Washington Window


Manufacturing and Engineering in the 21st Century

The manufacturing sector is a key driver of the U.S. economy. In 2004, according to the latest Commerce Department statistics, U.S. manufacturing contributed nearly $1.5 billion to the nation's GDP, 13 percent of the total. Employment in the manufacturing sector totaled nearly 14.3 million people with an average annual wage of $45,916.

Total U.S. exports in 2004 were $817.9 billion led by four dominant sectors: computer and electronic products; transportation equipment; chemicals; and machinery (except electrical). Every $1 in manufactured goods generates an additional $1.43 worth of economic activity and some two-thirds of all private sector R&D is conducted by manufacturers.

Yet, the manufacturing sector engine is in need of a tune-up if it is to continue to fuel U.S. economic and national security. Since 2000, more than three million jobs have been lost in this vital sector.

Still, a recent poll found that some 36 percent of the 3,000 companies interviewed had unfilled jobs due to a lack of qualified applicants. Without a pipeline of skilled workers to replace retiring baby boomers, the manufacturing sector could be facing a shortage of almost 13 million qualified employees by 2020.

Pipeline issues are not the only challenges facing U.S. manufacturers. Competition in a global economy, as well as the costs associated with domestic regulations, also contribute to the manufacturing sector's struggle to retain its place of dominance.

Congress and the current administration have taken steps to address these challenges. The U.S. House of Representatives recently passed legislation, H.R. 250, the Manufacturing Technology Competitiveness Act of 2005 (H.R. 250), introduced by Rep. Vernon Ehlers, R-Mich., to help improve the competitiveness of U.S. manufacturers by providing grants to help develop new manufacturing technologies.

The bill will also establish a fellowship program for manufacturing sciences postdoctoral and senior research fellows, reauthorize the Advanced Technological Education (ATE) program at the National Science Foundation (NSF), and reauthorize and strengthen the Manufacturing Extension Partnership (MEP) program at the National Institute of Standards and Technology (NIST), which helps small and medium-sized manufacturers respond to the extraordinary challenges they face from globalization. MEP has been credited with saving and creating thousands of jobs nationally.

Rep. Sherwood Boehlert, R-N.Y., chairman of the House Science Committee, stated, "The problem the bill addresses is the decline of U.S. manufacturing. Our nation needs a diverse economy, and that economy must include manufacturing. We can't be wholly dependent on others for the goods that enable American families and American businesses to function. Manufacturing provides high paying jobs and helps us hone our technical edge. Yet the signs of manufacturing decline are all around us."

The Department of Labor is also doing its part to combat the potential shortfall of skilled workers by awarding a $498,520 grant to launch "Dream It, Do It," a public/private sector partnership campaign to encourage persons between the ages of 18-26 to pursue manufacturing careers and to expand their education and training opportunities. Additional information is available at http://www.dreamit-doit.com/
Campaign/PR/pr_01042005.aspx.

For the past year, ASME's Federal Fellow at the Office of Science and Technology Policy, Susan Skemp, has also been actively working with the National Science and Technology Council's Interagency Working Group (IWG) on Manufacturing Research and Development. The IWG is comprised of 14 agencies and departments, with budgets tied directly to or providing support for federal manufacturing research and development.

Skemp serves as the OSTP representative on the IWG, as well as the executive secretary. Her role in this pivotal position has been to ensure dialogue, coordination and action among member agencies of the IWG, and communication and outreach to the private sector.

The IWG has maintained a focus on broad coverage of manufacturing technology issues: technology research/ development/transfer, measurements and standards, workforce training, regulatory concerns, etc. They are currently preparing a report and compendium of federal technology research and development activities that will focus on three priority areas: nanomanufacturing, manufacturing for the hydrogen economy, and intelligent and integrated manufacturing systems. The report will be released early in fiscal year 2007.

The U.S. Department of Commerce also recently released a report titled "Manufacturing in America: A Comprehensive Strategy to Address the Challenges to U.S. Manufacturers" (available at http://www.ntis.gov/products/manufacturing.asp?loc=4-1-0). The report focuses on seven key areas of importance to U.S. manufacturers and made recommendations on the public policy changes which need to be enacted to ensure the vitality of the manufacturing sector:

• Creating the conditions for economic growth and manufacturing investment by making recent tax cuts permanent, reducing the cost of tax complexity and compliance, making the research and experimentation (R&E) tax credit permanent, and expanding access to lower cost capital.

• Lowering the cost of manufacturing in the United States by conducting a review of current regulations, lowering health care costs, modernizing the U.S. legal system, and enacting energy legislation.

• Investing in innovation by strengthening the U.S. patent system ensuring an appropriate focus on innovation and productivity enhancing technologies, supporting a newly coordinated Manufacturing Extension Partnership, promoting manufacturing technology transfer, and exploring the unique capabilities of national labs and universities.

• Strengthening education, retraining and economic diversification by establishing a high school and technical education partnership initiative, analyzing specialized training needed to succeed in the manufacturing environment of the future, establishing personal re-employment accounts, coordinating economic adjustment for manufacturing communities, and transforming workforce development programs.

• Promoting open markets and a level playing field by encouraging economic growth, open trade and capital markets; negotiating trade agreements that benefit U.S. manufacturers; enforcing trade agreements and combat unfair trade practices; and reinforcing efforts to promote the sale of American manufacturers in global markets.

• Enhancing government's focus on manufacturing competitiveness by establishing a President's Manufacturing Council, creating an Assistant Secretary of Commerce for Manufacturing and Services position, forming a new Office of Industry Analysis, and fostering intergovernmental coordination.

Congress is taking the global competitiveness challenge seriously. The House Science Committee has been working with the U.S. Department of Commerce to organize a National Summit on Competitiveness, scheduled for Tuesday, Dec. 6, 2006, to promote an action agenda to ensure continued U.S. leadership in innovation.

The summit will identify specific actions necessary to strengthen America's innovation capacity, particularly in science, engineering and technology research, education, workforce development, and the deployment of new technologies. Carlos Gutierrez, the U.S. Secretary of Commerce, will be the convener of this National Summit. Additional information is available at http://www.usinnovation.org.

The challenges of the U.S. manufacturing sector—as well as the public policy solutions to address these challenges—closely resemble the public policy agenda of the engineering community, including the need for a pipeline of adequately trained workers to compete in a global economy, and for R&D to promote innovative products and technologies. In addition, U.S. manufacturing and policy makers need to support national energy legislation and tap into the expertise of the national labs and universities.

home | features | breaking news | marketplace | departments | about ME back issues | ASME | site search

© 2005 by The American Society of Mechanical Engineers