Improving the US manufacturing environment
The last few years have seen renewed growth for manufacturing in the United States, both in terms of output and as a percentage of the labor force. A PriceWaterhouseCoopers report credits that phenomenon to a growing economy, workforce quality, tax policies, the regulatory environment, and transportation and energy costs.
To see where US manufacturing stood moving forward, Brookings scholar Darrell West and Christian Lansang of Brown University studied how the industry compares to that of other nations. In their report, the develop a global manufacturing scorecard that looks at policies and regulations; taxes; energy, transportation, and health costs; workforce quality; and infrastructure and innovation in 19 countries, including the US.
The top nations in overall manufacturing environment were the United Kingdom and Switzerland (with a score of 78 points out of 100), followed by the US (77), Japan (74), and Canada (74).
China is the top nation in manufacturing output and in the percentage of its total output that generated by manufacturing. Poland has the highest percentage of its workforce employed in manufacturing, followed by Germany, Italy, Turkey, and South Korea.
Recommendations of the report for improving the US manufacturing environment include pursuing a strategy that emphasizes political and economic predictability, and open trade policies. “Developing policies that provide access to global markets and facilitate technology diffusion will help the manufacturing sector,” the report said.
Providing financial incentives to promote innovation, education, and workforce development is another of the report’s recommendations. These include research and development and equipment expensing tax credits and grants and loans to aid domestic manufacturers in the growth of their businesses and their technology innovation.
Other recommendations include: unlocking twenty-first century tools such as big data, automation, and artificial intelligence that can revolutionize manufacturing; helping small firms through technology research and workforce development; encouraging transparency of business practice, including whistleblower protections; and financing physical and digital infrastructures to support business development.
“Physical infrastructure such as roads, bridges, dams, and ports are necessary to connect supply chains as is the deployment of digital infrastructure such as high-speed broadband and mobile technology,” the report concluded. “The creation of adequate infrastructure helps companies operate efficiently and grow over time.”
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