Manufacturing

Rob Atkinson spoke about the importance of intellectual property to continued innovation and how it fits into enabling future advanced innovation systems, especially in manufacturing, at an event held by Arizona State University's Consortium for Science, Policy, and Outcomes and George Mason University's Center for Intellectual Property and Innovation Policy.

Companies have committed more than $200 billion to U.S. manufacturing projects since the passage of the CHIPS and Sciences Act and the Inflation Reduction Act last year.

Join ITIF and OECD to explore policy questions that arose in the context of the OECD Review of Innovation Policy: Germany, but which have relevance to both the United States and Germany.

Over the last two years, the U.S. economy has added 830,000 manufacturing jobs. At first glance, this suggests a renewed strength in manufacturing. In reality, it masks a new weakness: productivity decline.

Supporting manufacturing to lower the trade deficit doesn’t have to mean the dreaded “picking winners”. It could mean an investment tax credit and much higher R&D tax credit. It could be official policy to not defend the dollar. It could mean a regulatory system that spurs innovation.

After falling from its peak of 5.7 percent in 2006 to 3.6 percent in 2019, the United States’ manufacturing trade deficit as a share of its GDP has risen to 5.3 percent in 2022 through June, its highest level since 2008 (5.5 percent).

Catherine Rampell’s recent Washington Post column parrots conventional “inside the beltway” wisdom about U.S. manufacturing but demonstrates that pundits often don’t understand real economics.

Industrial robot concentration is especially high in Michigan, where 39.5 percent of manufacturing employees had exposure to them in 2019.

The United States is addressing its anemic share of the semiconductor fabrication market (which was 40 percent in 1990) through the CHIPS for America Act and U.S. Innovation and Competitiveness Act. But while these measures are steps in the right direction, they only address a narrow set of the electronics ecosystem.

Manufacturing capacity utilization in the United States has fallen steadily since the 1970s as manufacturing relocated from the United States to regions such as Southeast Asia, and it remains 9 percentage points below its high in November 1973.