Manufacturing for Growth: United States has been saved
Manufacturing for Growth: United States
Opportunity in the Land Of Uncertainty
Although recognized as one the world's leading manufacturing nations for much of the 20th century, the United States has witnessed a rapid paradigm shift in the 21st century, the United States has witnessed a rapid paradigm shift in the 21st century, with its dominance challenged in nearly every area of manufacturing competitiveness, from research and development to shop floor process technology and worker productivity. A slow and steady decline of manufacturing's contribution to the US economy over the past 25 years has begun to challenge the prosperity of its middle class as well as it long-held status as a global manufacturing and innovation leader. The decline was in part self-inflicted and in part the consequence of rapid globalization – and of the rise of significant competitors in Asia.
Still considered one of the most competitive nations today, the United States is expected to increasingly be challenged by emerging economy nations over the next decade as those countries rapidly build their manufacturing capabilities. Until recently, much of the real issue for the U.S. has been the philosophical debate on whether or not manufacturing even mattered to America's economic prosperity, as its capabilities and middle class jobs drifted away. More recently, however, U.S. policy-makers, educators, and business leaders have taken a renewed interest in – and developed a deeper appreciation for – the important linkage between manufacturing, innovation, economic growth, and high paying middle class jobs. The real questions now before American leaders are these: Is it too little too late? If not, what is the path forward?
CEO Policy Recommendations
Executives believed that the following set of recommendations would enable United States pursuit of more advanced manufacturing capabilities
- Develop globally competitive corporate tax rates and institute widespread tax reforms that provide long-term clarity and stability on overall corporate tax policies to promote investment in the United States and strengthen competitiveness
- Decrease the cost of repatriating earnings – either by creating a territorial tax policy or by minimizing the payback difference between foreign and U.S. tax rates
- Enhance and make permanent R&D tax incentives in an effort to remove uncertainty from making long-term investments in research and development
- Lower corporate tax rates broadly and place the U.S. in a more competitive position relative to other nations
- Create a comprehensive energy policy that encourages reinvestment in the US energy infrastructure, pursues energy efficiency and conservation, and balances investment across a diverse portfolio of current energy assets, such as shale gas, coal and offshore oil, while also investing wisely and responsibly in alternative energy sources including solar, wind and nuclear
- Develop energy policies that support ongoing public and private investment into shale gas research and development, thereby creating opportunities for the United States to retain its leadership position and serve as a catalyst for job creation
- Encourage the use of cleaner and abundant fuels such as natural gas to facilitate the transition away from the use of oil and coal
- Modernize the U.S. electric grid to grow capacity, improve reliability, and integrate alternative energy sources as they develop
- Moderate near-term government investments in alternative energy and the creation of artificial, high cost, and unsustainable markets
- Develop energy policies that support the competitive advantage and head start the United States has in the area of shale gas production
- Develop a new trade promotion and fast-track authority to quickly establish bilateral or regional free trade agreements with rapidly growing nations that are fair and equitable, while also ensuring U.S. rights under existing trade agreements are enforced
- Ensure U.S. rights under existing trade agreements are enforced and aggressively confront obstructions to market access, currency manipulation, violations to intellectual property rights, and unfair labour practices
- Build a comprehensive U.S.-European Union trade and investment agreement
- Pass permanent trade promotion authority
- Work toward a market-based exchange rate with major trading partners
- Expand export-promotion assistance to manufacturers and ensure that competitive finance is available
- Create programs that quickly establish free trade agreements that are fair and equitable, and attack discriminatory policies imposed by other nations
- Adopt policies that allow the top students from other countries educated in U.S. universities to remain in the United States upon graduation and enter the U.S. workforce
- Change the focus of immigration reform discussions and craft policy that creates opportunities for talent born outside the United States to become an integral part of the U.S. workforce
- Build government-industry partnerships that encourage students to pursue careers in science, engineering and manufacturing
- Adopt more stringent and consistent standards for STEM disciplines throughout the entire educational system in the United States, including developing educators who are subject matter experts and better able to prepare students for advanced degrees or certifications programs
- Ensure adequate support for a closed-loop feedback process within the manufacturing "ecosystem" to ensure curriculums meet the changing needs of businesses
- Develop education and workforce programs that ensure the United States continues to have access to qualified graduates and other highly skilled workers
- Executives also said Brazil needs adequate public policies and measures that encourage domestic production, not protectionism
- Establish political, legal, and regulatory stability
- Establish a consortium of business, university, labour, and public sector leaders tasked with establishing innovation goals with a 15 to 20-year development horizon. Then collaboratively support those goals with policies, investments, infrastructure, education, and other related programmes.
- Develop a U.S. innovation strategy that establishes programmes to feed an innovation pipeline through full life-cycle commercialization and that supports both basic and applied research.
- Create long-term mechanisms that insulate funding programmes from election cycles and changing administrations.
- Create a system that seeds innovation and helps to avoid multiple "valleys of death" by establishing clear objectives and direction that incentivize the private sector and venture capitalists and are supported by the public sector and include enabling mechanisms to drive innovative ideas and technologies through to commercialization.
- Provide incentives investment in R&D equipment and infrastructure to ensure the U.S. remains an attractive destination for long-term investment in innovation and manufacturing.
- Develop more industry clusters that co-locate research institutions, industry, and the best talent all focused on advancing research to full commercialization
- Create and support programmes that drive America's long-term science, technology, and innovation initiatives
- Create programs that allow for the development of policy in a collaborative manner with business leaders and policy-makers so that policy decisions are evaluated on the basis of global competitiveness and do not result in unforeseen burden or cost.
- Benchmark other countries to better understand the positive and negative consequences policy decisions have on competitiveness.
- Identify opportunities to lower compliance costs by eliminating overlapping policies where multiple agencies have jurisdiction
- Ensure a balanced legal and regulatory environment in the United States that does not place undue burden and costs on manufacturers
- Reduce the deficit by broadly supporting a Simpson-Bowles type approach to tax revenue increases coupled with expenditure reductions and a slowed growth trajectory on entitlements