October 3, 2007

The Dollar and Exports

From The Financial Times, "Fed sanguine if dollar descent stays orderly."

The weak dollar - which last week sank to its lowest level since the era of floating exchange rates began a quarter of a century ago - carries with it both benefits and potential risks for the US economy.

Most commentators emphasise the benign consequences for the US, while noting that it could have adverse effects on its trading partners, in particular in Europe.

This is essentially a current account perspective. A falling dollar - plus slower growth in the US than the rest of the world - boosts net exports and should help offset the effects of the US housing recession on overall growth.

David Heuther [sic], chief economist at the National Association of Manufacturers, says: "Exports remain strong and are holding the economy above water."

This may overstate the case but virtually all economists are expecting a positive contribution to growth from exports. Equity investors also appear bullish, buying into large cap export stocks.

It's Huether, u before e. And to respond to the Financial Times' response, where would the economy be without exports?

More evidence on behalf of the Peru, Colombia, Panama and South Korea free trade agreements, in any case...

Posted by Carter Wood at 8:45 AM | Click here to comment | Send to a Friend

July 29, 2007

Ocean Marvel

If you drive a car, ride a bus or plane, use an elevator, or have typed on a keyboard to get to this blog, then you probably have taken all those things for granted. That's the way of today's America--we have more than any civilization in history and yet we take for granted--and sometimes seem to punish--those who give us the wherewithal for all this bounty.

You realize how poorly we understand how our energy got to us when you a read a story about today's exploration for oil and natural gas at the bottom of the oceans.

Reporters Russell Gold and Ana Campoy brilliantly captured this world of oil and gas exploration that most of us never see in an article recently in the Wall Street Journal and in other newspapers. I'm including a link to one of the articles. It profiles The Independence Hub, floating in the deepest water of any offshore platform. It will pull up a billion cubic feet of natural gas every day! This one platform will produce enough energy to heat nearly 5 million U.S. homes.

The reporters want to tell us how the biggest rigs are used less as smaller reservoirs of gas and aging fields can best be tapped by underwater well heads. Moreover, by having the wellhead gear on the seafloor, it's out of the way of hurricanes.

Unfortunately the link above does not include the graphics and map that accompanied the WSJ piece on July 26. For me, they were as interesting as the analysis that went with it. Here's what was in the graphics--

The map shows the Gulf of Mexico overlaid with a grid that shows where some of the most interesting oil and gas drilling it taking place, tiny specks not far from the delta of the Mississippi River. The illustration show one of the floating rigs that operates there--who knew these gargantuan steel structures could float?!!--and the spaghetti of umbilical cords that carry orders, chemicals and electricity down two miles to the well heads on the sea floor. Here are the steps shown in this very effective drawing by Erik Brynildsen:

Step 1: The Platform. Operators monitor production and send orders to the wellhead. If you've been on an offshore platform, you know this is much bigger than a lego block.

Step 2: 125 miles of "umbilicals" carry orders, electricity and chemicals down to wellheads. Computers monitor all of this activity and ten different fields feed into the Independence Hub.

Step 3: Modular wellheads or "trees" regulate flow and pressure with valves and chemicals injected into the well. How do they get these well heads atop the pipelines when it is two miles down from the ocean's surface? I have trouble getting a horseshoe on a metal pole from twenty feet. I can't imagine the engineering skill to not only match up the wellheads, let alone the drilling that goes below the sea floor to the deposits of oil and gas. Could you do this?

Step 4: Flow Lines. They send production from wells through centralized manifolds and up to the platform.

Step 5: It handles separation of gas from water, sand, etc. brought up from the sea bed. In other words, natural gas does not just flow up ready to get burned in your oven. It's got to be transformed, clean up and sent onward to customers like you and me.

Step 6: The gas is sent on to the mainland via pipeline, also running along the bottom of the seabed.

Who takes all this for granted? Most of us who have never seen it. And then there's those members of Congress who not only take all this for granted, but they want to penalize those companies that have the brains and bucks to get all this done.

By the way, if you wondered why I mentioned the keyboard in the beginning, it is because it is made from plastics and of course they are made from chemicals that originate from natural gas feedstocks. There's another story there, and if you want to know how we are driving U.S. manufacturing abroad because of our short-sighted natural gas policies, read The Manufacturing Institute's newest report on that topic--The Hidden Backbone of U.S. Manufacturing-- by clicking here.

Posted by Bill Canis at 9:14 AM | Click here to comment | Send to a Friend

May 6, 2007

What is Manufacturing Anway?

What is manufacturing anyway? It's the transformation of one thing into something more complex. That can sound esoteric to someone outside of the industry.

So it was really interesting to see some United Technologies ads that give everyone an insight into the complexity that is today's manufacturing. One of the ads I saw was a cutaway of a bus that highlights its fuel cell technology. Now I ride one every weekday to work, but I don't usually think about all the elements that make that bus run. United Technologies' ad -- click here to see it -- reminds us that today's manufacturing is high-tech and marshalls hundreds if not thousands of parts into the products that we use everyday to make life better and easier.

Be sure to take a look at the United Technologies ad and, in the future, we'll highlight more ads that give a good insight into American industry.

Posted by Bill Canis at 10:43 AM | Click here to comment | Send to a Friend

April 24, 2007

All-Consuming Myths

Anyone reading this article and, indeed, every single person you see today, has used some kind of energy. If you work at home, you have probably boiled water for coffee or tea and have turned on your computer to read this blog. If you commute to work, your car, bus or subway uses energy and so does the elevator in your office building. Typing these words uses energy. Energy is what makes our modern economy tick.

So you'd think that everyone would know a lot about energy, wouldn't you? In fact, most Americans are in the dark about it and a new study from The Manhattan Institute shows just how ignorant many are about this important part of everyday life and our hi-tech industrial economy.

Partnered with Zogby International, the Manhattan Institute polled 1,000 Americans on topics from the sources of U.S. energy supply to environmental impacts of energy use. The result is Energy and the Environment: Myths and Facts, authored by Max Schulz. One of the big myths, according to the report, is the belief that the U.S. economy is based on oil. In fact, the report points out that 60 percent of all U.S. energy comes from non-oil sources such as natural gas, coal and nuclear power. Here is a sampling from this fascinating report:

Myth: 55% say Saudi Arabia is the largest oil exporter to the U.S. when in FACT, Canada sells us more foreign oil than any other country.

80% said the accident at Three Mile Island was fatal while the FACT is that no one died from that nuclear power plant incident almost 30 years ago.

60% believe the Kyoto Protocol requires all countries to cut emissions, while in FACT, China and India and other large emitters are exempted and the cost to the US economy has been estimated between $13 billion and $397 billion in 2010.

The report's author notes appropriately that we won't have the right policies in place if the data underlying today's energy use is misunderstood. Read the news story from The Examiner, by clicking here.

Posted by Bill Canis at 9:49 AM | Click here to comment | Send to a Friend

March 27, 2007

Embrace the Machine, Even Very Tiny Ones

Glenn Harlan Reynolds, aka Instapundit, provides the first piece in a four-part series on technology in today's Examiner with a column entitled, "Embrace the machine that works better than magic." He offers a quick take on four technologies that hold the promise of quick advances, innovation "that might not be magical themselves, but that would work magic on our economy and well being."

Better batteries, necessary to make electric vehicles more efficient.

Rapid Health Response, i.e., the ability to respond to disease outbreaks or bioterrorist attacks with alacrity.

Nanotechnology, taking the next step to "molecular manufacturing" -- "making things by putting the individual atoms and molecules where you want them."

Better nuclear power: Newer, cleaner, safer and cheaper nuclear power technologies, such as pebble-bed reactors.

We highlight Reynolds' piece -- and anticipate the next three days of the Examiner series -- because manufacturing plays a key role in developing and using all these technologies, one essential element in ensuring America's future prosperity.

Plus, Reynolds always displays an admirable joie de vivre about these things. Not enough joie de vivre in Washington these days.

Posted by Carter Wood at 9:13 AM | Click here to comment | Send to a Friend

March 7, 2007

Corporations: Not Just 'Stuff,' But Freedom

The annual dinner of the American Enterprise Institute took place tonight at the Washington Hilton, with the AEI's Irving Kristol Award being presented to the Bernard Lewis, the renowned historian of Islam's interaction with the West. Lewis' academic work and topical commentary have gained new value in the wake of the terrorist attacks of September 11, 2001; it was truly an honor to hear his address, "Islam and Europe," not to mention edifying to have it come from a 90-year-old. [UPDATE (4:10 p.m., March 8) Bernard Lewis' speech will be on C-SPAN Book TV this weekend.]

Viewing the evening with a NAM perspective, we were also impressed with the opening comments of Christopher DeMuth, AEI's president. In a mild tone, DeMuth gave a full-throated defense of the corporation's role in modern society, engaging an issue that some would deem beyond the political pale. After thanking the sponsors, he observed:

There is a movement afoot to treat the political views and interests of corporations as inherently suspect and in need of official supervision. Senators are warning firms not to advance incorrect views. Pension funds, the accounting profession, the plaintiff's bar, are being deputized in various efforts to bring the corporation to political heel. This is a pernicious development.

The corporation is the transmission belt for much of our safety, prosperity and progress. It is the place where many Americans pursue their vocations and spend most of their lives. And, it is the locus point of tremendously valuable social intelligence, information about society, economy and technology that is, to a unique degree, generated by reality and analyzed with a view towards something other than politics.

The rest of his comments are in the extended entry below.

Those who objurgate [the] corporation as an independent source of ideas and political activism include the major media, themselves corporations, and political representatives, themselves eager for corporate funding. But the Constitution affords them no monopoly on policy debate, and for them to acquire one would be dangerous to our social climate and political health.

Corporation is a vital reality-based counterweight to those for whom politics is primary. We all depend on you not just for our "stuff," but for our freedom, and we’re counting on you to hold your ground.

A valuable defense of a valuable institution -- the American corporation. Thanks, Mr. DeMuth.

Posted by Carter Wood at 11:16 PM | Click here to comment | Send to a Friend

January 4, 2007

Risking $21 Billion

Everyone loves to talk about research and development, innovation and the next generation of products that will provide high-paying jobs to Americans. You won't find a politician anywhere that says they don't value these goals. In fact, too many people take it for granted that new products and processes will just gush out of manufacturing and business, regardless of what elected officials do otherwise.

It's too bad that when push comes to shove, so many elected officials don't have a clue about what it means to invest, innovate and deploy new technology and products. Maybe it's because so many elected officials' only work experience is in the law and they have limited hands-on knowledge about spurring new inventions.

The Examiner newspaper has done us all a service this week by running a column by Paul Howard at the Manhattan Institute, showing just what kind of costs go into some innovations. It's why strong intellectual property laws are important--to help companies recoup expenses for products that never make it to market--and why a permanent R&D tax credit makes so much sense to an economy like ours.

Paul Howard's article focuses on Pfizer's work to develop a "good cholesterol" boosting drug, which they named "torcetrapib". After 15 years of research and patient trials involving 15,000 people, they learned a lot about the downsides of this potential new drug and pulled it. That cost Pfizer $800 million in direct research costs and $20 billion in market capitalization. Pfizer's case is not unique: it is said that it takes about an investment of about $1 billion and a decade of work to bring any single medicine to market these days. A nation that truly values innovation will want to encourage and promote that kind of risk-taking because of the benefits that flow from the new pharmaceuticals.

Howard says, "thanks to Pfizer's woes, Congress has a bird's-eye view of how difficult and expensive it is to develop new medicines, and why better science--and not more regulations--is what is really in the public's best interest." I also liked his wrap-up where he points out that, "innovation can only move as fast as science. If Congress is serious about promoting long-term drug safety, and not just scoring cheap headlines, the best thing it can do is fund the FDA's Critical Path project. This project aims to develop scientific tools that can transform the hit-and-miss process of drug development into one defined by more empirical standards."

Amen to that and if you want to read the complete article, click here.

Posted by Bill Canis at 8:13 AM | Click here to comment | Send to a Friend

December 29, 2006

Manufacturers Save the Banks

If you keep money and valuables in a bank or bank vault, you have probably felt pretty secure in keeping them there. Of course, there are today's hackers and phishers who try to gain access to electronic accounts, but today we are taking a look at would-be robbers who want to get their hands on real cash and jewelry socked away in a bank.

Today we take this kind of security for granted. Yet it wasn't always the case that banks were so secure so we welcome a new book that describes how bank lock innovators, including the Diebold Co. in Canton, OH, invented and manufactured sophisticated, secure locks beginning in the late 1800s that made bank vaults truly secure. Aptly named, American Genius: Nineteenth Century Bank Locks and Time Locks, the authors (father and son team of John Erroll and David Erroll) chronicle the "clever design, intricate craftsmanship and fine-grooved machinery that goes into sealing up valuables behind thick walls and fiendishly difficult-to-open doors," as one reviewer put it.

Linus Yale invented a Double Dial bank lock in 1863 which revolutionized the bank lock business with his innovation of using 100 million possible combinations. It was so unique that it won a silver medal at the Paris Exposition in 1867. Of course, banks weren't the only customers for these locks. So were companies that stored a lot of cash and even the U.S. Treasury. The book is filled with beautiful photographs showing the ingenious inner workings of these locks and the handcrafted artistry of decorative motifs and even folk-life scenes.

The Wall Street Journal reviewer of this book concluded: "such artistry, minute and meant to be hidden, reminds one of the decorative carving high up on skyscraper ledges: beauty that few will see. Never have the nuts and bolts of capitalism looked so good." One might say that never have the nuts and bolts of the manufacturing process looked so good, for it was the manufacturers who innovated and made these designs into working reality. That's what manufacturers do, even today. And we wish every one of these indispensible innovators a Happy New Year!

For a full review of the book, check out Stuart Ferguson's column on page P9 of the December 2, 2006 Wall Street Journal. Click on the book title above for a short description of the book and a picture of its cover on Amazon.

Posted by Bill Canis at 7:30 AM | Click here to comment | Send to a Friend

December 26, 2006

Pennsylvania Manufacturers Hear the Innovation Challenge

I was with some manufactures in Colorado Springs a while back. They had gotten together for the first time to talk about how they might be more effective as a business community after a lot of them were hammered by the downdraft in electronics earlier in this decade. I thought it was interesting that they identified as their top goal ways to be more innovative.

Fly across the country now to Pennsylania and that same topic is on the minds of Keystone State manufacturers. A recent issue of PA Manufacturer had a very good article about the innovation imperative. Appropriately enough, it is titled, "Open Your Mind to Innovation: See How Formalizing Innovation Can Create a Whole Other Paradigm for Your Manufacturing Outfit."

This article, by Evan Pattak, shows how companies can build innovation into their other processes and faults those executives who only think innovation is sparked by a eureka moment and not cultivated. They take a look into Wilton Armetale in Lancaster County that got a group of employees together for their "Skunk Works" meeting to brainstorm about "off-the-wall product and distribution concepts." Ken Lefever, the company's president and CEO, says "One of our rules is: no idea is a bad idea. We don't laugh at it. Skunk Works determines if we will move forward."

While this sounds like something everyone would do to envision their next generation of products and processes, it appears that what Wilton Armetale is doing is somewhat unique. The PA Manufacturer article says that too many companies are only focused on controlling costs and too few have an innovation process that should include these elements:

* talk to customers about current products to gain insight on how they might be improved or where there is gap
* measure results such as time to market for a new product or set a revenue goal
* question everything; an outside facilitator might be useful so a company can think out of the box.
* create a culture of innovation by being open to suggestions from all parts of the company
* designate a process change leader.

If you want to read the whole article, click here and go to page 6.

Posted by Bill Canis at 9:51 AM | 1 comment; click here to read it or submit your own! | Send to a Friend

October 26, 2006

Hofmeister's Steps to Energy Security--Part 3 (of 4)

This week, Shell Oil Co. president John Hofmeister spoke to the National Press Club with his strategy for energy security. He avoids calling for "energy independence", by the way, because he thinks it is naive to think that we could every go solo on all our energy, considering how much is already imported. But his plan would give us greater diversity of energy resources and more security in the long run. Earlier this week we blogged on the top steps in Mr. Hofmeister's energy plan. Here are the next three:

* Develop other forms of energy, such as wind and solar. Shell is investing in new wind farms across the country, including new electricity-generating facilities in West Virginia and Hawaii. Shell is also investing in solar, including a new technology he referred to as copper indium diselenide technology.

* Build a hydrogen economy. Shell has partnered with General Motors on hydrogen fuel cell vehicles. Shell powered hydrogen vehicles were parked outside the Press Club and Mr. Hofmeister made it clear that Shell wants to be in the lead on this new fuel.

* Emphasize energy efficiency. He calls for a change in American culture and a new drive to redesign energy-using vehicles, homes and workplaces to help reduce the use of oil and gas to power them.

Posted by Bill Canis at 11:55 AM | Click here to comment | Send to a Friend

October 25, 2006

Hofmeister's Steps to Energy Security--Part 2 (of 4)

Yesterday we blogged on remarks that Shell Oil Co. president John Hofmeister delivered on Monday at the National Press Club. Mr. Hofmeister's viewpoint and recommendations should be read by any American who drives a car, rides a bus, uses an elevator, has refrigerator and works in a heated home, school, office or factory.

His first two steps toward energy security were that we should continue to seek new conventional oil and gas sources (such as the ones recently announced in the Gulf of Mexico) and that we should utilize the Colorado oil shale deposits. Now let's summarize his next three recommendations for a better U.S. energy future:

* Use more coal. Technology has advanced to the point where coal can be used more extensively without the environmental downsides. The United States is king when it comes to coal because we have so much of it and using it this way makes sense.

* Use natural gas more effectively. American industry needs natural gas to operate. In fact, manufacturers use one-third of all the natural gas produced here. If we want a strong manufacturing sector, we need more of this fuel to keep growing. It's particularly important for the petrochemical, fertilizer and steel industries. Mr. Hofmeister pointed out the limitations due to Outer Continental Shelf leasing restrictions and their obvious constraint on supply and called for more LNG (liquefied natural gas) facilities too. After all, the United States has the same number of LNG ports as South Korea.

* Go after alternative fuels. Shell is a major investor in cellulosic ethanol, which can be made from straw among other things. Attending the Press Club luncheon was their partner in this endeavor, an executive from Iogen, which leads in development of this kind of ethanol.

Posted by Bill Canis at 11:25 AM | Click here to comment | Send to a Friend

October 24, 2006

Hofmeister's Steps to Energy Security--Part 1

Energy drives American industry and fuels our offices, schools and transportation system. Too many people take it for granted and few understand what the real choices are to reach greater energy security.

One executive has a clear and focused plan and he was at the National Press Club yesterday discussing it. John Hofmeister is president of Houston-based Shell Oil Company and he gave a compelling address about Steps to Energy Security. Mr. Hofmeister is not a believer in "energy independence" by the way, which he says is a naive belief that we can go it alone on energy. We already import too much, he says, to make that concept a realistic objective. But he does believe we can do a lot more to ensure a secure supply of energy. That's why Shell has launched a 50-city tour to talk about energy with Americans of all walks of life. Getting back to yesterday's remarks, the top two items on his list are:

* continue to bring conventional oil and gas to market, such as the new finds in the Gulf of Mexico. The easy oil and gas is pretty much running out, but new technology is enabling Shell and other companies to locate and bring to market oil that would have been impossible to drill a generation ago; and

* focus on oil shale in Colorado, where there may be as much as a trillion barrels of oil. Once again, new technology is being tried that won't require quarries to mine the oil shale and extract it from the rock. Instead, Shell is piloting an in situ approach that would heat the oil in the rocks and allow it to be extracted in a conventional way. They hope to have this new technology perfected by 2010.

Posted by Bill Canis at 11:56 AM | Click here to comment | Send to a Friend

October 19, 2006

Great Leap Forward

Decades ago, Mao launched China on a Great Leap Forward that was anything but great. It was more of a leap into an abyss.

Today's Chinese leaders are smarter. For one thing, they don't take manufacturing for granted like too many Americans do. They want it. They nurture it. They attract it. They must have studied how U.S. manufacturing became a global power, because they are taking pages from the U.S. innovation play book.

The latest news about this genuine Great Leap is from the World Intellectual Property Organization (WIPO). Generally, we might think that a group like WIPO would be complaining about intellectual property violations in China, because there are plenty of them. But in this report, released recently, a different picture of China's interest in IP emerged: a country that is accelerating its own patent filings.

The WIPO report says that patent filings in China increased sixfold in the past ten years, with more than 130,000 applications being filed there in 2004, the latest year for such data. That leap puts China fifth--behind the Japan, the United States, EU and South Korea. About half the patent applications were from Chinese and the rest from foreigners. So we are still ahead on this score, but China is moving up fast. Emphasizing an innovation agenda, as you have read about at other times on this blog, is critical for the United States to keep its competitive edge. Germany has displaced the US as the world's top exporter; we don't want to see that displacement spread to other key economic indicators.

Posted by Bill Canis at 10:15 AM | Click here to comment | Send to a Friend

October 12, 2006

Aspen Summit on Intellectual Property

Earlier this year, The Manufacturing Institute had the distinct honor to issue a publication authored by Professor Richard Epstein, who teaches at the University of Chicago Law School. He is a pre-eminent scholar on the topic of intellectual property and his report was widely acclaimed. If you'd like to download Intellectual Property for the Technological Age, just click on the report name and it will take you to it.

Recently, the Progress & Freedom Foundation had the good sense to invite Professor Epstein to their Aspen Summit to discuss this white paper and his overall views on intellectual property. They do great work over there at PFF and we wanted to give you an opportunity to learn yet a bit more from Professor Epstein on a topic that is vital to maintaining and advancing this country's innovation economy. Click here for the Epstein remarks.

Posted by Bill Canis at 10:39 AM | Click here to comment | Send to a Friend

September 16, 2006

Talking Turkey

The Thursday Wall Street Journal's front page story was about boat building in, of all places, Turkey. Silicon Valley entrepreneur Tom Perkins had his $80 milllion clipper, The Maltese Falcon, built at shipyards in Tuzla, Turkey.

What was most interesting about this story is that Turkey is positioning itself to be a manufacturing nation, and boat-building is only part of the picture. Furniture, denim, jewelry and other skilled trades are blossoming in different parts of Turkey. These specialized niches are creating new job opportunities and transforming Turkey into more of a manufacturing and services economy. Those two sectors have eclipsed agriculture as the largest GDP contributors. Turkey is attractive not only because wages are lower there, but because they have built an infrastructure of skilled workers, including engineers, who are eager for new challenges like this.

It's no wonder that Turkey would encourage these trends, because these new manufacturing clusters "have spawned subcontractors and suppliers around them..." We know that manufacturing has the largest mulitiplier effect of any industry and the Turks are finding this to be true as well. If you want to see what manufacturing means for the United States and the potent multiplier effect here at home, just check out our recent report, US Manufacturing Innovation At Risk (click here).

What is to wonder about is why elected officials in the U.S. don't see these links and act on them. Congress still dawdles on extending an R&D tax credit, something that should have been made permanent long ago. The American Competitiveness Initiative, proposed by the President last winter, has yet to reach his desk. Not enough has been done to provide a more secure and lower cost energy platform for US manufacturing. Other countries are trying to steal a march on US manufacturing and they will succeed if we don't take the right policy steps to bolster manufacturing at home.

Tack that jib!

Posted by Bill Canis at 9:07 AM | Click here to comment | Send to a Friend

July 5, 2006

Pass the Cornflakes!

There is almost nothing better than to start out the day with a box of just-opened corn flakes with milk. There is a freshness there that other cereals can barely match. If you are a corn flakes fan, too, you may be interested to know that Kellogg's corn flakes were invented exactly a hundred years ago in Battle Creek, MI by W.K. Kellogg.

As you probably know, his invention was a pure accident. He was trying to making something else and someone left the drier or oven on too long and suddenly there was this new thing that turned into corn flakes (or petals de Mais in French). A whole industry was spawned and the way Americans ate breakfast was changed forever. There has always been a rooster affiliated with those Kellogg's corn flakes for as long as I can remember and so this year we can also celebrate that corn flakes mascot, Cornelius!

By the way, it has struck me how innovations sometimes seem to come in batches. In a truly serendipitous moment, G.W. Maxwell invented the paper milk carton out in San Francisco in 1906 too. I blogged earlier about Mr. Peanut turning 100 this year. Back in 2003, we celebrated the 100th anniversary of some incredible manufacturing innovations: the first commercial air conditioning installed by Willis Carrier, the founding of Ford Motor Company, the first manned flight by the Wright Brothers and the first Harley Davidson motorcycle. Imagine that, all in one year.

Posted by Bill Canis at 4:00 PM | Click here to comment | Send to a Friend

May 13, 2006

Made in the USA -- Part 3

"To be competitive, we have to industrialize in ways that make us more efficient. All manufactuirng, everywhere, is becoming more efficient or it is going away." This very good insight was made by Walter Gillette, vice president of airplane development at Boeing. While his observation was made about aircraft manufacturing, it is equally true about any other kind of manufactured product you can imagine.

We learned about Mr. Gillette's views on manufacturing in an excellent series of articles on manufacturing in the Washington Times last month. Recently, I've blogged on the first two installments. Today I'll touch on the third of the four-part series that ran in April.

The only thing Sparshott missed in this piece was the role of small and medium sized manufacturers. Increasingly, the big companies are pushing the innovation down to the smaller companies. They are not just telling them what they need, they are involving them in design and planning. They should have mentioned Click Bond in this article, because they are a small company out in Nevada that makes many of the fasteners used in Boeing's planes. Take a look at this article and learn a lot about today's manufacutring that too many take for granted.

TImes reporter Jeffrey Sparshott interviewed some of America's manufacturers who are household words: Boeing, John Deere, Dell and Lockheed Martin. Each company has a diffent business line of course, but their comments are similar about how they still make product here, but are globalizing their supply chain. For example, Deere's chairman and CEO Robert Lane says, "globalization affects virtually everything we do at Deere, from supplier sourcing, to manufacturing processes, to recruiting highly skilled men and women from all over the world."

If you want a short course in today's manufacturing then this third installment captures it. There are fascinating descriptions of how Boeing is building its new 787 Dreamliner. Did you know that big planes like that have 300,000 hydraulic, electronic and interior parts and another 300,000 fasteners?! More important to you wonks out there, the article talks about how these companies seek a balance between what they make here and what they outsource to other US companies or abroad.

Posted by Bill Canis at 9:31 AM | 1 comment; click here to read it or submit your own! | Send to a Friend

May 12, 2006

The Shipping News

I thought this title for a movie was a little strange, but The Shipping News is actually a very interesting personal Odyssey. The title refers to the occupation that Kevin Spacey takes up in a fishing village in Newfoundland (where no one takes the work of the ships for granted), writing for the local paper.

Back here at home, shipping is invisible to most of us, unless we live near a large port. So most of us will be forgiven if we don't know about the revolution in shipping that changed our economy. A new book by Marc Levinson, The Box, traces this technology innovation and is worth a read, especially in light of the uproar over the Dubai Ports issue.

In a nutshell, Levinson shows how one man--Malcolm McLean--thought up a more efficient way to deliver product with the trucks in his fleet. His first shot at implementing his idea came with shipping Ballantine Beer from Newark, NJ to Miami. The old-fashioned way was to load a truck, drive it to the shipping site, unload it, store it, hoist it aboard ship. Why not just have a container that could be simply lifted right on ship and eliminate all of this? He found that it was 94 percent cheaper to do it his new way.

Still, he was bucking tradition and the unions, so it wasn't until the US government needed speed in shipping to supply the Vietnam War that his idea caught on. When it did, ports that didn't invest and appreciate this innovation whithered and new ones arose in their place. Bye bye ports in Manhattan and Broolyn, hello ports in Newark and Port Elizabeth, both in New Jersey. London shrank while Felixstowe expanded. New ports took advantage of this efficiency and so Dubai and Pusan, Korea mushrooomed.

Check out the trailer for this flick and you'll see a wonderful scene between Kevin Spacey and his aunt, played by Judi Dench, where, in exasperation, he asks, "What are we doing here?" and she retorts, "Making our future." Wow, that's what happened not ony when the container box revolutionized shipping, but what today's manufacturers are doing with the application of technology.

Posted by Bill Canis at 1:24 PM | Click here to comment | Send to a Friend

May 7, 2006

Made in the USA--Part 2

A few days ago we blogged about the Washington Times series on manufacturing. After seeing this series in April, I wonder why other major dailies don't see the value of this kind of article. The Wall Street Journal had a similar series a few years ago, so I guess we are lucky when once in a while the media giants rediscover manufacturing. Otherwise they seem to take it for granted.

Jeff Sparshoot writes in the second installment of his series about companies that are flexible and keeping their production in the United States. That makes it a contrast from his first article where he discussed a few industries like television manufacturing that have nearly gone offshore. So this second article is a welcome addition to the public's understanding about manufacturing. No doubt nine out of ten people on the street think that his first article painted the whole picture of today's manufacturing, and that's a far cry from the truth.

So take a look at installment two. Read about Zippo lighters which is moving production back here from China. Yes, back here. That's not a typo. And the lessons the machine tool industry learned about staying ahead of the curve. He interviews Wayne Fortun, president of Hutchinson Technology outside of Minneapolis that is the last US manufacturer of suspension assemblies for computer hard drives. I have a few of those assemblies on my desk from when I visited the plant a few years ago. High tech all the way, right on the prairie. Mr. Fortun says they have competed "through absolute relentless pursuit of excellence and continuous improvement", including advanced engineering and automation. And get this: Hutchinson has added 1400 employees just in the past year!

Finally, I got this excellent comment from Peter Renton, who manufactures Lightning Labels: "Some manufacturing is thriving. I am the founder of a small label printer and we are growing at 50% a year right now. The old mass production type of manufacturing is what has suffered most in this country; but custom manufacturing, where every job produced is different, is in better shape. When every job is custom, you have to be in constant communication with your customers, and I think most people here are more comfortable dealing with a US company in these situations. Also, when fast production speed is necessary as in printing, US manufacturers have an advantage over their overseas competitors." Ain't the blog great?!

Posted by Bill Canis at 1:12 PM | Click here to comment | Send to a Friend

May 5, 2006

Made in the USA--Part 1

Manufacturing output is higher today than at any point in US history. It's remarkable, but it's a fact. Many Americans think nothing is made in the USA anymore and there is a good reason that they think that way. Many of the consumer goods with which we come in contact day in and day out are definitely not made here anymore.

Last month, the Washington Times ran an excellent series of four articles about today's manufacturing. We are blogging on all four of them, starting today. In his first article, author Jeffrey Sparshott looked into some of the prominent consumer goods companies that have gone by the board. He focuses especially on "sunset industries", such as television manufacturing, which as recently as 1989 had 3,500 employees in the U.S. Now there are virtually none and the production has gone overseas. He notes that foreign goods now account for about one-third of the manufactured products consumed domestically, up from 15 percent in 1982.

Not all of U.S. manufacturing is in decline. He writes, "other industries that make products Americans seldom see in stores, such as machine shops and medical equipment manufacturers, have increased production and added employees in recent years." He interviewed NAM chief economist Dave Huether for the article, who points out that manufacturing is a "mosaic" and that it is hard to paint all sectors with the same brush.

There are a wide range of public policy steps that can be taken to bolster US manufacturing. You have read about many of them right on this blog. But too many public officials either take manufacturing for granted and think it can survive more and more taxes and more and more regulation. Or else they are beholden to other special interests who they put first when they vote. We'll have more on the Washington Times series in the next few days. Be sure and click on the link above to read Sparshott's first article. Kudos to the newspaper for putting these issues front and center.

Posted by Bill Canis at 1:29 PM | 3 comments; click here to read them or submit your own! | Send to a Friend

May 4, 2006

Energy Options Shrinking?

One of the possibilities for rescuing America from its short-sighted energy plans is the option of building ports for Liquefied Natural Gas (LNG). Indeed, Japan has two dozen of them but the U.S. has only about the same number as South Korea. For those who advocate use of clean-burning natural gas but are terrified of the thought of drilling for more of it right here in the United States, LNG ports might be seen as a good alternative. In fact, building ports here is a good idea as it diversifies the energy stream.

But news out of Indonesia last week was not promising. Indonesia is the largest LNG exporter (followed closely by Malaysia and Qatar). At a time when LNG supplies around the world are tightening, Jakarta sources said they may begin curbing shipments to Japan and elsewhere to preserve the use of the gas domestically.

Should restrictions on exports of LNG take place, then the pressure would really be on for the United States to develop its own natural gas resources in Alaska, off the east and west coast and in the western states. That's news the Sierra Club and its allies probably don't want to hear. They seem to take our energy for granted and don't want to do the hard lifting it will take to set us on a new course. Check out that cartoon that Patrick Cleary posted yesterday!

Posted by Bill Canis at 1:03 PM | Click here to comment | Send to a Friend

April 20, 2006

Stealing Your Future

If you invested your hard-earned paychecks into a piece of property and it was securely and rightly yours, wouldn't you be a little miffed if someone came along and took it or swiped some of your belongings right out from under your nose? You bet you would go after that thief with every tool at your disposal.

So how is that there are people around the world, including some in this country of ours, that think it would be just dandy to do the same thing to the intellectual property of companies and inventors? There is a chorus of voices that seem to pushing in that direction. Just as rampant theft of homes would put an end to investment in real estate, so too would a world without IP protection bring about an end to investment in new pharmaceuticals, new technology and many other products and processes that we take for granted today.

Yesterday we had a good primer on why intellectual property (IP) laws are such an important part of today's innovation economy. Professor Richard Epstein presented his white paper, Intellectual Property for the Technological Age and during the roundtable here at NAM, he drew some lessons:

* radical, discontinuous change is not desirable. While there are some oddball IP cases, by and large the overall system works very well.
* no system of government mandated compulsory licenses can ever adequately replace the current system of voluntary licensing.
* the US system of "first to file" is an anomaly and out of sync with the rest of the world. Property rights would be clearer in this global economy if the US were to align its IP system in this regard with the way the rest of the world does it.
* the United States is allowing its IP "social infrastructure" to fall behind. By that, he means we are not giving the Patent and Trademark Office (PTO) the resources it needs to handle the surge in patent and trademark applications. An innovation society would find the means to boost these resources so they can handle the greater volume of applications and get new drugs and technologies in the marketplace sooner. One hundred years ago, it took about 35 years for a new product to come on the market to compete with a new invention. Today, it is less than 3 years, so every month that an application languishes, innovation is thwarted. Let's not be "penny wise and pound-foolish."

Posted by Bill Canis at 8:01 AM | Click here to comment | Send to a Friend

April 19, 2006

The Right Policy for Our Technological Age

The President of China is in the United States and met with Bill Gates and other technology leaders. Tomorrow he will be hosted at the White House by President Bush. What issues will President Hu most likely hear at both meetings? It's likely that he will hear that US-China relations would be smoother if China could find a way to better police infringements of intellectual property rights that take place there (and in other developing countries). This is a top goal for both business and government and it's a bipartisan concern here to boot. Come to think of it, there are some political leaders of the European Union and even a few American leaders who need to hear that message and ponder what it means for the kind of high growth they take for granted.

Today, The Manufacturing Institute released its long-awaited report on why intellectual property laws and enforcement are so important to economic growth here and abroad. The author is Richard Epstein, professor at the University of Chicago Law School and a scholar at the Hoover Institution. Joining him were Michael Ryan, director of the Creative & Innovative Economy Center at George Washington University and Jerry Jasinowski, president of the Manufacturing Institute. Professor Epstein's report, Intellectual Property for the Technological Age, is a very readable white paper that answers some of today's skeptics about the role of IP in today's economy. In short, our current IP laws and enforcement are the right policies for this rapidly-changing technological era.

Check it out today and I'll blog on some of the details in the days ahead and give a wrap up of what our three panelists had to say today. In the meantime, if you can access Reuters, they filed a really good report on our event and it's worth a read.

Posted by Bill Canis at 2:21 PM | 1 comment; click here to read it or submit your own! | Send to a Friend

April 18, 2006

Protecting Manufacturing's Innovations

Strong enforcement of intellectual property laws is one of the reasons that U.S. manufacturing is highly competitive in today's global marketplace. Inventors know that their works will be protected under the law from others who might steal them and use their good ideas, hard work and investments illegally. Unfortunately, too many people in and out of government take this for granted. They shouldn't.

Tomorrow, The Manufacturing Institute, the research and education arm of the NAM, will release a new report that reminds us all about why strong intellectual property laws are important to manufacturing innovation. It's one reason that issues of counterfeiting and piracy will be at the top of the list of issues President Bush discusses with Chinese President Hu later this week. Come to the institute's roundtable tomorrow at 10 am at the NAM if you'd like a primer on this important manufacturing issue. Professor Richard Epstein, University of Chicago and Hoover Institution, will discuss his report, Intellectual Property for the Technological Age. Also on the program is Michael Ryan, director of George Washington University's Creative and Innovative Economy Center who will be discussing international trends in IP enforcement. The institute's president, Jerry Jasinowski, will moderate.

Posted by Bill Canis at 10:29 AM | Click here to comment | Send to a Friend

April 6, 2006

Pirates of the Caribbean

Johnny Depp played a riveting rogue in Pirates of the Caribbean, pitting him against a hardcore group of pirates under the command of Captain Barbossa. It was so successful that a sequel will be out this summer, once again featuring Depp as Jack Sparrow.

Sparrow turned out to be a "good" pirate who saved the governor's daughter as well as the British Navy. But generally we think of pirates like the ones he vanquished--dark forces marauding law-abiding citizens. What does this have to do with manufacturing, you ask?!

The source of manufacturing lies in innovation, new ideas, new products and processes. Often, billions of dollars are invested in products that flop. Sometimes a new idea takes off and, if it is patented or otherwise protected, will earn its inventors a return on their intellectual property investment. Increasingly, however, we hear voices saying that this is all wrong and that such advancements for humankind should be available to one and all without all the messiness of intellectual property laws. Such voices take our modern society and the manufacturing base for granted. Think Captain Barbossa.

The institute is concerned about these trends because manufacturing can't flourish without strong IP laws around the country (and in a global marketplace, around the world). So we will be releasing a new report on April 19 that addresses these concerns and we suggest you tune in that day when we have a roundtable on the topic here. If you want to attend, let us know. Take THAT, Captain Barbossa!

Posted by Bill Canis at 11:00 AM | 1 comment; click here to read it or submit your own! | Send to a Friend

March 31, 2006

Who Will Manufacture in 2010?

The new decade begins in four years and manufacturers are already planning ahead for their workforce needs in ways not seen in the past. That's because we are in the midst of the Great Baby Boomer Retirement Cycle. Millions of highly skilled Americans in all types of businesses will be retiring over the next ten years and beyond. Finding skilled younger people who want to work in careers as diverse as manufacturing and accounting is a huge challenge on the radar screen of American managers.

Just take a look at Rockwell Collins, a designer and manufacturer of communications and aviation electronics equipment headquartered in the heart of the American Heartland, in Cedar Rapids, Iowa. With the business growth they see on the horizon over the rest of this decade, they forecast that they will need a many as 7,000 new employees, not even including replacements for current workers. The company's total employment today is about 17,000 worldwide, but Rockwell Collins managers say that about 30 percent of that workforce could retire between 2005 and 2015.

That's why at National Manufacturing Week last week, the manufacturers' survey results showed that finding and training a skilled workforce was one of the top challenges. Most don't believe that they can just take it for granted that this workforce will materialize on time and with the right skill sets. If you'd like to learn more about this, be sure to read Skills Gap 2005 released recently by The Manufacturing Institute, NAM and Deloitte Consulting. It is based on a survey of 800 manufacturers and discusses the shortages and some of the ways in which manufacturers will cope with it. One of the most creative and effective steps has been the Dream It. Do It. campaign, which has been successful in Kansas City in raising the applications for technical school by 35 percent.

Posted by Bill Canis at 8:51 AM | Click here to comment | Send to a Friend

March 13, 2006

Thomas Jefferson On Science

I was walking back to the office last week and happened to find myself in front of the headquarters of The National Academies building, which houses the offices of the National Academy of Sciences, National Academy of Engineering, the Institute of Medicine and the National Research Council. The National Academies bring together experts in science and technology to advise the government, business and the public on national issues in these fields.

Right by the front door, they have chiseled a quote of Thomas Jefferson's that stopped me in my tracks: Our third president said, "liberty is the great parent of science and virtue; a nation will be great in both always in proportion as it is free." Scientific advances stem from different sources and many of them come from the manufacturing sector's R&D, which applies science and engineering continually in the search for new products and more efficient processes. How long will this fact be true in our country?

The United States has excelled in scientific discovery and application over the past century. Whether it was the Wright Brothers discovering and applying the principles of flight or the invention of the Salk and Sabin vaccines for polio, the United State has placed a high priority on the sciences. Many manufacturers are concerned that the lead we have today could evaporate if we don't focus more on revitalizing fundamental research and expand the science, math and engineering talent pools here.

Last December, at the National Summit on Competitiveness, business and academic leaders issued a statement expressing their concern about trends that would have also caught Jefferson's attention were he alive today:

--Asia now spends as much on nanotechnology as does the United States;
--Foreign-owned companies and foreign-born inventors now account for nearly half of all US patents;
--U.S. 12th-grade students recently performed below the international average of 21 countries on a test of general knowledge of math and science; and
--11 nations outperformed the United States in a 15-nation assessment of students' skills in advanced mathematics. Students in four nations had scores similar to those of U.S. students, while no national scored significantly below the United States.

To read more about these challenges that surely affect the future of manufacturing, check out the National Academies' October 2005 report, Rising Above the Gathering Storm.

Posted by Bill Canis at 4:12 PM | Click here to comment | Send to a Friend

February 23, 2006

The Future Success of Small and Medium Manufacturers

Today we are releasing at press conference at NAM headquarters a new report about the role of small and medium manufacturers in the economy. It's an update and expansion of the first such report we did five years ago. The booklet,The Future Success of Small and Medium Manufacturers, gives any reader a great insight into today's smaller manufacturers who are often taken for granted. It focuses on both the internal and external challenges they face and describes a number of policy options that will help shape a stronger future for this sector. For those who want to know what makes today's manufacturing tick, it is a good source of data on their role in the economy. But this is not just a statistical handbook. We interviewed more than a dozen small and medium manufacturers about what it is like to manage in today's global economy and their comments are peppered throughout the booklet. This is an NAM-Manufacturing Institute publication, made possible by a generous grant from RSM McGladrey in Bloomington, Minnesota. Comments welcome.

Posted by Bill Canis at 9:59 AM | Click here to comment | Send to a Friend

February 20, 2006

Happy President's Day!

Just wanted to wish you a Happy President's Day. For many who work in Washington, today is a Federal Holiday--as it should be--its appropriate to honor those that made our country great.

Having the day off, though doesn't stop us from finding someway to tie in manufacturing on this important day (this being a manufacturer's blog, of course!).

We just finished reading Founding Brothers, by Joseph J. Ellis. You may be interested to note that even in a primarily agrarian economy, as the young nation was in 1776, the founding fathers recognized the importance of manufacturing.

In Ellis' book, he discusses the final years of George Washington's presidency and notes that Washington's eighth and final message to Congress urged them to promote domestic manufacturing.

Here is the excerpt from Washington's Speech:

Congress have repeatedly, and not without success, directed their attention to the encouragement of manufactures. The object is of too much consequence not to insure a continuance of their efforts in every way which shall appear eligible. As a general rule, manufactures on public account are inexpedient; but where the state of things in a country leaves little hope that certain branches of manufacture will for a great length of time obtain, when these are of a nature essential to the furnishing and equipping of the public force in time of war, are not establishments for procuring them on public account to the extent of the ordinary demand for the public service recommended by strong considerations of national policy as an exception to the general rule?

Amazing, eh? Just a reminder that manufacturing has deep roots here in America; beginning in 1607 in Jamestown.

Happy President's Day.

PS: We are currently reading Lincoln on Leadership and searching for quotes by Lincoln about manufacturing. We know there's tones of stuff out there in The Federalist, click on the "comments" button to let us know your favorite quote about manufacturing.

Posted by Blogger's Apprentice at 8:12 AM | Click here to comment | Send to a Friend

February 17, 2006

Engine of Growth

Manufacturing is one of the primary engines of wealth generation in America. That's something that many people take for granted in this country, but abroad, manufacturing's strong role in growing economies is appreciated and cultivated.

On February 23, The Manufacturing Institute and NAM will roll out a new publication about manufacturing and the economy. You'll learn that manufacturing pumps out $1.4 TRILLION in annual output, employs more than 14 million American men and women and accounts for 12 percent of Gross Domestic Product. From 2002-2004, manufacturing contributed 15 percent to US economic growth, more than any other sector. That's right--more than any other sector. As NAM president John Engler points out, the US economy is still very much a "manufacturing economy." Be sure to tune into the Shop Floor blog on February 23 and we will have a direct link to our new report.

Posted by Bill Canis at 9:17 AM | Click here to comment | Send to a Friend

February 15, 2006

Probably Not What You Thought

The Manufacturing Institute is readying our next report for release at NAM offices on February 23. Taking a close look at the role of small and medium manufacturers in the economy, it will be a definitive paper on this segment of manufacturing. The report is full of facts as well as real world experiences from a cross section of successful SMMs, as we affectionately call them.

Here are a few facts from the report: the United States is the world's leading manufacturer, producing 75 percent of what it consumes. US manufacturers produce more today than at any time in U.S. history and SMMs make 40 percent of it. And get this--standing alone, the US manufacturing sector would represent the eighth largest economy in the world, nearly equal to China's entire economy. If this surprises you, let us know what country you thought was the top manufacturer.

Posted by Bill Canis at 8:39 AM | Click here to comment | Send to a Friend

February 10, 2006

If you care about manufacturing....

Earlier today the Chief Blogger posted The Map. This is a map with the prices of natural gas around the world, showing the huge disparity in natural gas pricing. The United States is near the top of the heap, with some of the most expensive natural gas anywhere. This is particularly odd since, unlike Japan and some other industrial countries with lower priced gas, this country still has vast reserves of the stuff. Not drilling for it (and not importing much of it as liquefied natural gas) means that we have these spectacularly high prices. So who cares?

If you care about manufacturing, you would care a lot about this. That's because in the debate over how much is being manufactured in the United States, we are sitting here today witnessing the outmigration of one of our greatest manufacturing sectors: chemicals. Their basic feedstock is natural gas and they simply can't compete from the US when we have among the highest prices on the planet. An article about this some time ago in Business Week was entitled: "No Longer the Lab of the World: US Chemical Plants are Closing in Droves as Production Heads Abroad." They thoughtfully put that article on page 80. My, oh, my. Page 80.

You'd think that a high paying, high-technology, innovative sector like this, with $500 billion in sales, would prompt our media, legislators and leaders to sit up and take notice. Even take action! These are the engineering, science and technical jobs that everyone wants more of in America. But alas, public officials seem to be in some kind of sleepwalk where they pay homage to this while doing virtually nothing. Chemicals are used throughout manufacturing. Yet 70 chemical facilities were closed here in 2004 and employment has fallen from over a million in 2002 to around 800,000. While there is often little we can do when overseas countries build up their own manufacturing, here is a case where a change in US public policy would have a positive effect on retaining this key manufacturing sector.

If you care about manufacturing, you will relentlessly bug your elected officials until they do something about natural gas prices. A big chunk of innovative manufacturing is at stake here. If we take it for granted, it will soon be gone.

Posted by Bill Canis at 10:22 AM | Click here to comment | Send to a Friend

February 9, 2006

Roots of American Manufacturing--#2

By itself, American manufacturing in 2006 would be the eighth largest economy in the world, larger than the entire Chinese economy. Where did all this start? Not many Americans know that manufacturing has been part of America literally from the beginning. Colonists arrived in Virginia in 1607 and set up the first permanent English settlement in North America. Did you know that one of the first steps they took--in 1608--was to set up a glass-making operation, using the abundant sand in the area? I guess if they arrived today they'd make computer chips out of that same sand. The colonists needed to pay the investors back in Britain who had funded their trip and so they turned to manufacturing (and exporting). That's why starting this year and over the next few years we will celebrate not only modern America's 400th anniversary but also 400 years of manufacturing.

Posted by Bill Canis at 10:27 AM | Click here to comment | Send to a Friend

February 5, 2006

Roots of American Manufacturing

In January, the blog commemorated the 300th birthday of Benjamin Franklin, stateman, inventor and Founding Father. One of his contributions was to help lay the base for vigorous and innovative manufacturing in this country. It is often taken for granted that we have strong manufacturing, yet this sector doesn't flourish everywhere. It was men and women like Franklin who put the United States firmly on the industrial path. For example, in the 1720s when Franklin was starting out in Philadelphia with his own printing shop, he manufactured the first moveable type in the colonies rather than waiting many months for imported type from Great Britian. Many years later, he was honored by an American typeface designer who named the Franklin Gothic typeface after him in recognition for his leadership in developing the early printing industry in America.

Posted by Bill Canis at 9:40 AM | Click here to comment | Send to a Friend

February 2, 2006

The 5 Warning Signs in "US Manufacturing Innovation at Risk"

Our latest report on manufacturing was released yesterday: US Manufacturing Innovation at Risk. We promised to be back to highlight Dr. Popkin's five warning signs that he says are flashing red that America's innovation process is at risk. For the full report, click on the report above; if you are in a hurry, here's the cliff notes:

1. the growth in manufacturing output since the last recession is running at half the pace averaged in other recoveries of the past 50 years;
2. manufacturing capacity is barely growing;
3. the US share of global trade has shrunk from 13 percent to 10 percent. Germany has displaced the United States as the world's largest exporter and we now run a trade deficit even in advanced technology products;
4. new workers are discouraged from entering manufacturing and there is a shortage of skilled workers to replace older employees as they retire; and
5. US growth in R&D has been anemic in real terms since the turn of the century.

Posted by Bill Canis at 4:41 PM | Click here to comment | Send to a Friend

February 1, 2006

Why the American Competitiveness Initiative Matters

Last night, in the State of the Union Address, the President proposed a new American Competitiveness Initiative to spur federal support for basic research in the physical sciences, encourage bolder private sector R&D through a permanent R&D tax credit, boost support for math and science education and reform immigration. To some, this might sound like just an interesting amalgam of policy proposals. But for manufacturers, this is the first time in a long time, and maybe the first time ever, that the key elements of manufacturing's future have been highlighted before a joint session of Congress so clearly and passionately. One of my favorite quotes in last night's speech: "If we ensure that America's children succeed in life, they will ensure that America succeeds in the world."

Now, if you need some proof that this agenda is critical to manufacturing's future, you should read the report that The Manufacturing Institute and the NAM Council of Manufacturing Associations jointly issued today. It's written by prominent economists Joel Popkin and Kathryn Kobe. Nearly a year in the making, U.S. Manufacturing Innovation at Risk, is a sobering look at how this country's competitiveness edge might just be slipping away and, with it, strong economic growth and our high standard of living that we take for granted. We'll blog later on the authors' 5 clear warning signs that are blinking red.

Posted by Bill Canis at 10:41 AM | Click here to comment | Send to a Friend

January 31, 2006

Investing in U.S. Innovation

Tonight is the State of the Union address and lots of manufacturers will be watching. We hope the President says something about the need for our country to expand the pool of engineers, scientists and technical workers. We also hope that he talks about the research and development challenges we face as other countries around the world ramp up their own R&D budgets. These are both important because we can't take it for granted that our country will always be the innovation leader. We have to compete as never before. For a good primer on what's at stake for manufacturers, visit the website for the recent National Summit on Competitiveness where manufacturers large and small alike met and issued a statement that outlines some of our concerns.

Posted by Bill Canis at 12:49 PM | Click here to comment | Send to a Friend

January 30, 2006

Energy and Innovation

Rising prices for oil and natural gas have had a distinct and adverse impact on the U.S. economy as the fourth quarter 2005 GDP numbers showed last week. There are many paths to building a stronger energy base for the economy--more reliable sources of energy from the Outer Continental Shelf and Alaska, more diverse sources such as LNG, whole new sources such as hydrogen, use of new materials and greater energy efficiency of a wide range of products.

At the core of all of these solutions is the ability to develop and harness new technologies. Many people just take it for granted that U.S. manufacturers will lead the way. Like most of manufacturing, it is the pace and application of innovation that distinguishes it from other sectors in the economy with new ideas that translate into higher productivity and, in this instance, more energy. One such new technology is profiled in this month's edition of The Manufacturer magazine. A Massachusetts-based company, A123 Systems, has developed a new generation of lithium-ion batteries made with nanotechnology. The company's researchers turned to advanced materials to boost the life, power and efficiency of lithium-ions. The company, with support from Motorola and the Massachusetts Institute of Technology, says that these new batteries offer ten times the life and five times the power of conventional lithium-ion technology. As reported recently, Black & Decker will use them in a new generation of portable power tools. Moreover, A123 Systems believes that this new technology could help popularize the all-electric vehicles or "pluggable" hybrids that rely less on the internal combustion engine.

Posted by Bill Canis at 2:48 PM | 1 comment; click here to read it or submit your own! | Send to a Friend

January 22, 2006

Innovation

For manufacturers, innovation is a way of life. Generating new products and processes is the key to staying competitive, more than for any other sector of the economy. It's not a surprise then that nearly 60 percent of all private sector R&D in the United States is in manufacturing. Because of the link between competitiveness and innovation, more than a dozen manufacturers joined university presidents and executives from other industries recently at the National Summit on Competitiveness: Investing in U.S. Innovation in Washington, D.C.

One of the participants was Mary Vermeer Andringa, co-CEO at Vermeer Manufacturing in Pella, Iowa. She said that her medium-sized, family business put a big emphasis on R&D, with about half of their products having been introduced just in the last five years. She was there because she is concerned about the lack of interest in math in science in today's students and what that means for engineering, science and technical skils in the years ahead. Vermeer Manufacturing is helping in its own ways to reverse this trend and funds summer workshops for teachers to help give them additional skills in teaching math and science. For more about what Ms. Andringa and the other executives discussed, go to www.usinnovation.org.

Posted by Bill Canis at 9:23 AM | Click here to comment | Send to a Friend

January 17, 2006

Happy Birthday, Benjamin Franklin!

There could be no better day to join the manufacturers' blogosphere than today, the 300th birthday of that famous inventor and statesman, Benjamin Franklin. I'm Bill Canis, vice president and executive director at The Manufacturing Institute, the research and education arm of NAM. From time to time, I'll be blogging here on some of the incredible things that today's manufacturers are doing in their plants, offices and research labs and that too few people know about.

There are few leaders in American history who personify the inventiveness and creativity of manufacturing better than Franklin, as shown in today's Washington Post article about him. But there are many inventive minds like Franklin's around us today, such as Ron Bullock, chairman and CEO of Bison Gear & Engineering in St. Charles, Illinois. Ron Bullock is a small manufacturer who participated in the National Summit on Competitiveness in December and spoke about the high-efficiency electric motor drive that he and his company are developing. Twenty-five percent of U.S. energy is consumed by electric motors; Ron Bullock's research team will seek to increase the efficiency by 30 percent, thereby cutting the need for as many as 50 fossil burning fuel plants or energy generating plants. Now that's the kind of thinking Ben Franklin appreciated!

Posted by Bill Canis at 1:21 PM | 1 comment; click here to read it or submit your own! | Send to a Friend