Is the Concept of a "National Manufacturing Technology Strategy" Dead in the Water?
Monday, August 1, 2011 at 01:03PM
Assuming that the immediate threat of a US Government financial default is at least temporarily postponed, can we now return to considering other issues of national strategic importance?
Consider the idea of a “national manufacturing technology strategy” as put forward by Robert Atkinson in MIT’s Technology Review (beware of the Review’s onerous online registration requirements). Atkinson says:
America cannot hope to compete with low-wage nations without robust efforts to boost productivity and spur the development of complex products that are hard to produce there.
Also:
When companies invest in product and process innovations, spillover effects can benefit other firms and the entire economy. But firms can’t capture all the benefits of their own investments in R&D and new capital equipment, which means that left on their own, they will produce much less innovation and productivity than is optimal for society. This is the key rationale for government support of manufacturing-technology research and for policies such as the R&D tax credit and accelerated depreciation of investments in new equipment. Moreover, small and medium-sized manufacturers often lack the resources to stay abreast of the innovative technologies and processes constantly emerging around the globe.
These ideas echo what Dow Chemical’s Andrew Liveris has been saying in books and speeches as described in Dow Chemical’s Andrew Liveris on the Future of Manufacturing — and Making America Competitive Again. Liveris, co-chair of the Advanced Manufacturing Partnership (AMP), promotes a national strategy with these goals:
The goal of the new AMP is to invest in the emerging technologies that will create high quality manufacturing jobs and enhance the United States’ global competitiveness. Obama’s plan, which leverages existing programs and proposals, is to invest more than $500 million to jumpstart this effort. Investments will be made in the following key areas: building domestic manufacturing capabilities in critical national security industries; reducing the time needed to make advanced materials used in manufacturing products; establishing U.S. leadership in next-generation robotics; increasing the energy efficiency of manufacturing processes; and developing new technologies that will dramatically reduce the time required to design, build, and test manufactured goods.
All well and good, of course. I’ve agreed with these ideas ever since hearing Liveris speak almost 5 years ago on the importance of manufacturing to the economy and the need for a national strategy to improve energy access, education, infrastructure, and government-private sector collaboration.
Unfortunately, having listened to the rancorous debate on the debt limit, and having watched how amendments are being introduced in Congress to hobble — in the name of “reducing Federal intrusion” — the ability of agencies such as the EPA in their enforcement of the law, I have a hard time believing that any serious Federal money or regulatory emphasis can now be placed on implementing a “national manufacturing technology strategy” of the type Atkinson promotes.
I hope I’m wrong about that, but just as I believe that our expenditures on wars in Iraq and Afghanistan doomed our ability to fund a follow on to the Space Shuttle, our current ideology-driven economic shackles may also prevent us from doing what is needed to ensure that the U.S. manufactures things that we can sell to others.
Copyright (c) 2011 by Dennis D. McDonald
Reader Comments (2)
Central planners, master planners, whatever you want to call them…they are universally ignorant of the real ways of the world. Their decision making is motived by politics and cunning, driven to consolidate organizational influence through the apparatus of bureaucracy. They don’t produce anything and they don’t have the foggiest idea how to produce anything.
Does P&G really need the government to tell it how to create more “social value” from its toilet paper factories? After all who is the expert in the chemistry, industrial processes, raw materials, consumer demand, or whatever aspect you want to look at? The egghead bureaucrat or the guy who makes the product?
We defiantly do not need a national strategy for manufacturing or innovation or any of that. It’s been a disaster every place it’s been tried, ref: Japan in particular. The only thing you can guarantee with such a strategy is that it will be dead wrong and will prevent the normal forces of supply and demand from working as they should. If anything, we need less “help” from federal bureaucrats.
Long term, China will fail because of this. Right now they are riding a wave, but the central planners are committing to national strategies that over time make China ridged and unresponsive to change. I’ll take Silicon Valley style VC powered entrepreneurism with thousands of new formations and bankruptcies every year over China’s national strategy.
Seriously, does anyone actually think Governments are trustworthy to make good decisions or provide advice on efficiency? Laugh. Has any Government ever systematically done anything efficiently that wasn’t an accident or a one-time fluke?
Great comments as usual.
As for an example of a Government investment that turned out right, perhaps the Internet would be a good example? Also, check this out as an example of what happens when industry operates in its own short term self interest: http://www.forbes.com/sites/stevedenning/2011/08/17/why-amazon-cant-make-a-kindle-in-the-usa/
- Dennis