Tax Reform, Trade Promotion Among CEO's Top Policy Priorities

Feb. 17, 2011
Business leaders say public-private cooperation key to U.S. manufacturing competitiveness.

For much of the 20th century, the United States was the world's dominant manufacturing economy. But due to globalization and the rise of emerging nations such as China, "the U.S. manufacturing sector today faces unprecedented challenges."

That was the impetus for a report issued today by the Council on Competitiveness -- "Ignite 1.0: Voice of American CEOs on Manufacturing Competitiveness" -- in which business leaders share their top policy priorities to boost U.S. manufacturing.

Noting that the United States ranked fourth in the 2010 Global Manufacturing Competitiveness Index, the report asserts that our nation "has been challenged to create high-value, manufacturing-driven jobs, which, in turn, has become a tremendous challenge for both policymakers and business leaders keen on maintaining the prosperity of the American working middle class."

The report summarizes the recommendations and insights gathered from interviews with nearly three dozen CEOs from manufacturers such as Deere & Co., Dow Chemical, DuPont, Ford and Lockheed Martin. The CEOs were asked what federal and state policymakers should do to address 10 areas:

  1. Human capital development policies.
  2. Infrastructure investment and development policies
  3. Economic development and trade policies.
  4. Central bank and finance policies.
  5. Corporate and individual tax policies.
  6. Legal and regulatory system and policies.
  7. Science, technology and innovation policies and investments.
  8. Energy policies and investments.
  9. Health care policies and systems.
  10. Other key insights and recommendations.
Among the highlights of their recommendations:

Tax Policy

  • Institute overall tax reform and provide long-term clarity and stability in corporate tax policies.
  • Enhance and make R&D tax incentives permanent.
  • Diminish the cost of repatriating earnings.
  • Develop more globally competitive corporate tax rates.
Energy Policy
  • Outline a comprehensive energy policy that encourages reinvestment in current infrastructures, pursues energy efficiency and conservation, and balances investment across a diverse portfolio of all fuel sources -- including solar, wind and nuclear -- while tapping critical U.S. assets in coal, natural gas and offshore oil.
  • Immediately begin planning to increase the use of nuclear power.
  • Increase collaboration with businesses when drafting new regulations to ensure that they are cost-effective, attainable and employ available technologies.
  • Improve and modernize the U.S. electric grid to increase short- and long-term reliability and develop the infrastructure needed to facilitate the inclusion of the significant amounts of energy expected and to deliver considerable energy from alternative sources.
  • Incentivize the use of cleaner and more abundant fuels, such as natural gas, to supplement the transition away from of oil and coal.
Trade Policy
  • Develop a new trade promotion and fast-track authority.
  • Create a more comprehensive and competitive export trade-control process.
  • Ensure U.S. rights under existing trade agreements are enforced, and ensure compliance with WTO rules and regulations.
  • Create pro-business relationships with all trading partners, especially emerging-market countries, and aggressively pursue closure of a commercially meaningful WTO Doha Agenda.
Regulatory and Legal Environment
  • Collaborate with government and business leaders to create policies enabling appropriate evaluation to be conducted through a lens of global competitiveness in place of a U.S-centric view.
  • Develop a benchmarking process to analyze the impact of regulations from a holistic global competitiveness perspective.
  • Diminish the cost and complexity of regulatory compliance.
Science, Technology and Innovation Goals
  • Establish a consortium of business, university, labor and public-sector leaders to establish daring long-term goals with a 15- to 20-year development horizon and then work collaboratively to craft policy, investment and development programs -- as well as education and other physical, technology and intellectual infrastructures -- that support progress toward those goals.
  • Strengthen intellectual-property protection, particularly in emerging markets, and ensure investments in science, technology and innovation provide maximum long-term return to the U.S.
Access to Talent
  • Reform visa and green-card processes that create backlogs that block access to talent.
  • Benchmark visa best practices from other countries that are successfully attracting and retaining top science, technology, engineering and mathematics (STEM) talent.
  • Create opportunities for scientists and engineers born outside the U.S. to become an integral part of U.S. competitive capabilities instead of focusing primarily on border protection.
U.S. Education in Science and Technology
  • Focus educational curricula on developing STEM skills. Develop flexible education tracks that foster STEM literacy through community colleges, vocational trade schools, work training programs, etc.
  • Empower performance-based legislation such as the America COMPETES Act, the Elementary and Secondary Education Act, Investing in Innovation, and Race to the Top and Teacher Incentive funds.
  • Develop federally funded programs that promote and market manufacturing as a high-value and vital industry with rewarding long-term career opportunities for high school and college students in the U.S.
  • Subsidize state universities' efforts to attract higher-caliber students to STEM programs and increase the number of graduates.
A common theme running through the comments from CEOs was the need for strong public-private partnerships.

"Executives consistently noted that success hinged on the ability of the public and private sectors to work together and have open, honest, ongoing productive dialogues focused on creating an environment in the United States that promoted competitive manufacturing -- an environment that, among other things, creates and maintains a competitive cost structure, balances regulatory policy, spurs investment, supports globalization and attracts, develops and retains the very best talent required at all levels of the manufacturing process," the Council on Competitiveness noted in the report.

About the Author

Josh Cable | Former Senior Editor

Former Senior Editor Josh Cable covered innovation issues -- including trends and best practices in R&D, process improvement and product development. He also reported on the best practices of the most successful companies and executives in the world of transportation manufacturing, which encompasses the aerospace, automotive, rail and shipbuilding sectors. 

Josh also led the IndustryWeek Manufacturing Hall of Fame, IW’s annual tribute to the most influential executives and thought leaders in U.S. manufacturing history.

Before joining IndustryWeek, Josh was the editor-in-chief of Penton Media’s Government Product News and Government Procurement. He also was an award-winning beat reporter for several small newspapers in Northeast Ohio.

Josh received his BFA in creative writing from Bowling Green University, and continued his professional development through course-work at Ohio University and Cuyahoga Community College.

A lifelong resident of the Buckeye State, Josh currently lives in the Tremont neighborhood of Cleveland. When the weather cooperates, you’ll find him riding his bike to work, exercising his green thumb in the backyard or playing ultimate Frisbee.  

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