Build A Plan For Manufacturing Innovation

July 14, 2011
The good news is that our voice is being heard. Manufacturing issues are beginning to take center stage on a national level.

Beyond the technological innovations that will continue to push the manufacturing industry forward, another piece that cannot be overlooked is the need for innovation-based public policy initiatives that directly affect U.S. manufacturers, particularly the small and medium-sized companies where most of the innovation will take place.

Presently, U.S. manufacturers are operating in a business environment that hinders competitiveness on a global scale. Our foreign competitors are pouncing on this opportunity to dominate in areas where the United States is lagging. But we need to stop making our foreign competitors the "bad guys" it's time for our government to join with our schools and businesses to take the action necessary to revitalize the American manufacturing sector.

It should begin with a comprehensive national strategy based on collaboration and focused on driving innovation and increasing competitiveness, such as that proposed by AMT's Manufacturing Mandate. The mandate calls for a coordinated federal manufacturing policy that: 1) incentivizes innovation and R&D in new products and manufacturing technologies; 2) enhances global competitiveness; and 3) builds a better educated and trained "smart force."

I've been traveling the country for the past two years delivering the mandate's message to a variety of audiences, everyone from shop owners to top industry executives to officials in the highest ranks of government. The response has been overwhelmingly positive, and all stakeholders are eager to work together.

How do we incentivize innovation and R&D? The first step is to look at the existing infrastructure of manufacturing programs and services and consolidate them into Regional Manufacturing Innovation Centers. There are currently numerous government-supported service centers located throughout the country that provide information and services to manufacturers (Manufacturing Extension Partnerships, Economic Development Centers, SBA field offices, the U.S. Commercial Service, etc.).

In many cases, manufacturers, especially small companies, don't have the resources and/or the know-how to access the support and opportunities available to them from the federal government. These include defense-critical support services such as supply chain connections, technology pass through and commercialization, and rapid product development and manufacturing channels. A Manufacturing Innovation Center, essentially a one-stop shop for manufacturers, located in areas with a high density of manufacturers and schools, is an ideal bridge for the federal government to foster manufacturing technology innovation. MEPs are already well positioned to promote technological innovation and R&D in regions already dense with small manufacturers and academic institutions, but the MEPs need further support and resources.

We also must enhance our global competitiveness by leveling the playing field for U.S. manufacturers. Real tax, trade, and regulatory reform is necessary, as well as trade promotion programs for small and mid-size manufacturers. Right now, the uncertain business environment is contributing to the reluctance of U.S. businesses to invest in new products and diversify into new markets. They are forced to sit on the sidelines while our foreign competitors take advantage of more favorable treatment from their government. Our government actually works against us with burdensome regulations, outdated trade policies, and inequitable taxation.

Perhaps most importantly, we must address the skilled worker shortage and build a "smartforce" capable of working on today's factory floor. Today's jobs in manufacturing are quite different than most American workers probably imagine. The factory floor is awash with new technology and processes that require new, advanced, and ever-changing skills. Even though these jobs are well-paid and offer bright futures, they go unfilled. A revitalized manufacturing industry relies on a well-trained and educated "smartforce." It starts with K-12 education that promotes math and science and makes students aware that a career in manufacturing is exciting and well-paid. It continues to universities and community colleges with advanced manufacturing degree paths. Industry-led national skills certifications could benefit both manufacturing firms looking for skilled workers, as well as the workers themselves as they look to advance their careers.

Beyond government policy support, however, all of these initiatives require industry support as well. Only by getting industry on board with these important initiatives and taking action to make our voices heard will these important changes be made to restore manufacturing to its rightful place leading the U.S. economy.

The good news is that our voice is being heard. Manufacturing issues are beginning to take center stage on a national level. Just recently, President Obama endorsed a manufacturing skills certification program proposed by industry education leaders. The Administration also introduced the Advanced Manufacturing Partnership, a national effort to bring industry, universities and the federal government together to invest in emerging industries, especially those critical to national security.

In Congress, many pieces of legislation have been introduced aimed at strengthening the manufacturing industry as a means to creating secure, well-paying jobs for the middle class. Among them:

  • National Manufacturing Strategy Act - Directs the President to work with industry and labor leaders in developing a multi-year national manufacturing strategy;
  • Research and Development Tax Credit Extension Act Amends the Internal Revenue Code of 1986 to make the research credit permanent and to increase the alternative simplified research credit;
  • Job Opportunities Between Our Shores Establishes a Workforce Investment Act pilot program to provide education and training programs in advanced manufacturing;
  • Make It In America Block Grant Act Establishes a grant program for small and medium-sized businesses in communities hardest hit by the recession to retrofit their operations and train their workforce in the most promising technology; and
  • Regulations from the Executive In Need of Scrutiny (REINS) Act Requries that every major regulation would require a separate vote in Congress

If we are really serious about restoring this country to worldwide manufacturing leadership, it will take a new approach that nurtures new ideas and adapts with lightning speed to changing circumstances. It will take an economic policy based on innovation and a national strategy to promote manufacturing. While innovation from the R&D department is crucial to creating the best, most advanced manufacturing technology in the world, innovation from the nation's policy makers is just as important.

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