News Release
« BackReport Finds Manufacturing is Essential for Economic Growth, Recommends Strategies to Create Jobs
Wednesday, January 27, 2010
As U.S. manufacturers struggle to recover from the brutal recession, a new report finds that manufacturing fuels economic prosperity but requires pro-growth policies to create jobs and remain globally competitive. The report, released by the National Association of Manufacturers (NAM) and the Council of Manufacturing Associations (CMA), was written by economists Joel Popkin and Kathryn Kobe.
The report offers a number of specific recommendations to create jobs and enhance U.S. manufacturing innovation, productivity and competitiveness, including the following:
• Reduce the corporate income-tax rate on profits earned from production in the United States to match those of major trading partners.
• Make the R&D tax credit permanent to eliminate one important uncertainty in private decisions to undertake R&D.
• Make the commitments now that will guide private decisions on R&D investment for cleaner energy technologies and more varied energy sources. Findings from that research will help mitigate energy price spikes and make domestic manufacturing production more attractive to both U.S. firms and foreign investors.
• Continue to improve our education quality and accessibility to enhance the pool of science, technology, engineering and math (STEM) graduates and support programs of technical training and certification.
• Assure the health of small businesses. They are niche suppliers of components and parts for finished-goods manufacturers. And they also are important investors in and initiators of high-risk, ground-breaking innovative endeavors.
• Invest in all levels of infrastructure—transportation, communication channels and the energy grid.
“The large U.S. trade deficit is one of the starkest reminders of why a strong, productive and innovative U.S. manufacturing base is essential to our country’s economic future,” said economist Dr. Joel Popkin. “In 2008, U.S. manufacturers produced and exported $918 billion worth of goods to other countries. Those exports helped pay for more than half of our manufactured imports, but indebtedness to foreign countries continues to rise.”
Dr. Popkin cited the erosion of America’s leadership in R&D as another major challenge facing U.S. manufacturers. “The United States is still the leader in the absolute number of dollars spent. Its strong R&D position, however, is being eroded by the impact of the economic downturn and the rapidly expanding R&D programs in other countries. When the data is available, we expect to see the U.S. share of world R&D fell in 2009,” he said.
“America’s future prosperity depends on policies that accelerate and strengthen manufacturing production here in the United States,” noted William E. Gaskin, president of the Precision Metalforming Association and former CMA chair. “To remain strong players in a competitive world, U.S. manufacturers need government policies that encourage continued innovation and productivity gains. In particular, we need policies that encourage public and private investments to enhance productivity, such as those in R&D, capital goods, worker training and early education that nurtures math and science proficiency.”
The new report, “Manufacturing Resurgence – A Must for U.S. Prosperity,” is available at www.nam.org/popkinreport.
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