Making the U.S. the World’s Best Place for Manufacturing

American BusinessBy Doug Woods
AMT-The Association For Manufacturing Technology

This is an excerpt of an article that originally appeared in Industry Market Trends from ThomasNet News.

No doubt, there are countless reasons to be proud as an American, but the one that makes me most proud is our strong and enduring manufacturing sector.

I started as an apprentice toolmaker in my grandfather’s shop almost 40 years ago and have been in the industry ever since. My life experience as a manufacturer has led to a deep appreciation of the role manufacturing plays in driving the U.S. economy and providing skilled, well-paid jobs for new generations of Americans. That’s why it’s so exciting for me to be at the helm of AMT-The Association For Manufacturing Technology today, at a time when manufacturing technology innovation is opening so many new doors in the global marketplace.

Right now, a number of favorable factors are converging in the U.S. that makes it an attractive place to manufacture. Chief among them is a new abundance of energy thanks to technology innovations that have dramatically increased U.S. energy independence, significantly boosted oil and natural gas production, and lowered the cost of energy to levels not seen in decades. We also have a manufacturing infrastructure in this country that includes some of the best science and technology schools in the world, innovative business models that create endless opportunities for growth, and citizens that embody American ingenuity and entrepreneurial spirit.

These forces have helped boost foreign direct investment in U.S. manufacturing to $848 billion, with a clear upward trend over several decades, according to the Manufacturers Alliance for Productivity and Innovation’s “Manufacturing Facts.” That investment supports millions of American jobs.

For U.S. companies, the appeal of manufacturing close to home is even greater. Business strategies are increasingly focused on total cost when considering whether to onshore or offshore production. In many cases, the benefit of making products nearer to company headquarters, suppliers, and customers outweighs the low cost of labor overseas, especially as labor rates rise.

More and more U.S. manufacturers are shifting toward making “what you want, when you want it, exactly where you want it.” The Industrial Internet (aka “Internet of Things”), machine-to-machine (M2M) protocols such as MTConnect, and technologies such as additive manufacturing have made that concept a reality. U.S. multinational companies are reshoring at a greater rate as well.

With many companies eager to manufacture in the U.S., it’s crucial that we do more to attract this investment (and not do anything to lose it). Washington certainly has a role to play. Manufacturers in the U.S. still face a global playing field that isn’t level thanks to federal tax and regulatory policies, and the negative impact is greatest on U.S. small businesses.

Even the federal government agrees with this assessment. A 2010 report by the U.S. Small Business Administration’s Office of Advocacy found that government regulations represent a disproportionate burden on American small businesses. The U.S. also has the highest corporate tax rate in the industrialized world.

Unfortunately, the federal government still isn’t making any progress on these and other issues impacting U.S. manufacturing competitiveness. Deep philosophical differences are preventing Congress from moving forward on the budget, and we’re facing another government shutdown in the fall when the debt limit is reached. Yet, our elected officials are no closer to ironing out any kind of “grand bargain” than they were at the beginning of the year. Unfortunately, tax and regulatory reform will be on the backburner until our fiscal crises are averted.

Washington could learn a lot from U.S. manufacturing companies. Manufacturers are not waiting for the government to act. They never have, which is why the U.S. is such a strong and vibrant nation today. Instead, manufacturers are creating their own opportunities through collaboration and cooperation with their local schools, governments, and other businesses; they are utilizing every other resource at their disposal. These companies are keeping our economy afloat right now.

I salute American manufacturers for providing the foundation upon which this country is built. They understand what apparently the government does not — that manufacturing strength means good jobs, economic prosperity, and a secure nation and that inaction means missed opportunity. They are the biggest reason that America will continue to be the best place in the world for manufacturing.

Categories: Executive Corner

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