US Manufacturing: The Misunderstood Economic Powerhouse
By Steve Minter, Industry Week
Leaders such as Alcoa CEO Klaus Kleinfeld say manufacturing, considered all but dead by some pundits, is on the cusp of ‘something big.’
With 6 million jobs lost in the last decade, U.S. manufacturing bore the brunt of globalization and recession, not to mention a widespread belief that its day had simply passed. But panelists at a Brookings Institution conference said there are good reasons to expect a resurgence of U.S. manufacturing if it is supported by smart public policies and public-private programs.
“We still think about manufacturing in the U.S. as yesterday’s economy as opposed to the vanguard of innovation in our economy,” said Bruce Katz, a vice president at the Brookings Institution. But he points out, manufacturing accounts for “9% of jobs, 11% of GDP, 35% of engineers, 68% of private R&D, and 90% of our patents. We may be the only economy to decouple production and innovation.”
At the Brookings event, titled “Fostering Growth Through Innovation,” Katz noted that a series of developments — rising wages in China, shale gas, the beginning of reshoring and disruptive technologies such as 3D printing — offer the promise that U.S. manufacturing is at the “beginning of something big.”
Klaus Kleinfeld, chairman and CEO of Alcoa (IW 500/48), cited as evidence the surprising resurgence of the automotive industry, with projections that production levels will reach pre-recession levels this year. He said CAFE standards played an important role in promoting innovation as manufacturers looked for ways to make vehicles lighter. Kleinfeld said discoveries of shale oil and gas are “gifts” to the U.S. economy that are so big and have “so many implications that we are just starting to understand what that means.”
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