What Should America's Manufacturing Strategy Look Like?

If you haven't listened to Ken Rayment's Better Process Podcast yet, you should swing over and check it out. Every week, he asks someone from our world some variant of the same question, "what is the state of manufacturing today" and the answers, and discussions, are always thought-provoking and illuminative.

On the 13 August BPP podcast, Scott Paul, head of the non-partisan advocacy group Alliance for American Manufacturing, shared his thoughts on the current and future state of US manufacturing with Ken. True to AAM form, Mr. Paul was diplomatic yet passionate about why the US needs a long-term manufacturing plan, and what we should learn from this latest recession (in which 2 million manufacturing jobs were lost): that putting all of our eggs in the services basket (and especially the financial services bubble-basket) is simply not going to sustain our national economy.

He challenges Americans and legislators to update their perception of "manufacturing," not as an antiquated idea of America's strength, but rather as a multi-sector economic linebacker on our nation's starting team. The stats he tosses out during the podcast were more than a little shocking. Here's a taste:

"Although manufacturing only accounts for 9% of private sector employment, it still has an outsized impact: 40% of all engineers are employed in the manufacturing sector80% of patents come from this sector. . .manufacturing is the largest consumer of technology in the US."

Paul also asserts that economies based on debt and credit will not last -- an assertion backed up, obviously, by recent macroeconomic history. For long-term growth in jobs and GDP growth as a nation, we need to have a strategic, long-term manufacturing plan. The Eurozone has one, China has one, and we are currently operating at a strategic deficit. According to Paul, even Congress is starting to notice that we simply do not make enough goods here in the US, and that depending on China and other countries for the majority of our supplies is a dangerous bet indeed. Using a timely metaphor, Paul asserts that China's financing of US debt to enable consumers to purchase Chinese goods is a "Bernie Madoff ponzi scheme."

You can listen to the discussion here http://www.podcasternews.com/bpp/5614/industry-report-scott-paul-alliance-for-american-manufacturing/ on PCN, or download the mp3 file here: http://media.libsyn.com/media/betterprocess/BPP-2009-798.mp3.

Would be interested in your input -- if you had to set a manufacturing strategy for the US, what would it be?