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Remarks at International Trade Administration's Sustainability and U.S. Competitiveness Summit

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Thursday, October 8, 2009

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Secretary of Commerce Gary Locke
Remarks at International Trade Administration’s Sustainability and U.S. Competitiveness Summit
Washington, D.C.

Thank you for coming here this morning.

It's fitting that this is called a sustainability and competitiveness summit—because in today's economy, I don't think you can have one without the other.

Over the last year, no country. . . no industry. . . has been immune from the effects of this economic crisis.

But few areas of our economy have been hit harder than manufacturing.

Earlier this week, I was in Michigan for a meeting of the Midwest Governors Association. You can see what the collapse of manufacturing has done to the states in their unemployment numbers.

  • Michigan at over 15 percent;
  • Ohio, Indiana and Illinois are all at 10 percent or more.

But even more striking is the stories of despair you hear and read about.

Too many Americans are waking up every day having to make impossible choices no one in this country should ever have to make.

Do I buy food or my heart medication? Do I pay the utility bill to keep the lights on or my mortgage to keep my home?

We've got to start putting people back to work in good family wage jobs—and a big part of the solution is revitalizing American manufacturing.

For too long, we've just accepted that a shrinking manufacturing sector is a natural byproduct of globalization or technology or any other number of structural factors.

Once employing one in three Americans, manufacturing now only accounts for one in 10 jobs.

It's time to arrest and reverse the decline.

Manufacturing employment may never again make up one-third of our workforce—nor would we necessarily want it to.

But a vibrant manufacturing base is absolutely essential to America's future.

First of all, manufacturing is a vital source of middle-class jobs, as manufacturing employees make 13 percent more than the average for all other workers in America.

Manufacturing is also a major contributor to American innovation, comprising two-thirds of our nation’s research and development spending.

And as this country attempts to transition to a cleaner energy economy, we're going to need old-line industrial plants in places like Michigan and Ohio churning out solar panels, wind turbines, advanced batteries and other renewable solutions.

The question is: How do we get things moving in the right direction?

President Obama has already made a significant down payment, with over $100 billion dollars worth of grants, tax cuts and incentives in the Recovery Act devoted to manufacturing investments.

But that's only going to get us so far. We've also got to fundamentally rethink the way we build and produce goods in this country.

Take a look at the last century, and there were two things American manufacturers could usually count on: Fossil fuels were cheap, and the externalities of using them, like carbon emissions, were of almost no concern.

Those days are over.

Fuel is no longer cheap. And the external costs associated with fossil fuel energy are dangerously high. If we don’t curb the carbon, the consequences for our environment and our economy will be devastating.

So, we face an urgent task:

Over the next few decades, virtually every economic activity—from the way we manufacture goods to the way we design our transportation systems—will have to be re-engineered to reflect a carbon-constrained world.

But this long-term project shouldn't distract us from the fact that we can make a huge impact immediately, by being more efficient and more sustainable in everything we do.

And if our manufacturers get serious about more sustainably using everything from water to land to energy, it will save them money and go a long way towards making them more competitive in the global marketplace.

Just take energy, for example.

The Department of Energy just did a study finding that the United States electric-power industry alone wastes enough energy annually to fuel the entire nation of Japan for a year.

An EPA study found that if we harnessed all of our industrial waste energy, it could meet 19 percent of the country’s electricity needs. That's the equivalent of 95 nuclear plants.

Is it any wonder then, that people have taken to calling efficiency the “low hanging fruit” of the world’s energy challenge?

The UN Foundation recently said that “governments should exploit energy efficiency as their energy resource of first choice because it is the least expensive and most readily scalable energy option.”

With efficiency, we don't have to depend on scientific breakthroughs or engineering miracles. We're not waiting for economies of scale to get big enough so efficiency can compete with other energy alternatives.

It’s merely a way of maximizing the amount of energy you get from existing sources.

An upfront investment in efficiency is on average five times cheaper than investments in new supply. And it is immune to the troubling vagaries of the energy market.

Efficiency is an economical investment whether oil is $20 or $200 a barrel, because it is not competing with fossil fuels.

Efficiency is a win-win all the way around. It's good for our country. It's good for consumers. And it's going to enable our manufacturers to do more with less energy.

And we know how to do this. The American economy is already more than twice as efficient as it was in 1970.

Building on that success is simply a matter of working with industry to implement efficiency processes that work for their businesses.

In 2007, Commerce launched its Sustainable Manufacturing Initiative to both:

  • Identify U.S. industries’ most pressing sustainability challenges, and
  • To coordinate public- and private-sector efforts to address those challenges.

And that’s just a small portion of our overall sustainability efforts.

We’re out on tour across the country, hosting a series of what we call Sustainable Manufacturing American Regional Tours, or “SMARTS,” which promote awareness and best practices on the benefits of sustainable manufacturing. Small- and medium-sized companies attend these events, which enable them to learn about and share sustainability practices and initiatives with local business leaders.

The International Trade Administration will unveil a Web site later this morning that lists scores of federal government programs and resources that can help U.S. companies enhance their competitiveness in environmentally sustainable ways.

The National Institute of Standards and Technology, is partnering with other federal agencies and industry to help small- and mid-sized companies cut costs.

This public-private effort has already reviewed 125 companies and found ways for them to cut $62 million in costs by reducing water and energy use, and air emissions and solid waste production.

And the return on the companies’ investment to implement these practices is estimated to be 130 to one.

And we offer the successful Manufacturing Extension Program—where Commerce joins with state and local initiatives to partner with private-sector companies to drive billions of dollars worth of gains in efficiency and productivity.

Because there is simply no way to present all the things the Commerce Department, let alone the federal government, is doing on this issue in one day, we have set aside two coffee breaks for you to stop by the federal agency-hosted booths in our lobby and learn more about the programs relevant to your business or industry.

Today’s summit includes representatives from virtually every federal agency with a stake in the sustainable business arena as well as representatives from virtually every U.S. industry sector.

Thank you for coming to the first of many stakeholder events we hope to host on the topic of sustainability and U.S. competitiveness here at the Commerce Department.