Reports from Massachusetts indicate unusually high voter turnout in today’s special election to replace the late Sen. Ted Kennedy (D-MA) – that is, unusually high for a special election and looking more like general presidential election turnout levels. In this race, it’s hard to say what high turnout means in terms of who wins – Attorney General Martha Coakley (D) or State Sen. Scott Brown (R). Few expected Republicans to have a chance in the Bay State and the race only popped into national news as Brown began to gain ground in polls, eventually pulling ahead in a number of surveys. Heading into Election Day, Brown seemed to have enough momentum to win, or at least to come closer than anyone would have predicted even a few weeks ago.

Clearly, there are local dynamics and policy fights playing into voter sentiment today but the issue that has dominated the national coverage of this race is health care, and it’s worth remembering that there’s probably no other state in the country where health care reform is more in the minds of voters. Former Massachusetts Republican Gov. Mitt Romney signed the first major state-level legislation to attempt universal health care coverage in April 2006. And this issue was pushed by Senator Kennedy during his entire career in the Senate.

A Brown victory, or even a small victory margin for Coakley, should send a clear message to the White House and congressional leaders in Washington that it is time to start over on health care and get it right. If Massachusetts voters are not overwhelmingly convinced that the current health care legislation is important enough to ensure the Democratic majority in the Senate has the 60^th vote they need to pass the bill, it is unlikely to have support from the majority of voters in other states. (Lest we forget, the 2010 mid-terms are less than 10 months away and like it or not, health care will be a key issue in the minds of voters everywhere.)

Manufacturers, too, are concerned that the Patient Protection and Affordable Care Act is so fundamentally flawed that we need to “start over” to have a meaningful discussion about reform. The NAM is a member of a broad alliance of business and other groups that want to do health care right, Start Over! You can see the coalition’s membership and TV spots about the Senate health care legislation at http://www.employersforahealthyeconomy.org/.

Teresa DeRoco Cupit is Assistant Vice President, External Affairs, for the NAM.

Recently the Wall Street Journal went looking for today’s innovation locales. Not surprisingly, they found that the innovations that spur the economy come from every part of the country. Many Americans are unaware that about two-thirds of US innovation comes straight out of the manufacturing sector. Manufacturers invent new technologies and processes and then turn around and use them in their plants and facilities.

Maybe it’s because my daughter is starting at Virginia Tech later this month, but I liked the way reporter Reed Albergotti pointed out some of the inventions coming out of Blacksburg, VA, home of Virginia Tech. Their university tag line is “invent the future” and they produce some of the best engineers anywhere in the country. But back to the article–local inventors there developed a patent for a product that could help warn pilots about pending engine failure. Another inventor came up with a more energy-efficient motor; another found a way to pack more information onto fiber optic cables.

Each one of these could transform industires and launch whole new companies.

The Journal combed through 475,000 US patents granted in the pasat four years and looked for the zip codes that have the most patent activity. San Jose, CA came in first, with nearly 4,000 patents alone. At the other end of the list was St. Charles, Missouri, with 25 patents–still, a 43 percent increase over 2002. The town is the home of a large number of engineers who used to work at McDonnell Douglas aerospace. The town has recognized this incredible resource and is seeking to harness it with two incubators to help nurture the growth of small companies with good, new ideas.

If you wonder if patents and copyrights mean anything anymore, you have to look no further than these towns like St. Charles, MO and San Jose, CA. Be sure to take a look at the Manufacturing Institute’s recent report on intellectual property, too. It was written by Professor Richard Epstein at the University of Chicago Law School and you can read all about by clicking on the link above.

The Commerce Department reported today that new orders for manufactured products rose by 1.2% to a record $406 billion in June. The gain in June was all in durable goods (fabricated metals, primary metals, computers and electronics, transportation equipment and furniture all posted gains). Meanwhile, following very strong gains in April and May, new orders for nondurable fell by 0.7% in June (9 of 11 nondurable sectors posted falling orders).

Since manufacturing orders tend to bounce around from month-to-month like a Yo-Yo, measuring orders over a 3-month span gives a little better perspective on the health of manufacturing. Here we see that new orders for durable products has dropped off by 1.7% in the 3 months ending in June, due primarily to big drop-offs in transportation and computers after big increases earlier in the year.

Excluding these two sectors, new orders for durable manufactured products have risen by 4.7% over the past 3 months (primary metals up 12.4%, electrical equipment 8.7%, fabricated metals 5.3%, machinery 3.7% and furniture 2.7%). At the same time, nondurable orders are up 2.3% over the past 3 months.

While the overall U.S. economy is slowing, today’s report indicates that the manufacturing recovery remains on solid ground. Tomorrow, the Labor Department will report on the employment situation in July, where I expect manufacturing production employment will rise for a 10th consecutive month.

Companies that invest in supply chain security measures can expect substantial benefits that far outweigh the costs of the security expenditures, according to a new study by Stanford University released today by The Manufacturing Institute, the NAM’s research and education arm.

“This new study quantifies for the first time the significant business value of global supply chain security investments, confirming a broad range of benefits that can have a positive impact on a company’s bottom line,” said Jerry Jasinowski, president of The Manufacturing Institute. “The findings will be of great value to companies that traditionally have found it challenging to justify security-related investments because they focused only on the direct benefits and not on the magnitude of the collateral benefits.” The study was made possible by a grant from IBM.

Eleven major manufacturers and three logistics providers that import into the United States and are considered “innovators” in supply chain security in their industry participated in the study. These innovative companies all received the expected security benefits from their investments such as reduced vulnerability to global acts of terrorism, natural disasters and energy shortages, but they also documented for the first time significant “collateral” benefits.

Among the study’s major findings, the companies collectively:

“These are very significant findings because of the magnitude of the benefits realized, and because it’s the first time the industry has been able to quantify them,” said Theo Fletcher, vice president for import compliance and supply chain security, IBM. “The results clearly demonstrate that in addition to lower risk and higher security, investments in supply chain security can provide significant business value to organizations by helping them to improve internal operations, strengthen relationships with their customers and overall increase their profitability. If it’s done correctly, supply chain security can be a competitive advantage,” he said.

“We identified five major areas of improvement for manufacturers and logistics service providers/ocean carriers stemming from supply chain security investments: inventory management and customer service; visibility; efficiency; resilience; and customer relations,” added the study’s co-author, Dr. Barchi Gillai of Stanford University. “Despite the diverse types of companies that participated in the study, almost all of them realized benefits in each of the five areas identified. Given their broad range of direct and collateral benefits, security investments should not be considered as a financial burden but rather as an opportunity for improving business performance and profitability,” she concluded.

Embracing both American confidence and competitiveness, President Bush used his remarks to an NAM audience last week to highlight the Administration’s economic accomplishments.

More importantly, he laid out a path for future prosperity, calling for enactment of the “smart things we can do,” i.e., the policies this country needs to ensure future economic growth.

We at the NAM think he hit all the rights points, which, of course, just happened to coincide with the NAM’s priorities. There can be little doubt that tax relief has spurred strong economic growth, leading to record employment and a declining federal deficit.

Indeed, a Commerce Department release that same day announced the latest evidence of that growth: New orders for durable manufactured goods rose 3.1 percent in June. The broad-based rise in new orders was the strongest in three months and the fourth gain in the past five months, anticipating a strong third quarter for U.S. manufacturing.

And how can we maintain and enhance America’s ability to compete in the global marketplace? The President’s remarks proposed a straightforward course of action:

The House has departed steamy Washington for the August recess, while the Senate remains for another week of debate over important issues involving energy, tax relief and pension reform.

As members of Congress meet with their constituents back home, they’ll be asking for guidance on which issues to pursue during the remainder of the 2006 congressional session.

We suggest that they start with the economic agenda outlined by the President in his remarks to the NAM, an agenda the NAM heartily endorses.

In fact, we think it would be the smart thing to do – so America can remain confident, competitive, and the economic leader of the world.

How are global companies protecting their supply chains from disruptions caused by terrorist acts, natural disasters and energy shortages? A new study by The Manufacturing Institute and Stanford University to be released Aug. 1 quantifies and confirms for the first time the substantial collateral benefits experienced by 14 major manufacturers and logistics providers that are considered innovators in supply chain security. The study was conducted for The Manufacturing Institute, the research and education arm of the National Association of Manufacturers, for its “Manufacturing Innovation” series of ground-breaking reports.

For more information on this survey-based report, check back here on August 1 for a summary and a link to the report. We’ll be interested in your comments and feedback on it, right here on the best business blog around.

I posted an entry this morning on The Hill’s Blog site. Check it out by clicking here.

As we hinted below, the President is coming to speak to us on Thursday here in Washington. If you are an NAM member and are interested in attending, click here.

Needless to say, this is huge. (In New Jersey, that’s pronounced, “yooj.”) A Presidential address is a big deal. We are honored.

Stay tuned. We’ll be updating you on information as we get it and of course will report on the event in this space on Thursday.

The WTO Doha Round negotiations have just been suspended indefinitely. The NAM has been a strong supporter of a Doha Round that would cut foreign barriers to our exports, but not a Doha Round in which the United States cut its already small barriers and got little or nothing in return.

I just spoke with the U.S. Trade Representative, Ambassador Susan Schwab, who is in Geneva today as the negotiations are ending. I told her we were fully supportive of the President’s and her policies that only a Doha Round that really cuts trade barriers is worthwhile. She told me she remains committed to an ambitious Doha Round outcome that will enable us to achieve the goals established back in 2001 – a balanced negotiation that is win-win for all, including for American manufacturers.

The problem is that too many other countries are more interested in defending their markets than in exchanging more market openings. We fully support Ambassador Schwab’s insistence that there is no deal until others are willing to open their markets as we have opened to them.

My statement to the press elaborating on this can be accessed by clicking here.

I posted some commentary this afternoon on the blog for The Hill newspaper. We supported this FTA because of the obvious benefits for all of our members, click here to read more.