“Carpe diem, Mr. President.” That’s the concluding message to President Obama echoing his own remarks in his recent State of the Union address from George Haley, professor and director of the Center for International Industry Competitiveness at the University of New Haven, and Usha Haley, professor of international business at Massey University, Auckland, New Zealand in a post on The Hill.
In his SOTU address to Congress and the American public, Pres. Obama promised not to cede solar manufacturing to the Chinese. He also announced the formation of an international task force to investigate unfair trade practices, to be led by Deputy National Security Advisor for International Economic Affairs Mike Froman. The President and his administration have also followed up on the SOTU speech with the release of “The Blueprint for an America Built to Last,” a policy proposal that envisages building “an economy that works for everyone, one that will bring about a new era of American manufacturing, and promote homegrown and alternative energy sources.”
The Haleys are not alone in supporting the President’s position that the US government needs to do more to revitalize US manufacturing and do more to ensure that fellow WTO members do not violate internationally agreed upon WTO rules governing what’s legal and what’s illegal when it comes to international trade policy and practices.
Former Intel Chief’s Call for “Job-Centric Leadership”
Former Intel CEO Andy Grove has argued strongly for “job-centric leadership” and creation of a national economic and trade policy focused on revitalizing US manufacturing and job growth. Fostering innovation and cultivating start-ups is essential, but it’s in the next phase of growing a business where the real jobs and economic growth are created, Grove wrote in a Bloomberg Businessweek article entitled, “How America Can Create Jobs.”
“The scaling process is no longer happening in the U.S. And as long as that’s the case, plowing capital into young companies that build their factories elsewhere will continue to yield a bad return in terms of American jobs,” according to Grove.
“The first task is to rebuild our industrial commons. We should develop a system of financial incentives: Levy an extra tax on the product of offshored labor. (If the result is a trade war, treat it like other wars—fight to win.) Keep that money separate. Deposit it in the coffers of what we might call the Scaling Bank of the U.S. and make these sums available to companies that will scale their American operations. Such a system would be a daily reminder that while pursuing our company goals, all of us in business have a responsibility to maintain the industrial base on which we depend and the society whose adaptability—and stability—we may have taken for granted.”
Former SEIU Chief Andy Stern’s Call for a “Pro-American Trade Policy”
Participating in a McKinsey Global Institute panel discussion on the topic of “Job Creation and America’s Future,” former Service Employees International Union (SEIU) president Andy Stern quickly laid out the framework of a six-point plan that he believes is critical if the US is to reverse the depressing decades-long trends in income, career, and job growth. Crafting and enacting a “pro-American trade policy” was one of the six.
According to Stern, “We need a pro-American trade policy, when 90% of Microsoft software in the Chinese government is pirated. China has a pro-China trade policy, Germany has a pro-Germany trade policy. We have a very idealistic trade policy that’s not pro-American. I’m not talking against trade; I’m saying a pro-American trade policy.”
Silicon Valley Entrepreneurs’ “Manufacture and Grow Local Solar PV” Business Model
‘It’s surprising how deeply impressed is the belief that in order to manufacture almost any type of electronic goods cost-effectively, it has to be done in China or elsewhere in Asia — especially in Silicon Valley,’ Cupertino-based inventor and entrepreneur Kent Kernahan recently stated in a CleanTechnica interview. Worse, this belief is in large part a myth, according to Kernahan, who pointed out that, contrary to popular belief, many of the high-tech electronics manufactured in China entail a significant amount of manual, as opposed to automated, mechanized labor.
Kernahan is a driving force behind “Inventor Nationalism,” a nascent movement that’s promoting the idea that the very small percentage of US inventors responsible for many of the world’s innovative technologies should leverage their patent and intellectual property rights by allowing them to be used first and foremost in the US for a period of time before releasing them to foreign business groups. The concept is catching on, having recently been mentioned on an episode of ABC’s “Shark Tank.”
Having participated in numerous Silicon Valley start-ups, most recently with ArrayPower, Kernahan and his partners at IdealPV and Locally Grown Power are taking their local, community-centered manufacturing business development model out into the field for testing. They’ve struck up a partnership with Mansfield Ohio’s North End Community Investment Collaborative (NECIC) and are working the local municipal and county government on public-private ownership and establishment of a silicon solar PV assembly plant.
Hit hard by the loss of auto industry and other manufacturing jobs, the plant is to employ local area residents to assemble and install IdealPV solar power systems on local government and community buildings and houses. People with the necessary, or readily adaptable, metal, trade and manufacturing skills and experience are readily available in and around Mansfield, according to Kernahan, as they are in communities across the Midwest.
IdealPV supplies its intellectual property, technical and manufacturing development expertise, while the local community supplies the labor, manufacturing space and capital equipment. The real beauty of the business model, according to Kernahan, is that the solar panel plant doesn’t even have to sell its panels — it can offer to install them free of charge. How’s that possible? It boils down to the concept of the economic multiplier.
US Manufacturing, Jobs and Economic Multipliers
By keeping manufacturing local, good paying jobs will be created, and most of that money will be spent locally. Compounding the effect is the savings realized by local residents, businesses and government, whose electric bills will be reduced by having solar PV systems producing clean, renewable electricity for 20-30 years. Most of the savings will also flow through the local economy. Finally, the local government, which is so strapped for cash that’s it proposed shutting off 15% of its public streetlights, will collect tax revenues from the manufacturing facility and increasing local business activity.
Manufacturing can boast to be the highest economic multiplier of any economic sector. “Reports from the National Association of Manufacturing (NAM) indicate that each dollar’s worth of manufactured goods creates another $1.43 of activity in other sectors, twice the $.71 multiplier for services,” according to the Advanced Manufacturing Workforce Strategies Toolkit.
The figures are similar when it comes to multipliers and job creation. “Each 100 jobs in manufacturing supports 2.91 jobs elsewhere in the economy, compared to 1.54 jobs in business services and .88 jobs in retail trade,” according to Josh Bivens of the Economic Policy Institute in “Update Employment Multipliers for the U.S. Economy (2003).”
That’s the beauty and power of a vital manufacturing sector, a traditional economic and social anchor that US political and business leaders have cast aside and all but forgotten.
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