The Economy & You #49: Elements of Manufacturing Competitiveness
Manufacturing or the process of “making things” is critical in keeping our nation competitive. Manufacturing helps to promote innovation, knowledge creation and economic prosperity. Think about this, when we create products through advanced manufacturing techniques, we are supporting basic and higher education through knowledge creation and innovation. We are supporting economic prosperity through business development, intellectual property development and job creation. Therefore, the future of manufacturing will depend on our nation focusing its efforts on the development of talent, continuous innovation, stable and affordable energy, and government policies that help to encourage and support manufacturing.
In a previous article I wrote about a report from Deloitte that examines the challenges faced by American manufacturing. In that report, Deloitte identified what it labeled as the elements of competitiveness that are required for manufacturing to prosper in the future.
Human capital is identified as the critical factor for companies and countries to prosper. Manufacturing jobs need workers with the necessary skills to perform those jobs. As stated in my previous article, over 600,000 jobs in the U.S. alone cannot be filled because there is a shortage in job skills. Developed nations will not be able to prosper and emerging economies will be unable to grow with more skilled workers. Because of this, access to this human capital will become more important and more competitive. Companies that can recruit, retain and develop their high skilled workers will be more likely to be successful.
Similarly, innovation will be an important factor to future prosperity. The ability of companies to stay ahead of the competition will allow them to continue to expand, improve market share and increase profits. This in turn will grow national GDP (gross domestic product) and strengthen the manufacturing sector. The ability to address new and complex problems with innovative ideas is what will drive the future of manufacturing.
As developing nations continue to increase in population as they industrialize, the demand for energy will only rise. The demands for affordable and reliable energy sources will be major concerns to manufacturers who depend on energy make their products. The increased demand will force companies and countries to engineer new ways to manufacturer products in a more sustainable and energy-efficient manner. Environmental concerns will cause many companies to take a global approach to how and where it manufactures its products. While the United States is experiencing somewhat of an energy renaissance, companies will need to work together with policy makers to address the various issues that results from the need for energy.
Tying all of these elements together is the need for a clear and coherent set of government policies that support the manufacturing industry. Government and business must work together to identify those issues that will help the U.S. to grow and prosper. Because we are in a world economy that has become more interdependent and more complex, government must work to address a number of trade, education, and financial policy issues that will best serve our manufacturing sector and our national economy. While government has a more direct role in some policy areas, especially in the areas of taxes, trade and regulation, government can play a role in all of the areas that can help to keep U.S. manufacturing competitive.
Government and manufacturers must collaborate to create national policies that help to determine the role for each and help to ensure that American manufacturing rebounds and returns to its prominent position in our national economy.
- The Economy & You #42: The Future of the U.S. Economy – My view (Part II) (wistatetreasury.wordpress.com)
- How Britain can make more ‘things’ | Jürgen Maier (guardian.co.uk)
- New World Coming: America’s Manufacturing Rebound (monstersabroad.wordpress.com)