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Global Clinton Initiative Announces Pilot Manufacturing Supply Chain Network, Reports look at U.S. Manufacturing

August 28, 2013

The Global Clinton Initiative (GCI) and five partner organizations announced a regional pilot program that will create a manufacturing supply chain network to support small- and midsized-manufacturers in the Hudson Valley region of New York. The goal of the pilot program is to create a scalable model that will ultimately provide a framework for a nationwide supply chain network and grow the country’s manufacturing base. The proposed National Supply Chain Network Initiative’s (NSNI) key components include helping to connect small- and midsized-manufacturers with large manufacturers as suppliers, improving access to innovation in manufacturing, providing direction technical and other assistance through the use of a state-of-the-art online portal that leverages the expertise of existing organizations and addressing other issues related to a healthy manufacturing sector (e.g., capital/financing, green manufacturing practices). According to the press release, the GCI intends to launch an additional two pilot programs – one in the Midwest and another in the West.

NSNI and similar programs have the potential to play an important role in sustaining a U.S. manufacturing renaissance. These programs offer the potential to reduce the cost of manufacturing domestically that will lead to more reshoring of domestic manufacturers and increase the attraction of foreign operations. Two recent reports from the Boston Consulting Group and the U.S. Government Accountability Office highlight the potential benefits of these programs.

A recent report from the Boston Consulting Group (BCG) claims the U.S. is steadily becoming one of the lowest cost countries for manufacturing in the developed world driven by low costs of labor (adjusted for productivity) and low energy costs. BCG contends by the end of this decade U.S. manufacturing will capture up to $115 billion in annual exports from other nations. The report also found that the U.S. likely will see up to $5 million manufacturing and service jobs created due to reshoring of operations from China. Manufacturing sectors with the highest growth potential include transportation equipment, chemicals, machinery and computer/electronic products.

The U.S. should continue to develop federally supported, private-public partnerships that leverage the public sector to help their manufacturing industries maintain competitiveness in a rapidly changing global economy, according to a new report from the U.S. Government Accountability Office (GAO). The GAO compared the U.S. to four other developed countries with strong manufacturing bases — Canada, Germany, Japan and South Korea.  In spite of cultural and social differences between the countries, GAO found that each country provides a strong mixture of programs (e.g., support for R&D, cluster programs, funding) to support manufacturing.  In comparison to its peers, the weakest area for the U.S. is providing vocational training for manufacturing related jobs. Among its recommendations, the GAO calls for the scaling up of newly emerging, successful regional vocational programs to address this issues.

Report Confirms General Conception that Manufacturing Positions are “Good Jobs”

A report from the Economics and Statistics Administration (ESA) confirmed the general conception that entry-level manufacturing positions are “good jobs” that provide above average wages and benefits, full-time hours and stable employment. Using Quarterly Workforce Indicators data, ESA researchers found that new hires in the manufacturing sector earn more than new hires in other industries. They also found that new manufacturing hires thrived during the recession in comparison to their peers in other industries. Real average earnings for new hires in manufacturing grew 3.5 percent, real earnings for hires in other industries were flat.

manufacturing, regions, federal agency, policy recommendations