A new Deloitte report says that the decline in the manufacturing industry can be reversed if America encourages innovation, trains workers, addresses tax reform and regulations, and invest in infrastructure and energy. Excuse me?
A new Deloitte report says that the decline in the manufacturing industry can be reversed if America encourages innovation, trains workers, addresses tax reform and regulations, and invest in infrastructure and energy. Excuse me? With all due respect, that’s like saying if the air was breathable on Mars and our bodies could adapt better, and shuttles left daily at 3:00 pm, a colony would open tomorrow.
The report titled Manufacturing Opportunity claims that while low-cost basic manufacturing won’t ever return to its former glory, further decline is not inevitable. Recommendations include refocusing on long-term opportunities in increasingly complex and emerging technologies and in our ability to lead in the innovation and R&D of such breakthroughs. I don’t disagree there.
What touches a nerve for me, and I’d like to know if it also does for you, is that they claim the “pathways to manufacturing growth are both available and achievable.” The report outlines recommendations based on interview with business leaders, academic communities and organized labor. Did anyone call anyone who operates right at the heart of these potential breakthroughs, or that could be responsible for attaining this growth?
Here’s what those interviewed came up with (in their words):
Invest in Research and Development: For America to regain its position as a global leader in manufacturing and revive economic prosperity, it must invest in the research and development needed to produce the advanced technologies used in the manufacturing sector.
Train Tomorrow's Workforce: Advanced training is required to meet the needs of manufacturing jobs. Today there are 600,000 jobs that cannot be filled in America because manufacturers cannot find workers with the right skills. A focus on performance-based education and fostering government-to-industry partnerships, among many other recommendations, can help better prepare new generations of workers.
Reform Taxes and Regulations: Numerous tax policies create a substantial burden for American manufacturers. In 2011, the United States had the highest corporate statutory tax rate among OECD (Organization for Economic Co-operation and Development) nations. It is the only G8 member that does not employ a territorial tax policy. Policymakers in Washington should address corporate tax reform and consider a tax system that positions U.S. businesses to be more competitive globally.
Invest in Infrastructure: Investment in infrastructure is paramount to manufacturing growth. Every dollar of infrastructure spending generates an additional 60 cents in economic activity. China, for example, recently devoted nine percent of its GDP to infrastructure development, while the United States has let much of its infrastructure deteriorate. Improved infrastructure facilitates a healthy manufacturing sector.
Define National Energy Policy: The definition of a national energy policy could ensure the reliability of fuel sources to power the manufacturing sector.
Am I having too much of a knee-jerk reaction to this report? In another life, I worked in the investment industry. It’s typical of those on the investment side to oversimplify steps to recovery and wealth creation based on historical economic swings without a real understanding of what is really operating within the industry they’re discussing. Personally, I’m not of the opinion that what’s happening is based on a typical economic cyclical climate. Where in the above list of suggestions is there any reference to where we are with the national debt, where we are with regulation, leadership (on any side of any aisle), tax incentives for offshoring, or even with our failing educational system. I’d take the perspective of the engineer responsible for such innovation, the opinion of those running the major technology companies able to do the investment, and those in charge of university R&D that is begging to be capitalized, over the view/opinions or the dictates of the “Street” any day.
Okay, I’m on a rant, but I’d really like your input on this. Maybe I didn’t have enough coffee this morning—or maybe you can add some perspective or wisdom that might calm me down…