Industry executives: Innovation the key to recovery
A federal strategy and support is critical if American manufacturers are to thrive in the post-recession global economy, leading U.S. manufacturing experts said recently.
“U.S. manufacturers absolutely must have innovative energy-efficient and productivity-enhancing technology to be competitive,” Keith Nosbusch, Rockwell Automation, Inc. chairman and CEO, told a press briefing at the National Press Club.
This transformation to smarter, safer and more sustainable manufacturing provides an opportunity for the federal government to help develop and make innovations in American plants to keep them competitive and to promote a sustainable U.S. manufacturing employment base, the speakers said.
“We all are pleased that President Obama has named a manufacturing czar to coordinate federal policy and programs to help U.S. manufacturers,” Nosbusch said. “Up until 1990, federal support for applied research %%MDASSML%% which is most critical for manufacturing %%MDASSML%% was equal to federal funding for basic science. But today it is about 30% lower with nearly a $10 billion gap that needs to be remedied.
“Congress also needs to expand federal tax credits to apply to investments in smart, safe and more sustainable manufacturing technologies,” Nosbusch continued.
“U.S. industry is in a battle %%MDASSML%% not just with countries with lower costs %%MDASSML%% but also with developed countries that are investing in new technology, said Emily DeRocco, president of the Manufacturing Institute and vice president of the National Association of Manufacturers.
“With high quality, inexpensive products flooding the market from every corner of the globe, competing on cost alone is a losing battle for most U.S.-based manufacturers,” DeRocco said.
The cost of manufacturing in the United States is nearly 18% higher than in America’s nine largest trading partners, she said. That puts the 13.8 million manufacturing jobs in the United States at risk.
The European Union already has allocated about $2 billion to encourage its manufacturers to invest in the next generation of technology for energy efficiency and productivity.
“To stay in the game, American companies must differentiate themselves through innovation,” DeRocco said. “Only those countries that invest in innovation and a highly skilled workforce will stay competitive.”
“Most energy efficiency has come from implementation of new technology,” said R. Neal Elliott, associate director of Research at the American Council for an Energy-Efficient Economy.
“We estimate that two-thirds of energy efficiency gained in the past 20 years has come from the application of sensors and controls,” Elliott said. “We can reduce manufacturing energy intensity by more than half in the next 20 years as we begin to integrate smart technology %%MDASSML%% not just into equipment, but into entire manufacturing systems, plants and ultimately into the entire supply chains,” Nosbusch said.
“These innovations have a number of advantages,” said Evan R. Gaddis, president and CEO of the National Electrical Manufacturers Association (NEMA).
“Not only do these technologies provide great efficiency gains, but they also reduce carbon emissions, move our country one step closer to energy independence and also make other sectors using these energy-efficient technologies more productive,” Gaddis said.
“Federal policy needs to support three things: research, a level playing field for trade and a tax and regulatory environment that spurs innovation,” said Thomas J. Duesterberg, president and CEO of the Manufacturers Alliance/MAPI.
“It is high time for Washington to recognize that the policy environment matters to the ability of manufacturers to compete successfully in our globalized economy,” Duesterberg continued. “’Smart, Safe and Sustainable Manufacturing’ is not a slogan. It’s a blueprint for success in the world economy and improving our standards of living.”
While billions of federal dollars are going toward retooling the auto industry, little has been earmarked to provide a “greenprint” to stimulate the same kind of transformation toward smart, safe and sustainable manufacturing, the manufacturing leaders said at the briefing.
During the briefing, the speakers recommended these five federal actions for achieving a sustainable recovery in manufacturing:
Ensure legislative priorities are in line with those of manufacturers and the general public
Double federal funding for manufacturing innovation
Establish a $2 billion public-private partnership program to research and develop a manufacturing “greenprint” for smart, safe and sustainable manufacturing
Provide federal assistance for public-private partnerships to create demonstration projects that foster manufacturing innovation
Expand federal tax credits to apply to investments in advanced technologies that automate and modernize factories.