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As the U.S. grapples with who will take the helm of the U.S. presidency, electronics manufacturers around the country are grappling with which policies and ideas would promote growth and innovation in the sector. Many agree that a push for “made in America” policies and incentives might be useful. Often, they point to similar initiatives used by other countries, including China and India.
“The next administration needs to carefully consider the type of manufacturing that is best suited to create and expand in the USA,” said Jim Rowan, formerly CEO and COO, Dyson and COO of RIM (Blackberry). “This might not get them the popular vote, but it will help them to build a strong, sustainable manufacturing ecosystem for the future.”
To start, the country should focus on what differentiates U.S. technologists and manufacturers from those in other geographies, and that’s innovation. “The U.S. is a hotbed of innovation and creativity in just about every area, not least manufacturing,” said Dave Evans, founder and CEO of Fictiv. “Embrace that, create the right environment for transformation, and we will create a manufacturing sector that is the envy of the world.”
Many manufacturers agree that embracing automation will be a critical component to a successful “made in America” manufacturing strategy. “The candidates should subsidize and support the development of leapfrog technologies, especially autonomous manufacturing tech,” said Theo Saville, founder and CEO of CloudNC. “The factories of the future contain no human decision-making—3D files in, parts out, no people in the middle. A labor cost or skills base advantage becomes almost irrelevant in the face of this.”
In addition to bringing creative new products to customers, these investments yield huge business benefits to the manufacturing community. “Investment in innovation and digital transformation will create a manufacturing sector that is predictable, adaptable, and resilient to any disruption that might occur in the future,” said Mattias Andersson, founder and CEO of MTEK. “The U.S. has the largest consumer market and is a global center for innovation; those are the assets to leverage. Those are the assets that will deliver skilled, sustainable manufacturing jobs now and in the future.”
Whoever becomes the next POTUS, strong policies to support American manufacturing need to be on the agenda. “Continued expansion of the R&D tax credit, lower corporate tax rates, and increased accelerated depreciation of capital assets will continue to allow U.S. manufacturing to focus on and invest in productivity gains, which helps level the playing field,” said Brad Heath, founder and CEO of Virtex.
So far, there has been little said by the candidates in this arena. “To be successful, we'll need more than position papers and hastily assembled tariff schedules,” said Misha Govshteyn, CEO of MacroFab. “Neither candidate has set a clear set of measurable objectives similar to the ‘made in China 2025’ effort.”
The balance between tariffs leveled on other countries and taxes put on manufacturers here needs to be carefully weighed. “[U.S. government policies] should encourage ‘made in the USA’ with tax incentives and benefits designed to help the [manufacturing] company, as well as the employees,” said Juan Arango, managing director at Koh Young America. “It should find ways to make U.S. manufacturing more competitive to reduce our dependence on foreign countries where low-cost manufacturing lures away domestic manufacturing. Tariffs, although not popular by many, can level the playing field.”
“In other words, we should stop promoting policies that play to our rivals’ strengths—low wages, poor living conditions, lax environmental standards, lower individual freedoms—and start promoting policies that play to our strengths: innovation, wealth, and freedom,” added Yoav Zingher, CEO of Launchpad.build.
At least in part, a key goal should be creating educational opportunities for workers who want to become skilled in manufacturing. “U.S. government policy should promote U.S. manufacturing investment because it is key to our economy, today and in the future,” said Arango. “It needs to invest in training for skilled employees with specific incentives designed to generate interest among the next generation of employees in the manufacturing industry.”
The country needs to start pointing to rising talent at the earliest stages of their education to create a pipeline of skilled workers. “In addition to investments and incentives for the U.S. manufacturing industry, it’s also critically important that the U.S. invest in education, especially science, technology, math, and engineering (STEM) education,” said Jeff Benck, CEO of Benchmark Electronics. “This country’s technology industry has become overly reliant on foreign talent because it doesn’t have enough domestic talent to support the growth. The U.S. needs to invest in educational programs that encourage a more diverse population of young people to get involved in STEM, with a heavier emphasis on women and people of color as they are greatly unrepresented today.”
Hailey Lynne McKeefry is a freelance journalist who has covered technology and the supply chain for over three decades.