Brookings Argues Manufacturing is Vital to Economy

A June 2014 report issued by the White House explored the growth of manufacturing in the United States since 2010 and proposed methods for encouraging continued growth in the manufacturing sector. This document was the focus of the 2014 John White, Jr. Forum on Public Policy at the Brookings Institution. The forum focused on the importance of manufacturing to the U.S. economy and the importance of regional manufacturing hubs for supporting continued growth.

As of June 2014, manufacturing accounted for 12 percent of the U.S. economic base, but its importance to the overall economy reaches beyond this, Brookings argues that a strong manufacturing base is important for continued American innovation. Without local manufacturing facilities, new innovations are difficult to test. Contemporary consumers expect quick product turnaround to match the pace of technological advancements. Lengthy waits between the stages of research and development keep manufacturers from meeting current consumer needs. The continued growth of manufacturing throughout the country provides innovators with local facilities to create prototypes using the latest manufacturing technology, which in turn fuels further manufacturing growth.

Regional manufacturing hubs are part of an economic development plan proposed by President Barack Obama to drive the growth of manufacturing. Chicago, Detroit, Raleigh and Youngstown have been designated the initial hubs. In these areas, there is increased investment in education, including secondary schools, trade schools, community colleges and universities, to develop a workforce that is ready to meet the needs of modern manufacturing facilities. Research and development teams cooperate between hubs to work together to share new ideas and manufacturing methods. Experts at the Brookings forum proposed increased government funding and support for new hubs to encourage more growth of manufacturing throughout the country.

Another connection between U.S. manufacturing and the national economy is the manufacturing supply chain. When manufacturing enterprises move out of the country, job losses stretch across the supply chain. This includes those working in educational facilities to train manufacturing employees, industries that supply raw materials to factories, support personnel at every level of the manufacturing process, and people involved in the design and testing process for both new products and new manufacturing methods. When factories reshore, job growth occurs in all these areas. As each level of the supply chain expands in response to increased need, it fuels growth in other areas to create a cycle of expanding job growth. This extension of the growth of manufacturing into so many areas makes a strong manufacturing industry vital to a strong economy.

Industry experts assert the connection between a strong manufacturing sector and a strong national economy. Expect further government support for the growth of manufacturing, including tax incentives, increased investment in new manufacturing processes, research into supply-chain identification and development and support for educational programs with an emphasis on manufacturing. Growth in the industrial economic base spurs growth in the national economy.

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