WSJ Suggests: 9 Ways to Revive US Manufacturing

Post: Jun. 9, 2016

The Wall Street Journal published a piece Tuesday suggesting 9 policies the US could adopt to encourage growth in the manufacturing sector. For a quick Thursday read I thought I’d list them all here and then you can pop over to the original article to learn more:

1. Make exports more valuable- Companies that export goods from the U.S. would accumulate certificates equal to the value of their exports. But companies that wanted to import goods would have to purchase certificates from exporters.
2. Impose a value-added tax- The tax, which is used by more than 130 countries, is applied to each step along a production chain as a product or material increases in value or is consumed. Almost all countries with VATs waive them on exports but impose them on imports-letting domestic manufacturers off the hook.
3. Deal with an overvalued currency- The U.S. dollar’s status as the world’s reserve currency is hurting demand for U.S.-made goods in global markets.
4. Look at the true cost of offshoring- When companies decide to offshore production, they often simply seek the lowest initial price per unit. If they were required to take into account the hidden costs of foreign production, US goods would ideally look more cost-competitive.
5. Purge duplicate regulations- When federal agencies impose new rules, they rarely repeal old ones or check to see if another agency has a similar or conflicting regulation.
6. Look at more than jobs- State and federal governments typically view manufacturing as employment generators. But economic development policies that place too much emphasis on boosting head counts risk missing the broader trend coursing through manufacturing even in low-cost locations: automation.
7. Turn community colleges into career factories- While community colleges offer programs for skilled trades, businesses executives complain the course work is often too generalized to suit companies’ needs.
8. Spend more on manufacturing R&D- The government needs to spend more on applied research to solve specific problems in manufacturing and bringing new products to market.
9. Create regional centers of expertise- These centers typically start with a group, a chamber of commerce for example, that assembles businesses, schools and government agencies into a network that can work together to attract new businesses.