The United States Needs To Regain Competitive Edge In Manufacturing
Randy Wolken, President & CEO
We have seen the impact of letting key manufacturing industries leave our shores. It has resulted in job declines in critical manufacturing sectors. It has also reduced our ability to respond to national security threats, made us vulnerable to supply chain disruptions, and reduced our potential economic growth. We must do more to shore up what has been lost over the last few decades.
As you can see in the chart above, we have gained in our competitiveness for R&D and the design-driven sectors of our economy. This has resulted in some job growth and an increased number of firms in this space. We need to maintain these advantages and capitalize upon them.
However, we have lost ground in many other vital areas. The areas that rely on scale and standardization include auto, primary metals, fabricated parts, and chemicals. The same can be said of the industries that McKinsey designates as “learning curve industries,” such as precision tools, semi-conductor, and communication equipment producers. Significant losses in employment and firms have occurred in these industries. The final area of loss relates to the special-purpose machinery and aircraft and defense equipment industries. Again, a consequential loss of jobs and firms has occurred.
The result has been a loss of millions of jobs and billions in economic opportunity. We can do much better. We could potentially gain in the years ahead if we have smart governmental policies and private sector investments. We could see great opportunities in New York and the United States as a whole.
One of the critical changes that presents opportunity is that the productivity-adjusted labor costs make us very competitive with other major manufacturing countries such as China and Taiwan. As a result, we can now compete and win with most advanced manufacturing locations. We need to seize this moment and ensure we see real growth once again.
MACNY is educating and advocating for New York State manufacturing. We need reasonable regulatory environments, competitive manufacturing tax policy, and public-private partnerships related to helping create skilled workers. We are leading our state by providing insights and understanding in these areas. However, we continue to need you to weigh in and lend your voices to these efforts NOW. When you do, we amplify our voices and gain greater awareness of what is possible. Together, we will continue to do this!
To learn more about the data shared above, visit https://www.mckinsey.com/featured-insights/americas/building-a-more-competitive-us-manufacturing-sector?cid=eml-web.