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

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 @ITIFdc

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 2

Manufacturing Matters to State Economies This 3

Manufacturing Matters to State Economies Depends on That 4

But U.S. Manufacturing is Not Fully Alive and Well Real Value-Added Growth, 2000 = 100  Real manufacturing 135 value added grew 2% 130 from 2008 to 2015 125 120 Axis Title 115  Rest of economy grew 110 11% 105 100 95 90 Manufacturing Rest of economy 5

But U.S. Manufacturing is Not Fully Alive and Well -30% -20% -10% 0% 10% 20% 30% 40% 50% Manufacturing  14 of 19 Manufacturing minus computers Primary metals manufacturing Motor vehicles, bodies and trailers, and… Computer and electronic products sectors lost output Plastics and rubber products Miscellaneous manufacturing from 2008 to 2015 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 6

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 7

Manufacturing Policy Must Get the 4 “Ts” Right Trade Tax Macro Technology Talent Micro 8

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)] 9

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) 10

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 ology ogy C Cen enter er in O Okl klah ahom oma C a City; ; Lear earn W Wor ork k Ear arn, , MN; ; Nat ation onal al Coalitio lition o of C f Certific rtificatio tion C Cente ters rs). ). 11

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 ogram 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 of 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 ouisville e en engi gineer eering C g Co-op op p progr ogram am). 12

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 ounty 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]. ]. 13

What Should States Do? Skills Are Not Enough – Ex Expa pand R nd R&D t tax inc ncent ntives (LA, LA, VA) A). 14

What Should States Do? Skills Are Not Enough – Expand R&D tax incentives (LA, VA). – Creat eate i e innov ovat ation on vou ouch cher ers ( (e.g., e.g., CT; I ; IA, N , NN, , RI, , TN) 15

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 16

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 orks ks. 17

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. 18

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) 19

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” 20

Thank You! Robert D. Atkinson | ratkinson@itif.org | @RobAtkinsonITIF @ITIFdc