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What’s Next for U.S. Manufacturing Under Trump? The Lobbying Intensifies…

Posted By Paul Tate, December 13, 2016 at 12:46 PM, in Category: Manufacturing Leadership Council

American-Manufacturing-Industry-e1446065999693.jpgWith just over a month to go before the inauguration of President-elect Donald Trump, things are heating up amongst a host of eager advisors to the new administration about how it should improve and stimulate the future of U.S. manufacturing.

There’s certainly no shortage of ideas out there. The problem for the incoming Trump team is going to be which ones to choose.

Last week, for example, the National Association of Manufacturers (NAM) hosted meetings with both Vice President-elect Mike Pence and a Trump transition team to discuss ways of helping to support and grow manufacturing jobs in America. 

“Manufacturers are raring to go to help the incoming Trump Administration change laws and regulations to enable business to grow and create better paying jobs for Americans,” said Jay Timmons, NAM’s President and CEO, in a statement. 

NAM executives stressed the recommendations contained in its previously-published Competing To Win’ policy agenda which covers an 11-point plan of action ranging from tax and trade issues, to labor and research, innovation and technology.

“Keeping America strong means strengthening manufacturing in America, and that requires responding to the many challenges we face,” states the report. “They are difficult, but not insurmountable,”

But NAM’s not the only one with a strong set of recommendations for the incoming Trump team. (For the latest developments, join our special Manufacturing Leadership Council Panel Debate on the Tump Administration’s Impact on Manufacturing on Wednesday, January 11, at 11am ET. For more details and a link to request your invitation - click here.)

At the end of last month, the Information Technology and Innovation Foundation (ITIF) think tank in Washington published its own report on how it sees the manufacturing industry’s top priorities for the new Trump administration.

Called ‘A Policymaker’s Guide to Smart Manufacturing’ , the document looks at some of the national manufacturing initiatives around the world – including Germany, Europe and China – and spells out a set of actions the new U.S. administration should make to boost America’s own smart manufacturing capabilities.

“The digitalization of manufacturing will transform how products are designed, fabricated, used, operated, and serviced post-sale, as much as it will transform the operations, processes, and energy footprint of factories and the management of manufacturing supply chains. It will also change the global landscape of manufacturing competition, potentially reducing the relative advantage of low-cost regions,” predicts the report’s author, Stephen Ezell, Vice President of Innovation at ITIF.

The 15 specific policy recommendations in the ITIF report include:

-                   Allocating funds to expand the current network of nine Manufacturing Innovation Institutes to the planned 45;

-                   Provide stronger tax incentives for investments in new machinery and equipment;

-                   Passing the Manufacturing Universities Act to create a core of at least 20 leading manufacturing universities;

-                   Funding a pilot program that would integrate the maker movement and makerspaces into high schools;

-                   Recognizing that trade agreements such as the Transpacific Partnership Agreement (TPP) and Trade in Services Agreement (TiSA) contain vital provisions that preclude partner nations from introducing barriers to cross-border data flows that could significantly impede the potential of smart manufacturing.

“If the United States wishes to remain a leading smart manufacturing economy”, the report concludes, “policymakers must implement robust, proactive, and coordinated public policies that support America’s manufacturing sector in general and its ability to leverage smart manufacturing techniques in particular.”

But not everyone’s convinced that such wide-reaching, top-to-bottom, industrial solutions are actually going to make a significant difference to the future of smart manufacturing in the U.S.

John A. Bernaden, for example, cofounder and past vice chairman of the U.S.-based Smart Manufacturing Leadership Coalition itself, believes the real transformational opportunity for the future of industrial America lies not simply with the cash-rich corporates, or with the many small two-person family firms across the country, but with the nation’s 35,000 or so midsized manufacturing enterprises with revenues between $10 million to $500 million.

This under-served and under-appreciated American ‘Mittelstand’, as it’s called in Germany, is “ideally suited to be the engine of our economy”, he argues.

His proposed ‘U.S. Manufacturing Stimulus Act of 2017’ recommends the repatriation of $2-$3 trillion of corporate funds currently held abroad to be converted into 20-year USA Industrial Bonds that would then fund interest-free loans for individual states to build 2,000-3,000 highly-automated, super-productive smart plants across the country.

“This may be the biggest choice of Trump’s Presidency,” continues Bernaden. “Does he allow this once-in-a-lifetime tsunami of between $2 trillion to $3 trillion make Wall Street richer with wealth that they can then use to restructure and destroy what’s left of America’s midsize manufacturers?”

“Or does Trump give America’s midsize manufacturers a huge cash infusion – a direct shot in the arm – with $2 trillion to $3 trillion in 20-year loans to construct 2,000 to 3,000 new smart factories that will be a stimulus for manufacturing and the service economy by creating 16 million jobs?”

As the countdown to inauguration ticks away, there are likely to be many more voices raised with potentially game-changing ideas for the new Trump administration to consider as it crafts an industrial policy for the future of U.S. manufacturing starting in 2017.

How many of these ideas will be adopted is still open to question and there will inevitably be conflict and disagreement among many of them.

But one thing’s for sure, whatever your political leanings, there’s plenty of options to choose from. 

Written by Paul Tate

Paul Tate is Research Director and Executive Editor with Frost & Sullivan's Manufacturing Leadership Council. He also directs the Manufacturing Leadership Council's Board of Governors, the Council's annual Critical Issues Agenda, and the Manufacturing Leadership Research Panel. Follow us on Twitter: @MfgExecutive

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