Federal and State Efforts to Promote Manufacturing

By Savannah Gilmore | Vol . 25, No. 17 / May 2017

NCSL News

Did you know?

  • The U.S. manufacturing sectors that employ the most people are transportation equipment, fabricated metal, and food.

  • In 2015, 27.6 percent of manufacturing employees ages 25 and older had a bachelor’s degree or higher.

  • Nearly six in 10 U.S. export dollars come from manufacturers selling directly to global markets.

Statistics from the U.S. Census Bureau show that manufacturing is alive and well. It is a dynamic sector that continues to shift as new subsectors emerge and grow. In fact, manufacturing is the nation’s fourth-largest industry, employing 11.4 million people.

No longer dependent on rote assembly line work, modern manufacturing meets fast-changing market needs by using the most advanced technologies and skilled workers. With an eye toward future innovations and to ensure an adequate workforce, governments are working with industry leaders to promote manufacturing and to help it continuously adapt to remain ahead of global competitors.

Federal Action

The federal government promotes manufacturing through a variety of different programs, including two highlighted below.

Manufacturing USA brings together federal agencies, industry and academia to increase U.S. manufacturing competitiveness and strengthen the national manufacturing research and development infrastructure. The program focuses on helping early-stage research evolve into everyday manufacturing practices.

Over the past four years, Manufacturing USA has established 14 Manufacturing Innovation Institutes across the country. Each institute has unique technological concentrations, ranging from 3D printing to hybrid electronics. Institutes provide access to advanced facilities and equipment. They also offer training and skills development tailored to support new technology areas.

A recent study highlighted initiatives used by institutes to reduce the talent gap. These include workforce assessments, community engagement events, post-secondary apprenticeship programs, and coordinating effective industry and skill-based credentials.

The National Institute of Standards and Technology’s Hollings Manufacturing Extension Partnership (MEP) concentrates on implementing recent innovations. MEP has established federal, state and local-level collaborations through a national system of jointly funded federal-state partnership centers in all 50 states and Puerto Rico. MEP facilitates and accelerates the transfer of manufacturing technology by engaging small and mid-size manufacturers to develop new products, expand into global markets and adopt new technologies, such as innovations under development in Manufacturing USA’s institutes.

The results are impressive. According to NIST evaluations, each dollar of federal investment in this public-private partnership generates $17.90 in new sales growth for manufacturers and $27 in new client investment. This adds up to $2.3 billion in new sales annually. A 2017 W.E. Upjohn Institute for Employment Research study found that $130 million in federal funds invested in MEP during FY 2016 generated $1.13 billion in federal personal income tax. Local centers must match each federal dollar with nonfederal funds, typically from state appropriations combined with fees that companies pay for technical assistance from their local university-based or nonprofit center.

State Action

States also promote manufacturing through a variety of approaches. For example, Connecticut has a Manufacturing Innovation Fund, which offers loans, grants, vouchers, incumbent worker training and apprenticeship programs. Massachusetts has an Advanced Manufacturing Training Program that focuses on training unemployed and underemployed individuals to meet the workforce needs of the competitive advanced manufacturing sector.

Relative to the rest of the country, Midwest states have a high concentration of manufacturing employment. Wisconsin, Indiana and Iowa, respectively, have the most manufacturing employment as a percentage of the total working-age population. These states’ manufacturing industries include fabricated metal products, food, machinery and transportation equipment manufacturing. In sheer numbers, California, Texas and Ohio, respectively, employed the most manufacturing workers in 2015.

The Southeast region of the United States—including Alabama, Florida, Georgia, Louisiana, Mississippi, North Carolina, Puerto Rico, South Carolina and Tennessee—has become an automotive manufacturing hub. It is comprised of over 300,000 employees, 14 original equipment manufacturers, and 1,120 manufacturers and suppliers. Several universities and community colleges host MEP centers, which has strengthened the region’s business focus.

Further, MEP centers provide key insight into manufacturers’ concerns and outlooks. Enterprise Minnesota, which is an MEP center, publishes its annual “State of Manufacturing” survey results. In 2016, it found that 90 percent of manufacturing executives expressed confidence about the future of their companies, which is the highest percentage in the survey’s eight-year history. However, the ability to attract and retain qualified workers continued to be a great concern for survey respondents, further stressing the need for workforce training programs.

A Day of Their Own

Recognizing the importance of this sector to the nation’s economy, America’s manufacturing industries celebrate an annual Manufacturing Day. This celebration seeks to inspire future manufacturers through events held across the country. During the fifth annual Manufacturing Day on Oct. 7, 2016, partners held more than 2,810 events across the country, raising public awareness about the industry.