Posted at 1:59 PM
Today, U.S. Secretary of Commerce Penny Pritzker addressed the importance of manufacturing to the U.S. economy, the top issues currently facing the industry, and efforts to foster innovation at the National Association of Manufacturing (NAM) Summit in Washington, DC. The Department of Commerce has had a longstanding partnership with NAM, which represents small and large manufacturers in every industrial sector and in all 50 states.
During her remarks, Secretary Pritzker discussed two of NAM’s top priorities: trade promotion and the reauthorization of the Export-Import Bank. Currently, 96 percent of the world’s customers live beyond U.S. borders, yet many American businesses lack equal access in foreign markets. High-standard trade agreements like the Trans-Pacific Partnership and the Trans-Atlantic Trade and Investment Partnership are essential to addressing trade barriers, opening new markets, and keeping U.S. manufacturers globally competitive. Resources such as the Export-Import Bank are also necessary to support manufacturers, especially smaller firms, with exports and trade efforts through access to financing.
Additionally, the Commerce Department and the Administration are committed to setting the conditions for a strong, thriving manufacturing sector in America which creates jobs, grows the U.S. economy, and leads the world in innovation. Initiatives such as the National Network for Manufacturing Innovation must continue to bring key stakeholders together from industry, government, community colleges and universities, and non-profits to ensure cutting-edge technologies are designed and deployed here in the United States.
Remarks as Prepared for Delivery
Thank you, Jay and all of the leaders of the National Association of Manufacturers, for inviting me to join this summit and for your efforts every day to promote America’s manufacturers. I have always felt a personal connection to NAM’s work. Generations of my family have recognized that manufacturing has long been the backbone of our nation’s economic prosperity. This was particularly true for my uncle Robert, who served as NAM’s Chairman and who ran a conglomerate of more than 100 manufacturing companies.
He taught me about the important role manufacturing plays in creating good jobs, in supporting successful careers, in spurring innovation, and in sustaining economic growth. I came to understand, very early on, that manufacturing has been vital to the American people and to our country since our inception. That remains the case today. And as Secretary of Commerce, I have made strengthening our manufacturing sector into the future a priority.
That future includes bright young people like Micah Raider, a high school senior in Wichita, Kansas, who had always shown an interest in his technical and engineering classes. Last October, on Manufacturing Day, Micah’s teacher encouraged him to attend an event at Wichita Area Technical College, where the school’s Composite Technology program demonstrated how to design, produce, and repair aircraft.
At that event, Micah’s eyes were opened to a new pathway for his education and an exciting possibility for his career. Micah was hooked. He enrolled in a course at the college and earned a certificate in Composite Fabrications. Today, he continues his studies as part of the Composite Technology program. Micah Raider sees his future in manufacturing, and we need to give him every opportunity to develop his skills, earn a job, and build a good career.
We know that if Micah and his peers succeed, our manufacturing sector will grow and so will America’s economic leadership and competitiveness.
For Micah and others like him, now and in the years to come, we at the Department of Commerce are committed to setting the conditions for manufacturing in America to thrive.
At the heart of that commitment is one of NAM’s top priorities: promoting more trade and exports. As Jay recently wrote, “There is tremendous potential to be gained by lowering the barriers for manufacturers by negotiating new trade agreements.” He is absolutely right. All of you understand that 96 percent of the world’s customers live beyond our borders.
Yet, too often, your companies lack equal access to foreign markets and confront significant barriers to entry, including restrictive tariffs, unfair customs practices, threats to intellectual property, and arbitrary tax policy.
For example, in some Asia-Pacific markets, our businesses face:
- 83 percent tariffs for automotive goods;
- 70 percent tariffs for machinery and capital equipment; and
- 30 percent tariffs for chemicals, medical equipment, and infrastructure products.
Addressing these barriers and opening markets are the central forces that drive President Obama’s commitment to a robust trade agenda, which will increase your access to customers around the world, increase your growth rate, and improve your ability to create jobs.
Currently, we are focused on negotiating strong, high-standard trade agreements like the Trans-Pacific Partnership and the Trans-Atlantic Trade and Investment Partnership. You recognize the market opportunity in the Asia-Pacific region: 45 percent of all U.S.-manufactured exports last year went to TPP countries. That opportunity will only expand in the coming years, as middle class consumers living in the Asia Pacific will grow from 570 million today to an estimated 3.2 billion by 2030.
TPP will not only secure fair access for your companies to this fast-growing consumer base, it will also level the playing field for manufacturers like Amodex Products – a family business in Bridgeport, Connecticut, that makes and sells a non-toxic ink and stain remover. For nearly two decades, the company has been shipping its products to Europe and Asia, and exports account for roughly 10 percent of the firm’s annual revenue. But Amodex goods currently face a 22 percent tariff in Vietnam, while competitors from Korea and China face no tariffs there.
When TPP enters into force, Amodex will not only have a fair shot at competing in Vietnam, but in markets across the region. As the company’s President, Beverlee Dacey, recently said: “The potential passage of TPP would greatly facilitate our efforts in expanding our made-in-the-USA products to Southeast Asia due to the agreement’s focus on trademark enforcement and lower tariffs.”
TPP and T-TIP are critical to expanding exports, but small and medium-sized enterprises like Amodex need every possible tool available to be globally competitive, especially access to financing. At this moment, trade for many smaller firms depends on the reauthorization of the Export-Import Bank. Almost 90 percent of the bank’s transactions support American small businesses. And it is an essential lifeline to many small manufacturers, because it fills export financing gaps through its loans and insurance programs. The global competition is fierce for these smaller firms.
Foreign governments provide aggressive financing for their exporters. In fact, there are nearly 60 export credit agencies around the world that are doing whatever it takes to win deals for their home companies. It is imperative that we provide the same support for OUR companies.
Let me give you an example: Hoffman International in New Jersey is a dealer and distributor of heavy lifting and construction equipment. In 2013, with Ex-Im’s support and facilitation, Hoffman was awarded a $47 million major supply contract to deliver construction and road building equipment to Cameroon. When announced, it was the largest Ex-Im deal ever completed for a small company – and had a huge economic impact here at home adding 19 new jobs at Hoffman, and creating an additional 31 jobs throughout their U.S. supply chain. To strengthen the hand of manufacturers like Hoffman and thousands more nationwide, the Ex-Im Bank must be reauthorized without any further delay.
Along with passing trade legislation and achieving Ex-Im reauthorization, we at the Department of Commerce are focused on setting the conditions for greater innovation. We know that between one-third and one-half of economic growth in the United States can be attributed to technological and scientific innovation. Advanced technologies like 3D printing, laser cutting, and digital manufacturing are a source of competitive advantage for American manufacturers. Our Administration, like NAM, knows that these cutting-edge technologies should be designed and deployed here in the United States. But developing them is incredibly complex. If we want to take the best ideas from lab to market, government has a central role in promoting collaboration across the public and private sectors.
That is the purpose of the National Network for Manufacturing Innovation, or NNMI. As part of this initiative, a network of manufacturing institutes bring together community colleges, universities, the private sector, NGOs, and needed supply chains, encouraging regional collaboration and breaking down silos. This cooperation lowers the cost for product development and enables us to translate promising discoveries into American-made products that can be sold across the globe.
While NNMI is still in its infancy, we are seeing early signs of success. For example, the America Makes institute in Youngstown, Ohio, has brought together 142 partners, all focused on improving and expanding the use of 3D printing. Already, this institute has become an attractive hub for businesses large and small, including: GE, which recently announced a $32 million investment in a new 3D printing facility right there in Youngstown; and RP+M, a small company that just added 10 jobs in the last 12 months – thanks to its connections and relationships with America Makes.
The early successes of our first institutes led Congress to pass the Revitalize American Manufacturing and Innovation Act, which will expand and strengthen NNMI. The legislation provides Commerce with the unique authority to establish advanced manufacturing institutes in technology areas selected by industry, and in our latest budget, we have requested funding for the first two of these hubs. I hope we can secure your support for this initiative.
Before I close, I want to touch on an issue that almost every one of the 1,700 CEOs I have met as Commerce Secretary has raised with me: the need for qualified workers to fill jobs in manufacturing and in businesses throughout our economy. I know everyone in this room shares this concern. According to a recent report, 84 percent of manufacturing executives said there is a talent shortage in this sector.
And the challenge is not disappearing anytime soon. Between now and 2022, our growing, dynamic economy will need to fill 2.2 million openings for production workers; half-a-million openings for engineers; and an untold number of openings for jobs in new, emerging occupations. Developing a skilled workforce demands our collective best efforts – in government, businesses, educational institutions, and non-profits.
At the Department of Commerce, for the first time, we have made skills and workforce development a priority. Through our “Skills for Business” initiative, we are partnering across the Administration to ensure that our training programs meet the needs of industry and prepare workers for the jobs of the 21st century.
But changes to federal policy alone will not fully address the skills disparity. As you all know, in a number of communities nationwide, forward-looking leaders from industry, government, education, workforce, and economic development have built partnerships to identify and implement local solutions to local skills challenges.
We need to understand the successful regional efforts to address the skills mismatch and replicate them nationally. The Commerce Department is doing its part through the “Communities that Work Partnership” with the Aspen Institute. At the outset, this initiative will select and support six communities that are building strong systems to enhance the competitiveness of their local workforce to meet the needs of leading local industries.
In addition to providing technical assistance, our partnership will convene the communities so that they can learn from one another and develop solutions to the skills challenges they all face. Aspen will then use the lessons learned from these initial experiences to inform and improve workforce efforts nationally and, ultimately, initiate new local partnerships across the country.
The skills mismatch is just one area for the public and private to collaborate. We also need to vastly improve the image of manufacturing. Too many young people view manufacturers as outdated factories filled with line jobs – not as innovative, inventive businesses, where workers develop and use the latest technology and build lasting, middle class careers.
To address this challenge, we started Manufacturing Day, which brought 400,000 Americans to over 1,600 events across the country last October. Thanks to the assistance and participation of many of you, this effort has started to change the perception of manufacturing for students, career guidance counselors, parents, and workers. For example, in Florida, 95 percent of student participants said they learned something new about manufacturing, and discovered how STEM subjects are put to use in advanced manufacturing industries. In New Hampshire, 88 percent of students said they were more likely to consider manufacturing careers after their experiences.
These changes in perception are the first step toward filling the skills gap. The next step is making sure young people and their families see Manufacturing Day as more than a single moment of interest, but as a potential long-term career path.
For Manufacturing Day 2015, we have set our sights higher: on October 2nd, our goal is to see more than 2,000 events take place across all 50 states. We need your help to not only make this day a success once again, but to use Manufacturing Day as a platform to roll out more programs that educate and excite our young people each and every day. We need you to start or expand your internship and apprenticeship programs. We need you to adopt a local school to create regular opportunities for student interaction and engagement with manufacturing. We need you to register your events at mfgday.com, where you can find resources and toolkits to organize your outreach. We need you to contact Erin Sparks from my team, who can work with you on launching these longer-term initiatives.
Our collective effort to attract more young people like Micah Raider to a career in manufacturing requires more than a single day of events. We need a consistent, coordinated strategy to ensure more students and young workers see a successful future in this critical sector. In an increasingly interconnected, globalized economy, it is the job of the Commerce Department to do everything possible to enable you to compete and win in markets worldwide.
And it is up to all of us to work hand-in-hand to set the conditions for manufacturing in America to thrive; to keep global markets open for your products; and to keep America open for your businesses.