that we lose the ability to make what we need to defend the country and our interests abroad.
Jobs Council Recommendation: Revive U.S. Manufacturing by Emphasizing our Traditional Strengths and Taking Aggressive Steps to Capture Global Market Share
The U.S. still boasts the most productive, highly-educated manufacturing workforce in the world, unrivaled intellectual property protections, and an advantage in low-cost energy. These strengths at home, and rising costs abroad, give reason to be bullish about American manufacturing. The U.S. can gain three to four percentage points of global value added market share—an ambitious but achievable goal—if we emphasize our traditional manufacturing advantages while taking more aggressive measures in key sectors to take share from global competitors.
Build U.S. Competitiveness Broadly in the Areas of Skills, Regulation, Taxes, and Infrastructure. As outlined in this report as well as the Interim Report, the Jobs Council recommends simplifying our convoluted regulatory and tax laws, ensuring that our students and workers have the skills they’ll need, and upgrading our deteriorating infrastructure so manufacturers can reach customers. We can’t expect to keep manufacturing in America if we don’t take measures to bolster our competitiveness across the board.
Help U.S. Manufacturing Exports Compete in Global Markets. The Jobs Council supports reform of our export controls, balancing necessary protections for military technologies with export opportunities for our manufacturers, to help encourage high tech exports. Similarly, we can take a page from Germany’s playbook and do much more to help smaller manufacturers reach foreign markets, including leveraging the Manufacturing Extension Partnership and expanding its ExporTech program to further support small and medium enterprises in their export efforts. We can also learn from successful programs like North Carolina’s Small Business and Technology Development Center, which provides comprehensive coaching and support on entering foreign markets.
Leverage Local Competitive Advantages to Spur Manufacturing Cluster Development. The U.S. should leverage its many strong industry clusters at the local level to attract investment and jobs in manufacturing. The Jobs Council proposes a national challenge to identify and deepen the position of existing clusters where we have the potential for a manufacturing edge. As part of this challenge, we need to develop a national “gold standard” of what it takes to win at the local level—learning from those clusters that have made it work—and target incentive funding to those states and localities most prepared to make the improvements to meet that standard.
Capture the Market in Promising New Manufacturing Sectors. To capture new industries that are currently up for grabs, the U.S. must assist them from start up to scale up. The Jobs Council recommends utilizing more government grants and pilots to provide “proof points” for new technologies. In addition, the government can create demand for the scale-up of new technologies through its own massive procurement power as well as by promoting new technology standards for buildings and consumer goods. The Council also recommends increased action by the government to smooth the road for innovative new start-ups by easing the financing gap for high growth entrepreneurs (through programs like SBIR/STTR and SBIC) and connecting small firms with larger supply chains can help new manufacturers and industries get started here in the U.S. And in order to attract manufacturers in emerging sectors we agree are critical, the U.S. should develop innovative location assistance programs which help manufacturers setting up shop find the workforce they need and navigate regulatory hurdles.