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The Case for a National Manufacturing Strategy
The Case for a National Manufacturing Strategy
The Case for a National Manufacturing Strategy
The Case for a National Manufacturing Strategy
The Case for a National Manufacturing Strategy
The Case for a National Manufacturing Strategy
The Case for a National Manufacturing Strategy
The Case for a National Manufacturing Strategy
The Case for a National Manufacturing Strategy
The Case for a National Manufacturing Strategy
The Case for a National Manufacturing Strategy
The Case for a National Manufacturing Strategy
The Case for a National Manufacturing Strategy
The Case for a National Manufacturing Strategy
The Case for a National Manufacturing Strategy
The Case for a National Manufacturing Strategy
The Case for a National Manufacturing Strategy
The Case for a National Manufacturing Strategy
The Case for a National Manufacturing Strategy
The Case for a National Manufacturing Strategy
The Case for a National Manufacturing Strategy
The Case for a National Manufacturing Strategy
The Case for a National Manufacturing Strategy
The Case for a National Manufacturing Strategy
The Case for a National Manufacturing Strategy
The Case for a National Manufacturing Strategy
The Case for a National Manufacturing Strategy
The Case for a National Manufacturing Strategy
The Case for a National Manufacturing Strategy
The Case for a National Manufacturing Strategy
The Case for a National Manufacturing Strategy
The Case for a National Manufacturing Strategy
The Case for a National Manufacturing Strategy
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The Case for a National Manufacturing Strategy

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U.S. manufacturing is in crisis, with almost 6 million jobs lost and 42,000 factories closed over the last decade. Even worse, we are losing know-how and ultimately control over our future. While the …

U.S. manufacturing is in crisis, with almost 6 million jobs lost and 42,000 factories closed over the last decade. Even worse, we are losing know-how and ultimately control over our future. While the U.S. retains important strengths, U.S. manufacturing competitiveness is slipping rapidly. There is no reason to resign ourselves to defeat or to sugarcoat the challenges we face. We possess the tools, talent, and resources to revive manufacturing. But to do so we need a national strategy for manufacturing renewal. This report explains the five key reasons why we need to act quickly and boldly to revitalize our manufacturing sector.

Published in: Economy & Finance, Technology
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  • 1. April 26, 2011The Case for a National ManufacturingStrategyPresenters:Dr. Robert D. Atkinson, President, ITIFStephen J. Ezell, Senior Analyst, ITIFRespondents:Mark Rice, President, Maritime Applied Physics CorporationRo Khanna, Deputy Assistant Secretary, International Trade Admin.Aric Newhouse, Senior Vice President, National Association of Manufacturers
  • 2. Today’s Presentation1  The State of U.S. Manufacturing2  Why Manufacturing is Important3  Why We Need a National Manufacturing Strategy4  Outlines of a Strategy 2
  • 3. U.S. Manufacturing: The Agriculture Story?
  • 4. U.S. Manufacturing: Or the Rust Belt Story? Flickr: Aphex Twin
  • 5. Overall Manufacturing Grew Slower than GDP500% Percentage Change in Real Value Added, 2000-2009400%300%200%100% +15% +5% 0% Total manufacturing GDP-100%-200%-300%-400% Source: Bureau of Economic Analysis
  • 6. And Most Manufacturing Sectors Shrank500% Percentage Change in Real Value Added, 2000-2009 Food, beverage and tobacco products400% Electrical equipment and appliances Chemical products Machinery Printing300% 15 of 19 Wood products Motor vehicles manufacturing Fabricated metal products sectors shrank Paper Products200% Primary Metals Nonmetallic mineral products Plastics and rubber products Apparel and leather100% Textiles Furniture 0% Total manufacturing-100%-200%-300%-400% Source: Bureau of Economic Analysis
  • 7. Only Four Sectors Grew500% Percentage Change in Real Value Added, 2000-2009400%300% Computer and electronic products:200% +260.5% Average share of Petroleum and coal manufacturing output100% products: +73.0% in 2000: 79% 0% Total manufacturing-100% Average share of manufacturing output in 2000: 21%-200%-300%-400% Source: Bureau of Economic Analysis
  • 8. Real Manufacturing Value-Added As Share of GDP14.0%12.0%10.0%8.0% Manuf6.0%4.0%2.0%0.0% 1987 88 89 1990 91 92 93 94 95 96 97 98 99 2000 01 02 03 04 05 06 07 08 2009 Source: Bureau of Economic Analysis 8
  • 9. Real Manufacturing Value-Added As Share of GDP14.0%12.0%10.0%8.0% Manuf6.0% Nondurables4.0%2.0%0.0% Source: Bureau of Economic Analysis 9
  • 10. Real Manufacturing Value-Added As Share of GDP14.0%12.0%10.0%8.0% Manuf Durables6.0% Nondurables4.0%2.0%0.0% Source: Bureau of Economic Analysis 10
  • 11. Real Manufacturing Value-Added As Share of GDP14.0%12.0%10.0%8.0% Manuf Durables6.0% Nondurables Computers4.0%2.0%0.0% Source: Bureau of Economic Analysis 11
  • 12. Real Manufacturing Value-Added As Share of GDP14.0%12.0%10.0%8.0% Manuf Durables Durables - computers6.0% Nondurables Computers4.0%2.0%0.0% Source: Bureau of Economic Analysis 12
  • 13. Real Manufacturing Value-Added As Share of GDP14.0%12.0%10.0%8.0% Manuf Manuf - computers Durables6.0% Durables - computers Nondurables Computers4.0%2.0%0.0% Source: Bureau of Economic Analysis 13
  • 14. Capital Stock For Many Manufacturing Sectors Has Fallen Year of Peak Capital Stock and Percentage Decline Since Food,Primary Wood Apparel and Paper Electrical Plastics and beverage andmetals Textiles products leather products equipment rubber tobacco Motor vehicles 1981 1997 2000 2001 2002 2002 2002 2002 2003 -2% -3% -6% -5% -7% -14% -21% -27% -29% Source: Bureau of Economic Analysis
  • 15. Overall Growth in Manufacturing Assets Has Stalled Percentage Change in Fixed Asset Investment, by Decade400%350%300% Manufacturing250% Total private fixed assets200%150% Performing arts and spectator sports100%50% Funds, trusts, and other financial vehicles 0%-50% 1959-1969 1969-1979 1979-1989 1989-1999 1999-2009 Source: Bureau of Economic Analysis
  • 16. Falling Behind Growth in Total Private Fixed Assets Percentage Change in Fixed Asset Investment, by Decade400%350%300% Manufacturing250% Total private fixed assets200%150% Performing arts and spectator sports100%50% Funds, trusts, and other financial vehicles 0%-50% 1959-1969 1969-1979 1979-1989 1989-1999 1999-2009 Source: Bureau of Economic Analysis
  • 17. As U.S. Moved from a Manufacturing to a Financial Engineering Economy Percentage Change in Fixed Asset Investment, by Decade400%350%300% Manufacturing250% Total private fixed assets200%150% Performing arts and spectator sports100%50% Funds, trusts, and other financial vehicles 0%-50% 1959-1969 1969-1979 1979-1989 1989-1999 1999-2009 Source: Bureau of Economic Analysis
  • 18. Today’s Presentation1  The State of U.S. Manufacturing2  Why Manufacturing is Important3  Why We Need a National Manufacturing Strategy4  Outlines of a Strategy 18
  • 19. Why is Manufacturing Important?1. Robust manufacturing sector needed to close the trade deficit. Export Growth Required to Close Trade Deficit 25.0% 20.0% 15.0% 10.0% 5.0% 0.0% Services Exports Non-manufactured Goods Manufacturing Exports Exports Compound Annual Growth Rate, 2000-2010 Compound Annual Growth Rate to Close Trade Deficit, 2010-2019 
  • 20. Why is Manufacturing Important?2. Manufacturing is a key source of employment and good jobs. Employment Multipliers by Industry 18.0 16.0 14.0 12.0 10.0 8.0 6.0 4.0 2.0 0.0 
  • 21. Why is Manufacturing Important?3. Manufacturing is a key source of R&D and innovation activity. Percent of Companies Reporting Innovation by Industry 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% Product Innovation Process Innovation 
  • 22. Why is Manufacturing Important?4. Manufacturing and services are inseparable and complementary. 
  • 23. Why is Manufacturing Important?5. Manufacturing is vital to U.S. national security. 
  • 24. Today’s Presentation1  The State of U.S. Manufacturing2  Why Manufacturing is Important3  Why We Need a National Manufacturing Strategy4  Outlines of a Strategy 24
  • 25. Why We Need a Manufacturing Strategy1. Other countries have manufacturing strategies. 
  • 26. Why We Need a Manufacturing Strategy2. Systemic market failures affect manufacturing activity. 
  • 27. Why We Need a Manufacturing Strategy3. Unlikely to get back key mfg. sectors once their lost. 
  • 28. Today’s Presentation1  The State of U.S. Manufacturing2  Why Manufacturing is Important3  Why We Need a National Manufacturing Strategy4  Outlines of a Strategy 28
  • 29. What Should Washington Do? 
  • 30. Start Looking out for Number 6 
  • 31. Getting the 4 T’s Right Tech Talent Flickr: marzzelo Trade Tax Flickr: Nedral Flickr: Alan Miles NYC
  • 32. Getting the 4 T’s Right Supported by a National Innovation and Competitiveness Strategy
  • 33. Thank YouRobert Atkinson Stephen Ezellratkinson@itif.org sezell@itif.org Follow ITIF: Facebook: facebook.com/innovationpolicy Blog: www.innovationpolicy.org YouTube: www.youtube.com/user/techpolicy Website: www.itif.org Twitter: @robatkinsonitif

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