Is there a special ingredient that keeps manufacturers in the U.S. on top?

There is and it is technology.

A report recently released by McKinsey and Company discusses the opportunities created when new innovations and technologies are both developed and utilized by manufacturers. Successfully leveraging technology is the difference-maker in a manufacturers’ ability to compete globally. But, they need policies in their home countries to support it. The report says countries that “excel in delivering a competitive ecosystem to sustain talent and innovation are more likely to succeed” in growing their manufacturing base.

NAM-member Verizon posted a blog yesterday on the report. They cite the report’s conclusion that not only does technology play a vital role in manufacturing but manufacturers also drive communications and information services company to innovative. It is a synergistic relationship that is bearing fruit now and is continuing to evolve.

A master chef needs all the tools in his kitchen to make a gourmet meal. If one ingredient is missing the dish could be a disaster. The NAM is committed to ensuring the secret sauce for manufacturers – technology and innovation – remains a key ingredient in our growth recipe.

Brian Raymond is director of technology and domestic economic policy at the National Association of Manufacturers

NAM member company AT&T announced today its plans to invest $14 billion over the next three years to expand and enhance its wireless and wireline IP broadband networks. As manufacturers become increasingly reliant on technology to grow their business and create jobs this is good news.

Manufacturers use information technology throughout their enterprise to grow their business and create jobs. IT is used on the shopfloor to design products and deliver them to customers. Manufacturers also use technology tools to communicate with their employees and their supply chain. The wireless ecosystem powers these and other tools so this type of investment to grow the network will benefit all industries in the manufacturing sector.

Read the blog post “Building a Network for the 21^st Century” by Bob Quinn, AT&T’s Senior Vice President-Federal Regulatory and Chief Privacy Officer, to learn more about the investment and what else the company is doing with the FCC to help ensure all can take advantage of broadband technology.

Last week the Commonwealth of Massachusetts took a step toward leveling the playing field for companies that invest in information technology and do so by playing by the rules. The Massachusetts Attorney General fined a Thailand-based seafood company $10,000 for using unlicensed software in its operations. The AG sent a strong message that companies competing unfairly against those in her state will not be tolerated.

This case is another example of bad actors using pirated or counterfeit information technology to gain an advantage over companies that follow the rule of law. Unfortunately, we have seen this tactic growing inside the highly-competitive manufacturing marketplace.

Like many other industries, manufacturers place a heavy emphasis on expensive technology tools as they work to out-innovate their competition from around the world. For example, computer software tools run machines, design products, and make facilities run efficiently and it does not come cheap. These tools leveraged in manufacturing environments are quite often the target of unscrupulous actors who steal or copy it. These companies are taking – for free – IT products for which companies have to pay a significant cost. This creates an unfair advantage over law-abiding manufacturers.

Stopping this practice that is hurting manufacturers is a priority for the NAM in Washington. If you feel you have been impacted by unfair competition, we encourage you to contact us and join our efforts. We would also encourage you to consider joining the newly-launched National Alliance for Jobs and Innovation, a coalition formed to use existing law to help stop this unfair competition.

The innovation lead we have enjoyed in the manufacturing sector is what has driven the economy to grow. We need that growth to continue and not be slowed by those not playing by the rules.

The Information Technology and Innovation Foundation (ITIF), a non-partisan think tank, just released a study called Eroding Our Foundation: Sequestration, R&D, Innovation and U.S. Economic Growth highlighting the broad impact sequestration will have on the R&D funding, the innovation it creates and the job creation engine it powers. The report specifically focused on basic research funding at civilian agencies, the technology breakthroughs that have resulted, the partnerships businesses have with those universities and agencies that receive that funding, and the jobs that result when they are brought to market – and the threat posed to this entire ecosystem if sequestration takes effect.

The NAM is very aware of the current budget environment and the need to prioritize investments. We are also aware the high-level of competition we face from around the world to invent and develop the next game-changing manufacturing technology, medical device, or process. As NAM research has highlighted, cuts to the Defense budget will have devastating effects on the manufacturing supply-chain with potential job losses totaling close to one million manufacturing workers. The ITIF report brings even more attention to the danger of sequestration and finds that close to 200,000 jobs per year could be in jeopardy if these across the board cuts to R&D investment are implemented.

As manufacturers lead the U.S. economic recovery now is not the time to shut down one of the key components of economic growth that has helped solidify our worldwide innovative lead. We encourage you to read the NAM report on defense cuts as well as the ITIF report and tell your elected officials how it will impact your business.

Brian Raymond is director of technology and domestic economic policy, National Association of Manufacturers.

The NAM continues to warn lawmakers about the impact sequestration will have on manufacturing jobs based on our recently released study. On Friday the Center for Strategic and Budgetary Assessments (CSBA)  released a detailed background report which provides a “comprehensive account-by-account and outlays analysis of its potential impact on the DoD budget” according to CSBA’s website.

Both reports make the same conclusion: Sequestration will cost America jobs in the defense sector.

Todd Harrison, author of CSBA’s backgrounder cites that DoD contractors would face reductions in contract awards, extensions, and options. DoD may also be forced to renegotiate contracts that would result in increased costs to the government. DoD’s civilian employees would be hit especially hard. In order to meet the budget numbers, there would have to be a decrease in 108,000 of these jobs. Mr. Harrison also provided a slide presentation to illustrate these important points.

We encourage you to tell your Members of Congress about the job-killing defense cuts that will soon face manufacturers. Please visit the NAM’s Manufacturing Works website if you would like to take action and contact them directly. 

Brian Raymond is director of technlogy and domestic economic policy, National Association of Manufacturers.

A bipartisan group of 19 leaders of the House Small Business Committee sent a letter to the Federal Trade Commission (FTC) yesterday urging them to use their existing authority to crack down on companies using stolen intellectual property to create an unfair advantage over US manufacturers. The NAM applauds these Members of Congress for working up to the last few hours on the last day of the Congressional session until they return in September fighting for manufacturers.

The investments manufacturers make in information technology which they then use to run their businesses, design their products and service their customers is what gives them an innovative edge over their competitors. These IT tools can create that edge in the marketplace that many small businesses use to grow their operations and create jobs.

Unfortunately, many of these small manufacturers, sometimes unknowingly, are competing on an unlevel playing field. Their competitors, primarily from outside the US, are using pirated or stolen information technology for which they pay nothing. This unfair advantage translates into lost revenue and jobs for US manufacturers playing by the rules.

The NAM is very sensitive to the global supply chain that is integrated into manufacturing enterprises of all sizes. Just as the Members of Congress said in their letter, the FTC should not to disrupt or burden manufacturers as they pursue the bad actors. The NAM agrees and we are committed to working with governments at all levels to ensure US manufacturers continue to win and create jobs.

Brian Raymond is director, technology  and domestic economic policy

A number of Senators – led by Sen. Hutchison (R-TX) and Sen. McCain (R-AZ) – introduced an updated version of their Strengthening and Enhancing Cybersecurity by Using Research, Education, Information, and Technology Act or “SECURE IT” Act today. This new bill makes important changes to address the privacy concerns that have been raised during both the House and Senate debate. It also clarifies the legislation to ensure it does not place unnecessary reporting and regulatory requirements on manufacturers. 

This bill will help facilitate the sharing of information between the public and private sector – a tool manufacturers do not have now and have told Congress it should be the highest priority if cybersecurity legislation is to help protect critical infrastructure. It does not increase the cost or regulatory burden on companies. This means manufacturers can have the flexibility to continue to drive research and engineering that will push cybersecurity innovation and improvement faster than any government mandated standard. 

The NAM supports this updated legislation and continues to call on the Senate to move the debate forward and pass legislation that helps to increase the readiness level of our nation’s critical assets against cyberthreats.

The NAM-supported Cyber Intelligence Sharing and Protection Act (H.R. 3523) recently passed the U.S. House of Representatives with strong bipartisan support. This bill is the first step toward better securing our nation and our economy from emerging threats in cyberspace. The focus now shifts to the Senate which has signaled it will take up cyber legislation later this month.

Manufacturers supported this legislation because it would permit the public and private sector to share cyber threat intelligence with each other. As owners and operators of the vast majority of our country’s critical infrastructure, manufacturers are sometimes the first line of cyber-defense in today’s interconnected world. If able to provide and receive intelligence – while vigorously protecting the privacy of their customers, suppliers, and employees – the private sector will be better able to protect itself from those with malicious intent.

What this legislation does not do is create a new bureaucracy or a regulatory regime. It does not give the government any ability to monitor or censor private networks. In fact, no new authority is granted to the government. That includes the intelligence community, the Department of Defense, and the National Security Agency. Most importantly, company participation is completely voluntary with no entity required to participate or share information.

There is broad support across the business community for this NAM-endorsed approach. The Senate now has an opportunity to send a bill to the President for his signature. Manufacturers know that our economic security is directly related to our cybersecurity. It is time for the Senate to act on legislation that will strengthen our nation’s cybersecurity and not create a new and unnecessary regulatory burden.

As part of what is being called “Cyber Week” by House Leadership, the chamber is scheduled to vote on four cybersecurity bills Thursday and Friday. The NAM sent a letter to Capitol Hill this morning in support of all the bills. Why do we support efforts to strengthen the cybersecurity of our nation? We tell House Leaders this in our letter:

Manufacturers through their comprehensive and connected relationships with customers, vendors, suppliers, and governments are entrusted with vast amounts of data. They hold the responsibility of securing this data, the networks on which it runs, and the facilities and machinery they control at the highest priority level. Manufacturers know the economic security of the United States is directly related to our cybersecurity.

Since manufacturers build and own the U.S. cyberinfrastructure and ecosystem, the NAM has been advocating aggressively for common-sense legislation that removes the barriers that prevent the public and private sector from sharing cyberthreat information. The Cyber Intelligence Sharing and Protection Act (H.R. 3523), one of the bills being considered this week, helps to solve this problem.

The NAM has also called for improving how the Federal government coordinates its cybersecurity R&D efforts as well as the importance of a highly-skilled Federal cyber-workforce. The other three bills on the calendar address these issues important to manufacturers.

We applaud the bipartisan efforts in the House to get these bills to the floor. We are looking forward to a full debate in the Senate which is likely coming soon!

The California State Senate will soon take up SB 1161, a measure on internet-based services and the negative impact unnecessary regulation can have on their growth and ability to create jobs.

This bill would reaffirm California’s current stance toward IP enabled services – useful tools to consumers and businesses such as Microsoft’s Skype – and other innovative technologies that can see their economic growth stifled for the developers and the customers that use them if unnecessary regulations are imposed. This measure would not affect current law protecting consumers of the ability of the legislature to enact future legislation.

Manufacturers are continuing to increase their dependence on the internet and the services enabled and delivered by it to serve their employees, customers, and shareholders. Companies rely on an open and competitive internet to help ensure their growth. In order to continue to foster continued investment, job creation and innovation in this area, it is important that policies, like California’s not unduly regulate services.

The California Senate Committee on Energy, Utilities and Communications will hold a hearing on this measure April 17.