A new study from the Economist Intelligence Unit (EIU) and sponsored by General Electric (GE) highlights the importance of innovation for manufacturing competitiveness. The authors surveyed 360 senior executives in August, including 96 CEOs, from a wide range of manufacturing industries across the U.S. Ninety percent of the respondents said that innovation was instrumental to their long-term success.
Moreover, the industries that were identified to have the “greatest opportunity for growth” over the next one to three years were ones which rely heavily on research and development, such as high-tech, pharmaceuticals/biotech, energy, green tech and electronics.
Given the importance of innovation, it should not be surprising that these same leaders noted the role that government should play in advancing science, technology, engineering and mathematics (STEM) education. In fact, 38 percent of them said that investments in STEM education would help to manufacturers. If we are to remain competitive in global markets, we will need to depend on innovative operations and products.
Yet, this training also brings to mind another challenge: the need for trained workers for advanced manufacturing. In addition to it being cited in this study, the Manufacturing Institute released a study on the skills gap in U.S. manufacturing yesterday on this topic. Among its findings, it says that manufacturers “are having the hardest time filling skilled production jobs that fuel their ability to innovate and grow, even in the face of high unemployment.”
The EIU/GE study also focuses on other issues important to NAM members. For instance, 51 percent of respondents said that the U.S. should “create tax incentives to keep manufacturing in the U.S.,” with another 34 percent suggesting that corporate tax rates should be reduced. Clearly, manufacturers are aware of the fact that the tax structure in the U.S. is in need of reform, especially if we are to remain competitive with the rest of the world. At the same time, 46 percent of respondents “have a negative or very negative attitude towards the current regulatory environment’s ability to support U.S. manufacturing….”
Overall, this provides an interesting analysis, providing a complement to “A Manufacturing Renaissance: Four Goals for Economic Growth,” which was released last week by the NAM.
Chad Moutray is chief economist, National Association of Manufacturers.