We Can Do More to Enhance U.S. Manufacturing

Bill Bates, U.S. Council on Competitiveness

One of my jobs at the Council is to run our CEO-led project on the economic opportunity at the nexus of energy and manufacturing.

While not the genesis of this initiative, the following anecdote highlights its importance. About five years, I sat in my office listening to a senior South Korean government official explain why the U.S. had a window of opportunity unlike anything he’d seen before to jumpstart a manufacturing renaissance. What he saw was a realignment in the global supply of energy away from the Middle East and Russia to the United States.

I think we sometimes take for granted what a sea change this is. Ten years ago the idea that the U.S. could be energy independent was a pipe dream. Our goal was energy security-in a crisis could we manage without our dependence on Middle Eastern and Russian oil and gas?

What energy abundance is doing is providing us an opportunity, a short term competitive advantage, to kick start investment in manufacturing: creating new industries, new products and new processes-and new jobs. And the perception from members of the Council and other private sector leaders is that the U.S. will take advantage of this opportunity.

Last year, the Council and Deloitte asked CEOs around the world which countries are the most competitive in manufacturing? In 2016 the U.S. is second. In 2020, we are projected to be first.

I mentioned earlier that I manage an initiative on energy and manufacturing for the Council. The goal of this effort is to find the keys to unlocking the potential in manufacturing envisioned by these CEOs.

To do it, we decided to go regional and sectoral.

We brought in experts on Advanced Materials. We went to Wisconsin and explored the linkage between Water & Manufacturing. We headed to the Capitol with experts on Bio-sciences and Bio-manufacturing. I have been to Marysville, OH to discuss the future of the agriculture and lawn and garden industries. And later this year, we will head to Chicago to extract information on the energy sector, fly to Alabama to look at aerospace and finally California to delve into the production of pharmaceuticals.

Across all of the dialogues, across all of these issues, sectors, and regions — there were, and I’m confident will be, important commonalities. These are the areas that need attention, if we’re going to keep the momentum going in manufacturing.

Talent: Across all dialogues we heard the same thing-an unmet need for skilled workers. Companies need people for precision agriculture and weather forecasting. National labs need scientists with business expertise and communications skills. Cities need workers familiar with data management and sensors. A big part of the challenge we are facing in matching skills with jobs is the pace of change and technological development.

Sensors/Data Collection & Data Management/AI: It’s fascinating how much we don’t know about the day-to-day operations of our factories, utilities and homes. The more we know, the better decisions we make. Smart factories equal more efficiency. Knowledge isn’t just power, it’s the way to use resources better, spend less and increase productivity. Quick stat-we lose 1.7 trillion gallons of water via leaky pipes each year and many cities aren’t even 100% sure where all the pipes are much less which ones are leaking. Sensors and data analytics could help.

Cyber Security: It might seem obvious, but investment in cyber security must go hand-in-hand with the proliferation of the Internet of Things. The more connected devices we have, the more vulnerable we are.

Infrastructure: Well, here’s a 4 trillion dollar problem. There’s almost no bad idea in this space, the problem is so large. Perhaps combining both the Trump administration incentive-based, private sector proposal with the more traditional public sector proposal that Secretary Clinton put forth during the campaign could get at the scope of what’s needed.

Research: Research underpins it all. We want to be the competitiveness leaders. The innovators. The job creators. It all starts here with new ideas. And the pipeline from basic research to applied research to commercialization to scale up is too slow and uncertain.

Capital: There isn’t enough capital available for people who make things. If you’ve got a hot new app, here’s $100,000 to bring it to market. If you’ve got the next big thing in solar technology that needs $5 million and five years for proof of concept, good luck. One of these potential products could employ a lot of people.

PPPs: Public-private-partnerships relate to all of the other topics. Addressing these issues from research to talent to infrastructure requires collaboration between federal, state, local government, industry and academia. The manufacturing clusters are great examples. We need more of it.

The window of opportunity is still open. We can do more to take advantage of it.

Bill Bates is EVP & Chief of Staff at the U.S. Council on Competitiveness.

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Originally published at https://www.linkedin.com on February 10, 2017.