Obama adviser states case for American manufacturing

April 10, 2012

The Obama administration has made several statements supporting the resurgence of American manufacturing, something that drew the ire and criticism of former cabinet member Christina Romer. After she spoke against the policies outlined by the President, his economic adviser Gene Sperling laid out a series of arguments for why the sector matters so much to the U.S., BusinessWeek reported.

According to the news outlet, Sperling reiterated the policies that Obama laid out in his State of the Union address in January regarding manufacturing strategy, hammering home the point that new policy would eventually rise out of a series of changes in the sector.

Alan Tonelson, a research fellow at the U.S. Business and Industry Council, noted that the step forward outlined by Sperling was not policy but "the fairly detailed use of some of the scholarly evidence that supports the proposition that manufacturing does make an outsized contribution to economic growth."

Sperling highlighted how a resurgence in American manufacturing also helps the rest of the economy, as he spoke to a 2010 study that showed how new production sites in the U.S. actually increase the productivity of other firms in the surrounding area. The economic adviser also noted that the sector needs to be located where innovation is occurring, as the two are closely linked, according to BusinessWeek.

"That explains why Boeing moved their engineers out of their offices and into their assembly plants, why Intel manufactures its latest chips in the U.S., near where the design itself occurs, and why Bell Labs, the source of incredible innovation during the 20th century, 'housed thinkers and doers under one roof,' because they knew that understanding how to make things helped them to innovate," said Sperling.

The Financial Times reported that Sperling also cited, in his heavily-researched defense of the administration, that manufacturing accounts for roughly three-quarters of U.S. research and development and 90 percent of its patents.

This type of innovative approach in the sector has accounted for its recent growth, as manufacturing technology orders have risen by a significant margin in the past several years.

IndustryWeek reported that February 2012 orders represent a 35 percent increase over the same period in the previous year, and a 9.3 percent rise from January numbers.

"Manufacturing technology orders are off to their best start since 1998," AMT President Douglas K. Woods told the news source. "U.S. manufacturers continue to seek increases in productivity through automation and innovative technologies to increase their global competitiveness."