Made in the U.S. Manufacturing makes a return, Bank of America Merrill Lynch White Paper
MAKING IN AMERICA: U.S. Manufacturing Entrepreneurship and Innovation, The Office of the President Summarized below:
Since the end of the recession, U.S. manufacturing is once again on the upswing and plays an outsized role in supporting and driving American innovation.
· Manufacturing represents 12 percent of U.S. GDP, but it contributes 60% of all U.S. research and development employees, 75% of U.S. private sector research and development, and the vast majority of all patents issued in the United States.
· U.S. manufacturing firms are more innovative, on average, innovating at more than twice the rate of other U.S. businesses – with over 30% reporting an innovation between 2008 and 2010 alone compared to only 13% for other U.S. businesses.
· Firms are increasingly reconnecting production with development and design because the iterative innovation cycle of engineering and production on the shop floor is responsible for a range of breakthrough technologies.
U.S. manufacturing is more competitive than it has been in decades:
· Manufacturing output has increased 30% since the end of the recession. The U.S. has added 646,000 manufacturing jobs since February 2010, with the sector expanding employment at its fastest rate in nearly two decades.
· There are signs that this expansion in manufacturing could accelerate. Average annual weekly hours for production workers in the manufacturing sector have climbed to 42.1, the highest level since 1945.
· In addition, manufacturing supports millions of additional jobs across its supply chain and in the communities in which it locates.
· Global executives surveyed by AT Kearney across all industries and geographies ranked the U.S. #1 as the destination for business investment, the first time that the US occupied the #1 spot in the survey since 2001.
· 54% of U.S.-based manufacturers surveyed by The Boston Consulting Group are actively considering bringing production back from China to the United States, up from 37% only 18 months prior.
· The U.S. workforce is among the most skilled and productive globally – more than 30 percent more productive than Germany’s and nearly twice as productive as South Korea’s.
· With a century of reserves, natural gas costs one third as much here as it does in Asia and our low energy costs overall are estimated to save U.S. manufacturers nearly $130 billion annually compared to Europe.
· Locating in the United States provides unparalleled access to the largest consumer market in the world and rapid access to global markets, with the United States having free trade agreements with 20 other countries and the most rapid export clearances of the 185 countries surveyed by the World Bank.
· The United States is also the global leader in patents, producing nearly 30 percent of all patents worldwide, and has 15 of the top 25 leading research universities.
New technologies are creating a new source of advantage for U.S. manufacturing:
· Access to new technologies for rapid prototyping – from laser cutters to CNC routers to 3D printers – is inspiring a new movement of Makers, inventors, and entrepreneurs. The ability to rapidly and affordably test and customize places a premium on locating close to American markets and opens new doors to entrepreneurship and innovation in manufacturing.
· Additive manufacturing, also known as 3D printing and scanning, can reduce the cost of designing and prototyping automobile components by as much as 99%
· Do-It-Yourself (DIY) electronics kits and low-cost microcontroller sets, like those produced by Arduino, Sparkfun or Adafruit, can power complex electronic gadgets ranging from cell phones to satellites. The number of Arduino boards sold more than doubled between 2011 and 2013 to over 700,000 boards.
· The nation’s historic strengths in software (the U.S. produces 80%) and digital design are positioning it to lead in an era of connected devices and of products that are digitally designed, tested, and assembled before taking final form on the shop floor.
· The rapid development cycles and reduced costs enabled by these tools make it even more attractive to locate near the United States’ large domestic market in order to meet changing consumer tastes. Wal-Mart credits this proximity to its customers for part of its decision to bring back $50 billion in production to the United States.
Existing manufacturers have accelerated investment in research and development while the rate of growth for entrepreneurs is at its fastest pace in over 20 years.
· Already globally the largest source of manufacturing R&D, the R&D intensity of U.S. manufacturing since 2003 has grown faster than that of any other country save South Korea, growing from 8% to nearly 11%.
· The United States invests twice as much as any other nation in research and development. Manufacturing R&D investment in the U.S. is now at an all-time high at $202 billion, or 75% of total U.S. private sector R&D.
· The precision machining industry grew its investment in U.S. R&D by 48% or nearly $5B between 2010 and 2011 alone.
· Established manufacturers, such as Ford and GE, are taking advantage of new technologies like rapid prototyping networks to develop new products. Ford has partnered with TechShop and increased patenting by 50%. GE is sourcing new designs and ideas from Local Motors’ Microfactories.
Entrepreneurs are starting new manufacturing firms at fastest rate in two decades:
· For the first time since 1999, the number of manufacturing establishments is growing, with more than 1,400 new establishments opening in 2013. This expansion is widely spread across 19 out of 21 major manufacturing industries.
· At the end of 2011, the growth rate of new firm creation in manufacturing, a leading indicator of entrepreneurship, reached its highest levels since 1993, growing 6% year over year.
· Rapid prototyping networks are providing platforms for new entrepreneurship.
· A national movement is brewing of Makers, tinkerers, and inventors who are scaling up from DIY to Made in the USA through networks and platforms like Etsy, Tindie, Indeigogo, Quirky, Grommet, and Kickstarter.
The Administration is laying the foundation for a revitalization of American manufacturing, shoring up the central pillar of America’s innovation enterprise.
· The Administration has increased federal investment in manufacturing R&D by 35% from $1.4B in 2011 to $1.9B in 2014.
· Through the National Network for Manufacturing Innovation, the Administration is bringing together private industry, leading universities, and federal agencies to co-invest in emerging technologies like additive manufacturing, lightweight materials, next-generation power electronics, and digital design and fabrication.
· The Administration has made strengthening and expanding the Manufacturing Extension Partnership a core priority. The MEP is a nationwide system of centers in every state, and engages over 30,000 small and medium manufacturers annually to overcome the challenges faced by firms in the commercialization of the latest technologies.
Through these investments and a continued focus on strengthening domestic production, the Administration is laying the foundation for a revitalization of American manufacturing, shoring up the central pillar of America’s innovation enterprise.
Other good sources of data on the growth of the US manufacturing sector include: