Industry Market Trends
Key Policies to Boost Manufacturing: Create a Competitive "Race to the Shop"
February 7, 2013
In the second part of a series on boosting American manufacturing, the Brookings Institution makes the case for a nationwide initiative to improve and expand the skilled industrial workforce. In the wake of the recession, the U.S. economy has shifted its focus onto the critical drivers of economic growth: innovation and production. To stimulate growth, the U.S. must increase exports, reduce waste, and produce more of the key goods that boost business activity. The most effective way to do so is to provide greater support to the manufacturing sector, which leads the way in high-tech innovation and the creation of well-paying jobs. In the second of a series of key policy recommendations to aid the U.S. economy, the non-partisan Brookings Institution calls for the creation of a national "Race to the Shop" competition, which would challenge U.S. states and metropolitan areas to align their policymaking and investments to meet the labor needs of their primary manufacturing industries. According to Brookings, America's advanced manufacturing sector is the linchpin of a strong workforce, providing jobs that pay nearly 20 percent higher average weekly earnings than non-manufacturing jobs. Although manufacturing accounts for only 9 percent of U.S. employment and 11 percent of total GDP, it employs 35 percent of all engineers, accounts for 68 percent of R&D spending, and generates 90 percent of all patents. Moreover, manufactured goods represent 65 percent of U.S. trade. However, many manufacturers are struggling to find qualified workers who meet the demands of increasingly complex production methods. To help bridge this skills gap, Brookings has proposed an annual $150 million competition - modeled on the Obama administration's Race to the Top education program - that would modernize federal investment in workforce development and training for advanced manufacturing. The program is designed to encourage state and metropolitan areas to compete for federal funding by developing long-term plans, investment strategies, and regulatory and administrative reforms that support and strengthen the top manufacturing industries in their region, with a particular focus on skills training and professional development. "The competition would require a cross-section of leaders from the public, university, non-profit, and private manufacturing sector in states and metro areas to organize a task force (perhaps led at the state level by the governor's office and at the metro level by a consortium of elected officials or a leading non-profit or manufacturing intermediary) that would be charged with designing and submitting a proposal to address the manufacturing workforce and skills challenges within their state or region," the report explains. More specifically, each area competing for investment would present a plan that:
- Articulates a clear economic vision based on the strengths and specializations of the advanced manufacturing in the region;
- Identifies key weaknesses and barriers, such as lack of vocational or skills training, to successfully implementing the plan;
- Presents strategies that bring the plan to fruition through tangible projects and investments involving manufacturing companies;
- Leverages other federal funds in support of these strategies;
- Reforms local policies and regulations to bolster the plan; and
- Provides accountability for governmental and private sector participants through transparent performance measures.