‘Talent-driven innovation could be a key differentiator’

Deloitte’s Michelle Drew Rodriguez on why the U.S. is poised to lead manufacturing again.


Michelle Drew Rodriguez, manufacturing leader for Deloitte Services LP's Center for Industry Insights. Courtesy: Deloitte Services LP's Center for Industry InsightsThe United States is expected to become the most competitive manufacturing nation over the next five years, with the current leader China sliding into second position, according to the 2016 Global Manufacturing Competitiveness Index report from the U.S. Council on Competitiveness and Deloitte's Global Consumer & Industrial Products Industry group.

"The 2016 Global Manufacturing Competitiveness Index shows the importance of policy, investment, and innovation for company and country-level competitiveness," said Deborah L. Wince-Smith, president and CEO of the U.S. Council on Competitiveness. "Its findings help companies shape their business strategies in order to compete successfully, and create jobs."

Michelle Drew Rodriguez, manufacturing leader for Deloitte Services LP's Center for Industry Insights, discussed the findings of the Advanced Technologies Initiative: Manufacturing & Innovation report and Deloitte's view of manufacturing heading into 2016.

CFE: It's a long time until 2020. What could keep the U.S. from achieving this top competitiveness ranking between now and then?

Rodriguez: A new global competitive environment is presenting America's leadership with fresh and persistent challenges. While we are seeing positive movements like strong demand from global markets, more cost-competitive energy prices, a fading labor rate arbitrage, and significant growth through innovation, there are still a number of areas that executives cite as challenges. Things like a significant talent shortage, the widening skills gap, as well as the high cost and complexity of compliance in an uncertain U.S. regulatory system all present unique hurdles in achieving the top ranking.

CFE: In a global manufacturing economy, where should the U.S. focus its attention as it looks to continue to grow?

Rodriguez: It's simple: talent and innovation. Talent-driven innovation could be a key differentiator going forward as manufacturers shift to higher-value advanced manufacturing. This could aid in creating premium products, processes, and services that capture higher margins and help sustain a competitive advantage. And to continuously innovate and grow, companies will likely need to compete for the best and brightest minds around the globe.

CFE: While technology is a huge driver for competitiveness, so is talent. What should the U.S. be doing to bring more manufacturing talent into the pipeline?

Rodriguez: A strong manufacturing industry is fundamentally vital to the prosperity of a nation. Therefore, we should do more to attract, recruit, and retain the highest caliber of talent to work in manufacturing. But in the U.S., manufacturing still faces a perception issue.

As a nation, we should raise awareness and visibility that this is no longer your grandfather's factory. We need to help students understand the breadth of high-tech, high-skill, and high-paying jobs manufacturing offers. For the past several years, Deloitte has been a key sponsor of efforts such as Manufacturing Day, a standing date when manufacturers open their doors and showcase innovative approaches to pushing scientific advances like self-driving cars, renewable energy sources, and molecular-level products. We should open the eyes of up-and-coming talent to the wealth of amazing possibilities within manufacturing.

CFE: Given the globalization of manufacturing, is "Made in the USA" still a viable idea?

Rodriguez: Absolutely. Now, probably more than ever, the strength and vitality of our U.S. manufacturing industry, coupled with our innovative ecosystem and entrepreneurial drive, positions us well to design and build the next generation of products here in America; products that will serve the global market. It's truly an exciting time and place to be in manufacturing.

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Before the calendar turned, 2016 already had the makings of a pivotal year for manufacturing, and for the world.

There were the big events for the year, including the United States as Partner Country at Hannover Messe in April and the 2016 International Manufacturing Technology Show in Chicago in September. There's also the matter of the U.S. presidential elections in November, which promise to shape policy in manufacturing for years to come.

But the year started with global economic turmoil, as a slowdown in Chinese manufacturing triggered a worldwide stock hiccup that sent values plummeting. The continued plunge in world oil prices has resulted in a slowdown in exploration and, by extension, the manufacture of exploration equipment.

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