India's Manufacturing Policy is Wake Up Call for U.S.
Nov. 3, 2011
The threat is that the U.S. does not have its own national policy, says Alliance for American Manufacturing.
The new National Manufacturing Policy, announced last week by India, is a strong signal to the U.S. that we "need to get our house in order," explains Scott Paul, Executive Director of Alliance for American Manufacturing (AAM).
"We missed the boat with China ten years ago and we are still paying the price for that. So let's make sure that India follows the WTO rules," Paul says. "Beijing hasnt fully lived up to its commitments on currency and other trade practices."
In an effort to make manufacturing a larger percentage of its GDP (its now at 16%) and employ 100 million people, the government of India announced last week that it will cut regulatory burdens, create manufacturing zones and promote green technologies.
Will this cause more U.S. companies to set up shop in India? Probably, say Paul. "If the cumbersome process of setting up a business is reduced by eliminating bureaucracy coupled with an inflow of investment, then you will see companies more aggressively moving into the Indian market."
"You can look at this new national policy as both a threat to the U.S. and an opportunity. India has a growing middle class and manufacturing for that market is a sound strategy. The threat is that the U.S. does not have its own national policy," explains Paul.
India's industrial sector is not as advanced as China's, says Paul, but they have the ability to become very strong. One particular advantage is a large supply of innovative engineers. "However at this time they don't have the robust manufacturing culture that we have in the U.S."
What that means is that the U.S. must act now and put in place a National Manufacturing Policy, says Paul. The Alliance has laid out a detailed plan for an industrial policy.
"What gives me hope is that there is a groundswell of discussion that is coming not only from politicians but from academia and think tanks as well. Thought leaders are focusing on innovation in manufacturing. Everyone is now in agreement that in order to be economically secure the U.S. has to have a strong manufacturing base."
