President Barack Obama isn’t the only U.S. government official interested in preserving manufacturing. Several state governments are working to retain and grow manufacturing jobs.
The National Governors Association Center for Best Practices 2013 report “Making” Our Future: What States Are Doing to Encourage Growth in Manufacturing through Innovation, Entrepreneurship, and Investment covers the efforts of eight states: California, Colorado, Connecticut, Illinois, Kansas, Massachusetts, New York, and Pennsylvania. Those states are now working together to help manufacturing, as well as to provide the lessons they’ve learned to other states that also wish to expand manufacturing. Just those eight states represent 30 percent of total U.S. manufacturing Gross Domestic Product, one-third of U.S manufacturing jobs, and more than 25 percent of U.S. exports of manufactured goods, the report notes.
Other state-led efforts include Maryland, which launched a commission to find ways to support manufacturing in the state; the governors of Illinois, Michigan, Missouri, and Tennessee, which in August 2012 formed a bipartisan National Governors Auto Caucus to help foster growth of the industry and its suppliers; and the Southern Governors Association, which focused on manufacturing in 2012–2013. Governors and other officials in states such as Delaware, New Hampshire, and Rhode Island are also proposing state programs to improve manufacturing.
The federal government also funds a Manufacturing Extension Partnership (MEP) in each state intended to help promote manufacturing. Funded by the National Institute of Science and Technology as part of the Department of Commerce, the program is said to be responsible for creating more than 62,000 jobs and $8.4 billion in new and retained sales.
Why pay attention to manufacturing? First, it pays higher wages – as much as 9 percent more than other industry sectors – and is more likely to provide benefits such as health insurance and pensions. It includes activities other than production, such as research, design, technological services, and logistics. In addition, it has a high multiplier effect, meaning manufacturing produces an estimated additional $1.40 in output from other sectors for every $1.00 in final sales of manufactured products. Similarly, manufacturing jobs also support other jobs. “On average, every manufacturing job supports 2.5 jobs in other sectors,” the report notes. “At the upper end, every high-tech manufacturing job supports 16 others.” Moreover, manufacturing accounts for two-thirds of private sector research and development, employing 63 percent of domestic scientists and engineers.
“Manufacturing is too important to lose,” concludes the NGA report.
Steve Leavitt, GM of U.S. Cloud Solutions for Exact