Reaction to Speech Thanks for New Innovation Center but Policies Need Help

Reaction to Speech: Thanks for New Innovation Centers but Policies Need Help

Six new National Network for Manufacturing Innovation centers will bolster the sector, however better policies are needed to create more manufacturing jobs.

Manufacturing received some welcome news in President Obama’s State of the Union speech last night with the announced six new manufacturing innovation institutes.

Additional assistance came in the form of the President’s call to roll back sequestration cuts to federal research and development.

These moves are important steps forward according to Robert Atkinson, President of the Information Technology and Innovation Foundation (ITIF).

Atkinson, however felt that President Obama’s connection between technology and the hollowing out of the middle class was disappointing. "Technology is a key to economic growth and opportunity and it is not the cause of middle class economic woes, " he said. " In fact, it is the solution to those woes. “We need to enhance technological development and promote automation and productivity growth, not equate ‘robots’ with unemployment or inequality.”

Industry group Alliance for American Manufacturing was also disappointed by a number of elements in the speech.  Scott Paul, president of the group issued the following statement:

This is the third consecutive State of the Union in which there has been a strong rhetorical focus on manufacturing, and that’s welcome. But the progress, despite the rosy picture painted by the President, has been painfully slow. And in some cases, such as the trade deficit with China, we’ve seen backsliding.

Yes, the US may be named as the top country in which to invest by executives, surpassing China, but FDI into China still blows away FDI coming into the US, according to OECD figures.

The President in many ways absolved past public policies as a reason why there is more economic insecurity and a decline in good, middle-class jobs. He shouldn’t have. From a flawed trade agreement with China in 2000 to ceding more power that enabled Wall Street to dictate terms to Main Street manufacturing in 1999, the U.S. has committed a number of unforced errors along the way.

While the President indicated there were a number of things he planned to do on his own, without Congress, in 2014 to boost the economy, he left some important things off that list:

  • tightening Buy America compliance among federal agencies to prevent tax dollars from leaking overseas
  • launching an executive effort to cut our trade deficit with China in half. (Doubling exports means very little if imports rise even faster.)

One thing we know at AAM is that the American people are ready for bold action by Congress and the Administration to do more to support American jobs, and manufacturing in particular. 

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