Economic Development

Policy Wonks Push for Investment in “Advanced” Manufacturing

Manufacturing’s recovery in 2010-2012, compared to that of other industries. Credit: Brookings Institution

In his first term, President Obama introduced the Race to the Top competitive grant program to encourage reform of public schools. Now at the start of his second term, researchers from the Brookings Institution are recommending a similar program to spur reform of colleges and universities that teach people ready to work.

The cutely named “Race to the Shop” is envisioned as a $150 million competition that would let cities and states vie for federal funding to support long-term strategic investment in workforce development for the advanced manufacturing sector. In a prepared statement released with the briefs this week, co-author Bruce Katz describes it as a response to “one of the major barriers threatening the resurgence of U.S. manufacturing: the lack of educated workers with the skills necessary for today’s advanced industry.” (Disclosure: Katz is a member of Next City’s board).

The policy recommendation is one of three focused on strengthening the American manufacturing sector — a sctor that disproportionately affects cities (79.5 percent of manufacturing jobs are located in major metropolitan areas). By strengthening manufacturing, the briefs’ authors hope the polices will help to, among other things, ensure “that the economy actually works for working families.”

The ideas pivot on the notion that federal funding could be better steered to local projects in emerging manufacturing sectors that offer long-term social benefit as well as profit. Current practices with their “emphasis on shorter-term rates of return,” the report notes, have “served to depress investments.”

To that end, one of the proposals recommend congressional funding of at least 25 advanced industry innovation hubs themed around specific interests, some of which have an environmental silver lining such as carbon capture and storage. Modeled after the Department of Energy’s Energy Innovation Hubs program, which has its flagship site in Philadelphia, and the Department of Commerce’s National Network for Manufacturing Innovation (NNMI), spotlighted in a coming Forefront story story, the hubs would be industry-led alliances of public, private and academic actors organized regionally.

The third proposal, “U.S. Manufacturing Universities” presents a vision of federal funding for designated higher education institutions to specialize in the training of engineers for manufacturing firms. This is an opportunity to directly create good jobs, as American industry often complains about a deficit of practical engineers because our higher education system is training too few in comparison with competitors in the developed world. The proposal would provide $25 million annually to each of the 20 participating universities, which would be required to work much more closely with industry (including doctoral programs that would basically service as apprenticeship programs).

The briefs are certainly timely. The demise of U.S. manufacturing was a major theme in the 2012 election and with the recession not turning around as fast as anyone would like, few would argue with ideas for job training. Furthermore, a recent report from the McKinsey Global Institute indicates that high-tech employment will (and already does) make up a larger portion of manufacturing jobs as capital invests in greater levels of automation.

But what that means is that high-tech work, rather than the low-skill labor of the 20th century, will comprise an ever greater share of the relatively scarce manufacturing jobs of the future. Further incentives for R&D are likely to accelerate these trends as companies find more ways to automate production.

Brookings’ policy proposals would certainly be good for manufacturers and institutions of higher education, as well as those fortunate enough to land a manufacturing job — and one that isn’t paying $7.50 an hour. Brookings’ experts want manufacturing to “spawn new, good-paying jobs and industries and aid the nation’s recovery through its huge employment multiplier effects.” But there aren’t as many manufacturing jobs as there used to be, no matter how prevalent “re-shoring” becomes, and those that do exist are increasingly stratified into higher skill, highly paid jobs and low-skilled, low paid jobs, like the rest of the American economy.

Jake Blumgart is a writer and editor based in Philadelphia.

Tags: economic development, washington, d.c., d.c., brookings institution, manufacturing, bruce katz, race to the top, onshoring, energy efficient buildings hub