#436. The Manufacturing Resurgence: What it Could Mean for the U.S. EconomyPosted on
The Manufacturing Resurgence: What it Could Mean for the U.S. Economy
With all the talk about jobs coming back, or re-shoring, to the United States, we wondered: Will American manufacturing ever get as big as it once was? A new study by The Aspen Institute looked into what it would take to achieve just that. The study examined numerous scenarios to determine what economic trends could power such a change.
Results were projected to 2025. With the right policies in place, the manufacturing share of value added in a resurgence scenario grew to 15.8 percent of GDP, compared to 11.6 percent in 2012 and 11.1 percent in 2025 under the “business as usual” baseline forecast. Also, the resurgence scenario assumes the creation of 2.7 million new jobs directly in manufacturing, and direct employment in manufacturing to rise to a level of over 16.3 million jobs, compared to 12.3 million in 2012 and about 17.6 million in 1998.
According to the research, major policy directions which could support achievement of the resurgence scenario are:
- Trade Policy: complete more trade-opening agreements, such as the current negotiations with Asia and Europe; combat “competitive currency devaluations”; and work to achieve global macroeconomic stability.
- Energy Policy: sustain current energy boom in oil and gas production; improve electric grid to allow development of new sources of power generation, such as wind and solar; support more efficient use of energy through conservation efforts.
- Regulatory Policy: reduce overlapping and layered regulations through regulatory forbearance, elimination of duplicative regulations, and more rigorous review of costs and impacts of new regulations; and use trade negotiations to reduce costs of and impediments to trade by converging or harmonizing regulations.
- Manufacturing Labor Force: improve K-12 performance, including science, technology, engineering, and mathematics (STEM) education; develop nationally recognized skills certification programs and certificates; expand and improve apprenticeship and vocational education programs; encourage entry of non-traditional demographic groups to manufacturing positions and skills; reduce barriers to entry in professional fields related to manufacturing; and reform immigration to support permanent work status for skilled workers, engineers, and research personnel.
The report concludes by stating “this forecasting exercise ought to lend some hope that we can indeed look ahead to a manufacturing resurgence and the sustainable macro and microeconomic gains that it brings, if we choose to follow this path.”
We at Agracel are cautiously optimistic that a manufacturing resurgence to the extent described in this report is a realistic scenario. We certainly hope so! Time will tell…
For the complete report, visit The Manufacturing Resurgence.