The State Role in U.S. Manufacturing Revival Presentation at Summer - - PowerPoint PPT Presentation

@ITIFdc The State Role in U.S. Manufacturing Revival

Presentation at Summer NSCL Meeting Boston, MA

• Dr. Robert D. Atkinson

President, ITIF August 7, 2017

@RobAtkinsonITIF

About ITIF

• One of the world’s top science and tech think tanks
• Formulates and promotes policy solutions that accelerate innovation and

boost productivity to spur growth, opportunity, and progress

• Focuses on a host of issues at the intersection of technology innovation

and public policy: – Innovation processes, policy, and metrics – Science policy related to economic growth – E-commerce, e-government, e-voting, e-health – IT and economic productivity – Innovation and trade policy

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Manufacturing Matters to State Economies

3

This

Manufacturing Matters to State Economies

4

Depends

• n That

But U.S. Manufacturing is Not Fully Alive and Well

5

• Real manufacturing

value added grew 2% from 2008 to 2015

• Rest of economy grew

11%

90 95 100 105 110 115 120 125 130 135 Axis Title

Real Value-Added Growth, 2000 = 100

Manufacturing Rest of economy

But U.S. Manufacturing is Not Fully Alive and Well

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• 14 of 19

manufacturing sectors lost output from 2008 to 2015

• 30% -20% -10%

0% 10% 20% 30% 40% 50%

Manufacturing Manufacturing minus computers Primary metals Motor vehicles, bodies and trailers, and… Computer and electronic products Plastics and rubber products Miscellaneous manufacturing Petroleum and coal products Chemical products Other transportation equipment Food and beverage and tobacco products Wood products Machinery Fabricated metal products Nonmetallic mineral products Printing and related support activities Apparel and leather and allied products Paper products Textile mills and textile product mills Electrical equipment, appliances Furniture and related products

Why Did Manufacturing Jobs Go Overseas?

• Aggressive foreign “innovation mercantilism”
• High U.S. corporate tax rate
• Limited industrially relevant R&D
• Poor workforce training
• Limits on export financing
• No manufacturing strategy

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Manufacturing Policy Must Get the 4 “Ts” Right

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Trade Tax Technology Talent

Macro Micro

What Should States Do? Encourage the High Road

There is more than one “production recipe.” The “high road” recipe involves greater use of capital equipment, more reliance on skilled workers and their knowledge, and greater focus on innovation.

– 0.7 correlation between payroll per employee and value-added per employee – 0.6 correlation between payroll and capital expenditures – Firms with higher payroll per employee have more skilled workers.

[Source (Susan Helper and Ryan Noonan, “Taking the High Road: New Data Show Higher Wages May Increase Productivity, Among Other Benefits, U.S. Department of Commerce, Aug 4, 2015)]

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What Should States Do? Support Innovative Skills Programs

– More engineering in high school (e.g., Purdue’s High School

evGrandPrix; FIRST; SkillsUSA; SMU’s Infinity Project; Purdue Polytechnic Charter High School)

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What Should States Do? Support Innovative Skills Programs

– More engineering in high school (e.g., Purdue’s High School

evGrandPrix; FIRST; SkillsUSA; SMU’s Infinity Project; Purdue Polytechnic Charter High School)

– Advan

anced ced M Man anufact acturing g Trai aining g Cen enter ers ( (e.g., e.g., Fran anci cis Tuttle e Tech echnol

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What Should States Do? Support Innovative Skills Programs

– More engineering in high school (e.g., Purdue’s High School

evGrandPrix; FIRST; SkillsUSA; SMU’s Infinity Project; Purdue Polytechnic Charter High School)

– Advanced Manufacturing Training Centers (e.g., Francis Tuttle

Technology Center in Oklahoma City; Learn Work Earn, MN; National Coalition of Certification Centers).

– Univer

ersity p progr

• gram

ams that at em emphas asize e man anufact acturing ( g (e.g., e.g., Hal aley ey Barb rbour C r Cente ter r fo for r Ma Manufa factu turin ring E Excelle llence at t Univ ivers rsity ity o

• f

f Mis Missis issip ippi; i; Georg rgia ia Tech’s Ma Manufa factu turin ring C Cente ter; r; U Univ ivers rsity ity of f Lou

• uisville

e en engi gineer eering C g Co-op

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progr

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am).

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What Should States Do? Support Innovative Skills Programs

– More engineering in high school (e.g., Purdue’s High School evGrandPrix;

FIRST; SkillsUSA; SMU’s Infinity Project; Purdue Polytechnic Charter High School)

– Advanced Manufacturing Training Centers (e.g., Francis Tuttle Technology

Center in Oklahoma City; Learn Work Earn, MN; National Coalition of Certification Centers).

– University programs that emphasize manufacturing (e.g., Haley Barbour Center

for Manufacturing Excellence at University of Mississippi; Georgia Tech’s Manufacturing Center; University of Louisville engineering Co-op program).

– Regio

ional l Sk Skills ills Allia Alliances (e (e.g .g., ., So South thwest V t Virg irgin inia ia Allia Alliance fo for r Man Manufact acturing, g, W Wau auskes kesha a Cou

• unty Man

Manufact acturing g Allian ance [ ce [WI WI]; Manufa factu turin ring Allia Alliance of f Hills illsboro rough Co County ty [F [FL]. ].

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What Should States Do? Skills Are Not Enough

– Ex

Expa pand R nd R&D t tax inc ncent ntives (LA, LA, VA) A).

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What Should States Do? Skills Are Not Enough

– Expand R&D tax incentives (LA, VA). – Creat

eate i e innov

• vat

ation

• n vou
• uch

cher ers ( (e.g., e.g., CT; I ; IA, N , NN, , RI, , TN)

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What Should States Do? Skills Are Not Enough

– Expand R&D tax incentives (LA, VA). – Create innovation vouchers (e.g., CT; IA, NN, RI, TN) – Support ma

rt manufa factu turin ring R&D c cente ters rs at t univ ivers rsitie ities

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What Should States Do? Skills Are Not Enough

– Expand R&D tax incentives (LA, VA). – Create innovation vouchers (e.g., CT; IA, NN, RI, TN) – Support manufacturing R&D centers at universities – CEO

CEO s self-lear earning n g net etwor

• rks

ks.

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What Should States Do? Skills Are Not Enough

– Expand R&D tax incentives (LA, VA). – Create innovation vouchers (e.g., CT; IA, NN, RI, TN) – Support manufacturing R&D centers at universities – CEO self-learning networks. – Fund sta

tate te ma matc tch fo for r th the N NIS IST Ma Manufa factu turin ring E Exte tensio ion Partn rtners rship ip and t nd the he Manuf nufactur uring ng U USA SA pr program a and t nd the he Manuf nufactur uring ng Univ ivers rsitie ities p pro rogra ram. m.

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What Should States Do? Skills Are Not Enough

– Expand R&D tax incentives (LA, VA). – Create innovation vouchers (e.g., CT; IA, NN, RI, TN) – Support manufacturing R&D centers at universities – CEO self-learning networks. – Fund state match for the NIST Manufacturing Extension Partnership and

the Manufacturing USA program and the Manufacturing Universities program.

– Manuf

nufactur uring ng “ “401K 401K-s” ( (CT) CT)

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Relevant ITIF Reports

• “The Myth of America’s Manufacturing Renaissance: The Real

State of U.S. Manufacturing”

• “A Critique of CRS’s ‘U.S. Manufacturing in International

Perspective’”

• “Worse Than the Great Depression: What the Experts Are

Missing About American Manufacturing Decline”

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Thank You!

Robert D. Atkinson | ratkinson@itif.org | @RobAtkinsonITIF

@ITIFdc