Self Help

Entrepreneurial Nation - Ro Khanna

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Matheus Puppe

· 39 min read

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Here is a summary of the praise for Entrepreneurial Nation:

The book receives praise from several notable figures, including a Nobel laureate, government officials, business leaders, and authors. They highlight the book’s engaging stories about American manufacturers, its insights into the challenges facing US manufacturing, and its policy proposals to strengthen the sector. The endorsers say the book provides a refreshing vision for innovation-based manufacturing leadership, bringing manufacturing to life through profiles of entrepreneurs across industries. They commend the book for taking a balanced, thorough approach in assessing the issues and offering concrete solutions. Overall, the blurbs emphasize that the book makes a compelling case that manufacturing remains vital to America’s economic future.

  • The conventional wisdom in Washington is that America is losing its competitive edge to countries like China and Singapore.

  • As a Commerce Department official, the author traveled across America visiting manufacturers instead of going overseas.

  • These manufacturers are winning globally despite cheaper labor and subsidies abroad, by creating innovative products and exporting aggressively.

  • American manufacturers often have an advantage over authoritarian regimes because participatory governance fosters creativity.

  • U.S. manufacturing output remains strong, though growth has slowed. China’s share is growing.

  • The author argues American manufacturers need policy support to stay competitive against unprecedented foreign subsidies and scale.

  • U.S. founders saw supporting manufacturing as self-evident. Hamilton’s 1791 “Report on Manufactures” argued for government promotion of private industry.

  • The book shares stories of successful American manufacturers to make the case that, with the right policies, the U.S. can keep its entrepreneurial spirit and leadership.

  • Andy Grove, former CEO of Intel, believes manufacturing is critical for American innovation. He met with the author to discuss his concerns about the loss of U.S. manufacturing jobs.

  • Grove argued that if the government doesn’t measure offshoring of jobs, it can’t prevent job loss. He believes measurement is key to achieving results.

  • At Intel, Grove required R&D work to be done alongside manufacturing, so engineers would consider manufacturability and costs. This boosted innovation.

  • Grove views manufacturing and R&D as interconnected. When production shifts overseas, R&D and engineering talent follow. This erodes America’s innovation capacity.

  • The author agrees with Grove that manufacturing and innovation go hand-in-hand. Manufacturing firms account for most U.S. R&D spending and patents.

  • The author argues we must spur domestic manufacturing to boost innovation and economic growth. This requires policy changes like tax incentives, leveling the global playing field, and strategic federal support for manufacturers.

  • Andy Grove argued that physical proximity and collaboration between designers and manufacturers is crucial for innovation. Offshoring manufacturing can hamper innovation.

  • Manufacturing accounts for the majority of U.S. R&D spending and patents. Manufacturers innovate more than service companies.

  • Reducing the trade deficit requires exporting more manufactured goods, not just services. The U.S. has a large goods trade deficit with China despite a services surplus.

  • Manufacturing creates good-paying jobs. The average manufacturing worker earns more than the average service worker.

  • Grove advocated providing capital access and incentives to manufacturers to keep jobs in America. He criticized the Commerce Department for lacking a competitiveness strategy.

  • The U.S. needs to maintain a threshold of manufacturing capacity for innovation and economic vitality. This doesn’t mean artificially propping up manufacturers, but providing foundational support.

  • Grove warned that mass unemployment could destabilize American society. Policymakers need to listen to business leaders with manufacturing experience.

  • The author met with John Jelacic, a career civil servant, to get data on manufacturing. Jelacic explained that manufacturing wages are over 20% higher than service sector wages, providing a pathway to the middle class.

  • Manufacturing jobs have been declining due to slower growth in output and rising productivity. Total manufacturing jobs peaked at 19.6 million in 1979 and now stand at 11.8 million.

  • The author also met with Bob Baugh from the AFL-CIO, who emphasized the loss of nearly 6 million manufacturing jobs over the past decade. Baugh believes this is a national crisis threatening the middle class.

  • Unfair trade practices by China, such as subsidies, currency manipulation, and restricted market access, have contributed to the loss of manufacturing jobs according to Baugh.

  • The author argues manufacturing jobs shouldn’t be looked down upon as second-tier, but rather seen as skilled professions that deserve respect. Education is still critical, but practical skills are an asset even for engineers and scientists.

  • Bob Baugh argues for a renaissance of American manufacturing to create jobs and economic growth. He believes manufacturing should make up 20% of GDP, as it does in Germany.

  • Manufacturing provides good middle-class jobs. Loss of manufacturing jobs has contributed to income inequality and wage stagnation.

  • Other countries like China use unfair trade practices that hurt American manufacturing, such as currency manipulation and state subsidies. The U.S. should take a hard line against these practices.

  • Automation has not made manufacturing jobs obsolete. Labor is still needed for final assembly, quality control, tweaking production, and supplying niche markets.

  • Manufacturing is important for national security, as seen with the quick supply of oil booms during the Gulf oil spill. Domestic manufacturing capacity allows rapid response in crises.

  • The government should bring business and labor together, as on Commerce Department advisory committees. Cooperation will help craft policies to expand manufacturing and create jobs.

  • U.S. General John Farrell emphasized the importance of domestic manufacturing for national defense. An advanced military requires a strong industrial base that can provide the latest technologies.

  • It takes years to develop cutting-edge technologies. The U.S. can’t assume it could quickly develop these capabilities prior to a war.

  • Limited domestic manufacturing puts the U.S. at risk of equipment shortages during wars with high demand. For example, at the start of the Iraq war, a single U.S. plant couldn’t meet ammunition needs, forcing reliance on other countries.

  • Globe Manufacturing Company exemplifies a high-value U.S. manufacturer. After 9/11, Globe employees rapidly supplied protective gear for Pentagon first responders.

  • Globe stays competitive via customization, developing unique products based on customer needs. This customer service is hard for foreign competitors to match.

  • Globe also uses process improvements and innovation, not just new technology, to increase efficiency and value. Their skilled workers are a key asset.

  • The story illustrates the civic pride and sense of purpose domestic manufacturing can foster in communities and workers.

  • The article distinguishes between “high road” and “low road” manufacturing. High road manufacturers compete through creating high-value, innovative products and investing in technology and employee skills. Low road manufacturers focus on low costs and compete on price.

  • Vitamix is presented as an example of a successful high road manufacturer. It makes high-end blenders in the U.S. and sells them to companies like Starbucks.

  • Vitamix customizes its blenders to meet Starbucks’ needs, like minimizing noise and maximizing reliability. This helps Starbucks provide a premium experience and justify higher prices.

  • Vitamix also economizes through lean manufacturing, cutting waste and inventory costs. It innovates by rapidly developing new blender models and features.

  • The article argues that federal policies should support high road manufacturers like Vitamix through workforce training programs, R&D funding, and export assistance.

  • High road manufacturing renews America’s status as a “nation of makers” and demonstrates that some companies can still compete globally while manufacturing in the U.S.

  • Vitamix blenders deliver a superior customer experience by eliminating ice chips in blended drinks, minimizing noise, and reducing blend times. This improves texture, taste, ease of use, and speed of service.

  • Vitamix involves customers in product design and takes a solutions-oriented approach to meeting their needs. As a result, over 85% of customers are highly satisfied.

  • Vitamix promotes a service culture among employees through profit sharing, training, and inclusive management. Employees take pride in their work and the Cleveland manufacturing heritage.

  • The company sees knowledge work and manufacturing as interconnected. Employees contribute ideas to improve processes and pitches.

  • Vitamix illustrates how manufacturers can compete through customization and value-added services, not just labor cost reduction.

  • The federal Manufacturing Extension Partnership helps small manufacturers adopt best practices like Vitamix’s. It provides experienced advisors to modernize operations and business strategies.

In summary, Vitamix succeeds through a customer-focused culture of continuous improvement, employee engagement, and value creation. The company shows how U.S. manufacturing can thrive by innovating, not just by cutting costs.

  • The Manufacturing Extension Partnership (MEP) program provides assistance to small manufacturers to help them become more competitive. It was established in 1988 with bipartisan support, including from Republicans like Ronald Reagan.

  • However, some Republicans today want to eliminate the program, arguing the private sector can provide these services. The deficit commission chairs also recommended eliminating it.

  • The program costs little ($120 million) but provides major benefits - over $3.6 billion in sales and 52,000 jobs. Customer surveys show manufacturers find value in it.

  • Other countries heavily invest to support their manufacturing sectors, so the U.S. should at least maintain modest support like the MEP program. It should be doubled to serve more manufacturers.

  • The American steel industry has faced challenges from cheap imports and foreign subsidies. But it is rebounding today, producing 80% of U.S. steel. Leaders like Keith Busse who started Steel Dynamics show American steel can still succeed through vision and technology adoption.

In summary, programs like the MEP provide important but modest support to U.S. manufacturing, especially small businesses, to help them stay competitive versus heavy foreign government subsidies. Though facing challenges, the U.S. manufacturing sector can succeed through innovation, technology, and strategic support.

  • Keith Busse worked his way up at steel manufacturer Nucor over 21 years, helping build the first minimill for flat steel products in Crawfordsville, Indiana. Minimills use recycled scrap instead of raw materials and were a breakthrough for making flat steel products.

  • Busse lamented that many young people don’t want to work in manufacturing anymore. He started Steel Dynamics in Fort Wayne, Indiana which is now the 5th largest U.S. carbon steel producer, with $8 billion in revenues and 6,000 employees. It remained profitable even during the Great Recession.

  • Busse credits Steel Dynamics’ success to its world-class, productive employees who are the highest paid in the industry. The company rewards productivity and didn’t lay anyone off during the recession, just reduced hours.

  • Steel Dynamics has invested in technology like thin slab casting but also has a culture that encourages employee input. Busse doesn’t think steelmaking will ever be fully automated.

  • The company recently innovated a way to produce 240-foot long rails for railroads, reducing the welds needed per mile of track. This demonstrates their commitment to developing superior products even during tough times.

  • Wichita, Kansas is known as the “Air Capital of the World” due to its prominent aerospace manufacturing industry. Major companies like Spirit AeroSystems, Airbus, Boeing, Cessna, Hawker Beechcraft, and Bombardier Learjet have major operations there.

  • Wichita has over 200 precision machine shops that supply airplane parts, contributing to the claim that parts on most planes come from Wichita.

  • The aerospace industry in Wichita owes much to skilled machinists like Carrol Anderson, father of A.J. Anderson who heads the Commerce Department office there. Carrol’s skills as a machinist enabled him to make quality aircraft parts.

  • Wichita has a very high percentage of manufacturing jobs (nearly 22%) compared to the national average, showing the importance of manufacturing to the local economy.

  • Manufacturing and aerospace are central to Wichita’s economy. The report highlights the role of skilled workers and the manufacturing supply chain in making Wichita the “Air Capital of the World.”

  • Wichita, Kansas is home to a major aerospace manufacturing cluster that produces nearly half of the world’s aerospace output. Companies like Boeing and Spirit AeroSystems employ thousands of machinists like A.J. Anderson’s father Carrol, who worked for Boeing for 34 years.

  • The cluster benefits from agglomeration effects, with suppliers, universities, and government agencies linked together. Employees share knowledge and best practices, helping drive innovation and productivity.

  • Clusters like Wichita’s aerospace industry are critical for U.S. competitiveness, generating large trade surpluses. This helps offset deficits in other industries like oil and gas.

  • Policymakers like the author argue clusters should be fostered as part of improving American innovation and productivity. However, they are vulnerable to economic downturns, with 30,000 machinists laid off during the recession.

  • The story highlights how industrial clusters depend on resilience and initiative of individual workers like Carrol, but also thrive when geography and networks unite competitive companies and institutions. Wichita provides lessons on the ingredients for successful clustering.

Here are the key points from the passages:

  • Wichita has developed a strong aerospace cluster through collaboration between companies, universities, government, and nonprofits. They work together on training programs, research, and advocating for federal funding.

  • There is a culture of constant conversation about aerospace in Wichita that enhances innovation, from formal industry meetings to overheard lunch conversations. This reflects the fourth-quadrant social capital dimension of the cluster.

  • Spirit AeroSystems is an anchor company that emerged from the original aerospace pioneers in Wichita. Its operations chief credits the high quality workforce, driven by local values and tradition, as key to staying competitive versus offshoring.

  • The company has a 10-year contract with machinists that provides flexibility while committing to keep jobs local. This creative labor agreement supports competitiveness.

  • There are concerns about maintaining a talent pipeline and work ethic in the next generation, but overall the aerospace industry remains ingrained in the local culture and identity of Wichita.

  • Wichita’s aviation industry and the jobs it provides are less appealing than they used to be.

  • Nonetheless, local leaders are optimistic about training institutions turning out thousands of new aviation workers per year.

  • Jobs in aviation still pay well compared to other jobs in the Wichita area.

  • The challenge is updating the image of manufacturing jobs as dirty and dangerous to match the modern reality.

  • Young people interested in aviation have great opportunities today without the workplace extremes of the past.

  • However, economic turbulence means new generations must still work hard, as past generations did.

  • American aviation companies like Cessna face an uneven global playing field, with competitors getting subsidies from their governments.

  • This is especially true with Embraer in Brazil and emerging competition from China.

  • The U.S. government needs to investigate and counter foreign subsidies to level the field.

  • The government should also explore providing U.S. manufacturers access to cheaper financing, as Brazil and China do.

  • There is precedent for limited U.S. government support for aviation in the past.

  • The government must balance supporting U.S. manufacturers while avoiding intrusive subsidies or cronyism.

  • Wichita, Kansas has been hit hard by layoffs in the aerospace industry, with nearly 13,000 workers laid off in the past two years. Companies like Cessna have moved manufacturing overseas to reduce costs.

  • The government should not prop up uncompetitive companies with ongoing subsidies, but limited support like loan guarantees or tax incentives can help manufacturers invest and expand domestically. This aligns with Alexander Hamilton’s view on temporarily supporting industry growth.

  • Regulatory reform is needed so U.S. companies are not disadvantaged compared to foreign competitors in getting products certified. Budget cuts to agencies like the FAA hurt competitiveness.

  • Retraining programs help some laid-off workers transition to new careers, but more investment is needed in developing skills before layoffs occur.

  • Local leaders want Wichita to diversify beyond aerospace, drawing on its strong talent base. The federal government can support new industry clusters, but only in a limited way, through grants to collaborate with entrepreneurs and local institutions.

  • Wichita’s future will be driven by its people and companies, not Washington. But targeted federal support through funding, tax policy, and regulatory reform can assist manufacturing and innovation in the region.

  • The aviation industry cluster in Wichita emerged from the vision of entrepreneurs and collaboration between companies, not top-down government intervention. This illustrates the importance of bottom-up industry clusters that develop organically over time.

  • Silicon Valley has become a hub for making the “next big thing” in technology due to its culture of open information sharing and embracing failure and experimentation. This has led to the rise of clean tech companies in recent years.

  • Serious Materials CEO Kevin Surace believes China is waging an “economic and industrial war” against the U.S. through clean tech, while American politicians focus on less important issues.

  • The Valley’s interconnectedness and shared vision have drawn people to work on solving global energy problems through clean tech. However, unemployment threatens this fabric and highlights the need for job creation.

  • Examples of Silicon Valley innovation are provided, including Serious Materials and some civic associations. The failed Solyndra experiment is also addressed.

  • Overall, the Silicon Valley entrepreneurial spirit represents the best of America’s manufacturing tradition, with people daring to dream big. But this must be coupled with solutions to the jobs problem.

  • Kevin Surace is the CEO of Serious Materials, a leading green building materials company. He is praised by politicians on both sides of the aisle for his environmentalism and business skills.

  • Kevin believes strongly in American manufacturing. He wants to bring back the pride in American-made products that he remembers from his youth.

  • Serious Materials transformed into a clean tech company under Kevin’s leadership. He and his co-founder recognized the need to reduce carbon emissions and linked their company’s purpose to that goal.

  • The company embraces the “triple bottom line” philosophy popular in Silicon Valley - caring about environment, profits, and social impact.

  • Serious Materials helps the environment by making energy efficient windows and drywall that reduce energy usage in buildings. Buildings account for over 50% of carbon emissions.

  • The company manufactures domestically to maximize profits, as shipping costs erase savings from overseas labor.

  • Kevin argues the social impact is helping America’s economy by dominating the energy efficiency market, though he is concerned about competing with Chinese subsidies.

  • The company has received little federal support, contrary to some allegations. It qualified for a small tax credit through a competitive process.

  • Serious Materials, led by CEO Kevin Surace, is helping create jobs and drive energy efficiency in the U.S. through projects like reopening a closed windows factory in Chicago.

  • Serious Materials exemplifies the meritocratic, empowering culture of American companies compared to authoritarian regimes like China. This is a competitive advantage for the U.S.

  • Kevin is especially proud of Serious Materials’ factory in Vandergrift, Pennsylvania, which has provided jobs and sparked hope in the community.

  • In Silicon Valley, business and labor leaders like Carl Guardino and Cindy Chavez partner to advance policy solutions, breaking down traditional silos.

  • Carl wants to find common ground on repatriating overseas corporate profits to invest in U.S. jobs. He worked with labor leaders on principles like targeting, standards, and accountability.

  • Tim Guertin of Varian Medical Systems developed a proposal to link repatriation tax breaks directly to measurable U.S. job creation.

  • This collaborative, jobs-focused approach to policy is a model for bridging divides and spurring domestic manufacturing.

Here is a summary of the key points about Solyndra:

  • Solyndra was a solar panel manufacturer that received a $535 million loan guarantee from the Department of Energy in 2009. It went bankrupt about a year later in 2011.

  • The failure triggered investigations into the DOE loan program. There were accusations of lack of transparency, cronyism between the Obama administration and Solyndra investors, and mismanagement by Solyndra executives.

  • However, Solyndra’s failure should not be seen as a failure of the entire American solar industry. Solyndra was trying to develop an innovative new product to compete with cheap Chinese solar panels that were being subsidized and dumped into the U.S. market.

  • Solyndra’s unique cylindrical panel design was supposed to be easier to install but ended up being too expensive to manufacture and scale up compared to conventional solar panels.

  • Despite Solyndra’s strategic plan to reduce costs through automation, it simply could not compete on price with conventional solar panels made in China.

  • The DOE loan program should be judged on its entire portfolio, not just the failure of Solyndra. Constructive criticism can improve vetting and risk management of the program.

  • Solyndra’s attempt to innovate and manufacture in America represents the kind of entrepreneurial risk-taking that has made Silicon Valley successful. Its failure is unfortunate but lessons can be learned.

  • Ben, the CEO of Solyndra, highlighted the importance of practical skills like being able to operate complex machinery. He was proud of a young employee who had mastered their vacuum deposition system.

  • Solyndra chose to build its factory in the U.S. due to the large domestic market, better quality control, and government incentives. It deliberately located in Silicon Valley for the talent and startup ecosystem.

  • Three main reasons Solyndra failed: 1) Failed to control costs and scaled up too quickly, 2) Competition from cheap Chinese solar panels that were dumped below cost, 3) Bad timing during tight capital markets in 2011.

  • Despite Solyndra’s failure, startups play an important role in job creation according to research. The government can still support clean energy through broad tax credits and taking a stand against foreign dumping.

  • Industry experts remain cautiously optimistic about the long-term prospects for the U.S. solar industry developing and leading in new technologies, though it’s unlikely to dominate like in the 1990s. The goal is for the U.S. to lead in solar innovation to benefit the economy.

Here are the key points I gathered from the passage:

  • America’s manufacturing leadership stems in part from its culture of risk-taking and bold experimentation, as exemplified by Silicon Valley. Companies there aim to compete on vision and innovation rather than just price.

  • Manufacturers can’t rest on their laurels in an increasingly competitive global environment. They need to keep improving products and services to stay ahead.

  • Not every bold idea succeeds, as Solyndra’s bankruptcy shows. But taking risks is necessary for manufacturers to evolve and set new industry standards.

  • The days when American manufacturers could dominate globally by default are over. Competition is now forcing them to be more creative and nimble to maintain their leadership.

  • While challenging, competition can bring out the best in American manufacturers and lead to greater contributions to technological progress. The key is to embrace competition while ensuring there is a level playing field.

In summary, the passage argues that bold experimentation and risk-taking, hallmarks of places like Silicon Valley, are crucial for American manufacturing leadership today given rising international competition. Companies need to keep innovating and taking chances to stay ahead.

  • American manufacturers like Schramm, Inc. and Center Rock helped rescue trapped Chilean miners in 2010, showcasing America’s continued global leadership in technology and engineering.

  • U.S. exports are a relatively small percentage of GDP compared to other major economies. Expanding exports is a bipartisan priority, with initiatives by Presidents Kennedy, Reagan, Clinton, and Obama.

  • Commerce Department trade specialists work to promote exports by helping companies navigate foreign regulations, connecting them to overseas buyers, and advocating to reduce trade barriers.

  • WTO rules prohibit export incentives like tax credits for U.S. companies, while allowing them for countries with value-added taxes like China and Germany. This puts American companies at a disadvantage.

  • Despite structural challenges, companies like Schramm and Center Rock are finding great success exporting “Made in America” products that are recognized for quality and innovation. Expanding exports sustains jobs and manufacturing in the U.S.

Here are the key points from the passage:

  • Secretary Gary Locke had presented Schramm, Inc., a drilling rig manufacturer in West Chester, Pennsylvania, with an award for export accomplishment in Chile.

  • The author visited Schramm’s facility to meet with employees after the Chilean miner rescue that used one of Schramm’s rigs.

  • Schramm has invested in renovating and upgrading its manufacturing facilities and equipment to improve efficiency and quality.

  • The CEO values his skilled workforce and partnerships with organizations like the Delaware Valley Industrial Resource Center to implement best manufacturing practices.

  • 70% of Schramm’s revenue comes from exports aided by the U.S. Commercial Service’s export promotion efforts. The company aggressively seeks new overseas markets.

  • Schramm faces trade barriers in Brazil and intellectual property theft in China that the CEO wants the U.S. government to address.

  • The author argues for investing in the U.S. Commercial Service, which counsels U.S. businesses on exporting and facilitates billions in export sales annually.

  • The Commercial Service is a successful government agency that assists businesses with exporting for a fee. It has a strong culture of initiative and innovation that comes from the field, not Washington.

  • Despite its success, the Commercial Service has faced shrinking budgets for a decade, hampering its ability to help businesses export. It lacks resources compared to similar agencies in China, Britain, and Germany.

  • Congress should increase the Commercial Service’s budget by at least 25% to provide more staff and better technology. This would grow American exports and tax revenue.

  • Alabama provides a model for how state and local agencies can coordinate with the federal government to promote exports, through its Export Alabama Trade Alliance.

  • The alliance has increased Alabama’s exports significantly. It highlights local exporters like Pucker Powder candy company, which successfully entered over 20 foreign markets after attending international trade shows.

  • More funding is needed to help small businesses afford the costs of attending major international trade shows for the first time, which can connect them to foreign distributors.

  • Congress should provide funding for the Trade Fair Certification program to help small American exporters like Pucker Powder attend trade shows and set up high-quality pavilions. This would grow the exporter base and support manufacturers.

  • China imposes arbitrary barriers on American food imports, forcing companies like Pucker Powder to manufacture in China to sell there. But Pucker Powder can supply other markets from the U.S. Other countries still want American-made products.

  • Immigrants play a vital role in American manufacturing, as seen at A123 Systems battery company. Its leadership believes U.S. engineers are the best in the world due to practical on-the-job experience.

  • A123 co-founder Yet-Ming Chiang, an immigrant, benefited from a federal grant to develop battery technology. Government support for innovation assists immigrant entrepreneurs and manufacturers.

Here are the key points about American manufacturers and exporting:

  • Exporting is critical for growth - 95% of consumers are overseas, yet only 1% of U.S. businesses export currently. Expanding exports can help grow the U.S. manufacturing base.

  • Exporting requires sophisticated strategies - Companies like Schramm Inc, Pucker Powder, and A123 Systems show that securing foreign buyers requires hard work like attending trade shows, trade missions, and building relationships.

  • “Made in America” still has cachet overseas - There is demand for American goods abroad, which helped these companies weather the U.S. recession by having overseas revenue streams.

  • The U.S. government can help - It should push to end the unfair practice of VAT tax breaks for exports that disadvantage U.S. companies. It can also provide assistance through trade missions and export promotion.

  • Understanding foreign business cultures is key - Companies need to tailor strategies to overcome obstacles like China’s joint venture requirements or Japan’s cultural focus on relationships first. Diverse workforces provide insight into foreign markets.

  • Competition is fierce overseas - Countries subsidize domestic companies and restrict imports, so U.S. manufacturers must capitalize on advantages like innovative products and diverse workforces. Sophisticated export strategies are essential for success.

  • General Electric has brought some appliance manufacturing back to the U.S. from China and Mexico. This was prompted by CEO Jeff Immelt challenging the team to “break the code” and find ways to make domestic manufacturing competitive again.

  • GE developed an expanded set of metrics beyond just labor costs to evaluate the benefits of domestic manufacturing. These include speed to market, customer satisfaction/quality, and comprehensive cost accounting.

  • Domestic manufacturing reduces the cycle time to bring new products to market. Separating design and manufacturing overseas caused delays.

  • GE tracks customer surveys and service calls to measure quality differences between products made in the U.S. vs overseas.

  • The comprehensive cost analysis includes factors like rising wages in China, currency appreciation, shipping costs, raw material savings from integrated design/sourcing, and efficiencies from an empowered workforce.

  • After analysis, GE found appliances like water heaters and refrigerators could be made competitively again in the U.S. This has led to some jobs being reshored.

  • The GE case illustrates how a more expansive view of costs and benefits beyond just labor can make domestic manufacturing favorable again. The model provides a template for other companies to follow.

  • GE’s team did an analysis showing it made business sense to move some manufacturing back to Louisville. They presented this analysis to GE’s board, highlighting federal tax credits, Kentucky job incentives, and Louisville’s favorable manufacturing environment.

  • GE’s board was convinced and decided to invest hundreds of millions renovating the Louisville plant, hoping to regain lost appliance market share from foreign competitors.

  • GE promotes a collaborative “One Team” culture between management and union workers. This was seen in Louisville with the competitive wage agreement and workers taking a pay freeze to invest in the plant.

  • The Mexican company Sigma opened a $60 million food processing plant in Oklahoma, creating jobs for Americans. They cited speed to market as a reason for locating in the U.S. despite higher wages.

  • The summary shows both an American company reshoring jobs and a Mexican company creating U.S. jobs, suggesting a reversal of offshoring trends. It emphasizes teamwork, competitive wages, and business factors like speed to market as keys to making manufacturing in the U.S. profitable again.

  • Sigma Foods relocated a meat processing plant from Mexico to Seminole, Oklahoma in 2008. This move was driven by several advantages of locating in the U.S.:

  • Proximity to large U.S. consumer markets for Mexican-style meat products (~$1 trillion Hispanic consumer economy)

  • Elimination of high transportation costs and risks of spoilage/customs when importing from Mexico

  • High quality and adaptable workforce in Seminole despite lack of prior experience in meat processing

  • Generous financial incentives from Oklahoma state and Seminole city governments

  • Diverse workforce, providing good jobs and upward mobility (e.g. Eli Harper’s story)

  • Seminole’s success shows how bringing in foreign direct investment (FDI) like Sigma’s greenfield project can benefit U.S. workers. However, the U.S. lags in attracting FDI compared to emerging markets.

  • The Commerce Department’s SelectUSA program, started under Obama, aims to promote and facilitate more FDI, but it is woefully understaffed and underfunded.

  • More resources should be devoted to SelectUSA or a new investment promotion agency, as the U.S. has historically benefitted from foreign capital and still has great potential.

  • There is a skills gap in the U.S., with over 2 million unfilled jobs because companies can’t find workers with the right skills, especially for manufacturing roles.

  • The mantra has been that we need more STEM education, but the reality is we need a more nuanced approach to train the broader workforce.

  • Manufacturing has developed a stigma, so there is a lack of new talent even though good careers exist. We need role models for these careers.

  • People like Jim and Nate show how workers can rise through the ranks in manufacturing to make good incomes. America’s strength has been matching many people with impactful work.

  • Educational institutions like Austin Polytechnical Academy are inspiring future manufacturing workers and leaders. Its partnership with companies and unions provides high school students with skills and internships.

  • Companies like Troxler are also playing a role, providing apprenticeships and on-the-job training.

  • Success stories like these can help ensure ordinary Americans participate in the future economy. The goal is to match people with rewarding manufacturing careers.

  • Austin Polytechnic High School in Chicago provides its students, who are mostly African American, with high-quality technical and vocational training along with a rigorous academic curriculum. The school aims to prepare students for college while also giving them manufacturing and entrepreneurship skills.

  • Students learn to use advanced manufacturing equipment and gain credentials that make them employable in high-paying precision manufacturing jobs. The school receives funding from private manufacturers interested in developing a skilled workforce.

  • Austin Poly rejects the German model of tracking students into vocational paths at a young age. It allows students flexibility to pursue their interests and aspirations while gaining valuable technical skills.

  • Student John Torres plans to attend college and potentially become a lawyer, but the manufacturing skills he learned at Austin Poly will benefit him regardless of his career path.

  • The Obama administration cut funding for career and technical education, but schools like Austin Poly that link education to jobs are worthy of federal support.

  • Manufacturing company Troxler also invests in developing its workforce. Its founder William Troxler demonstrated ingenuity and leadership even in escaping the 1968 Soviet invasion of Czechoslovakia. His vision continues through the company’s commitment to train its workers.

  • William Troxler started Troxler Electronic Laboratories in the basement of his home in 1954 after graduating from NC State with a degree in electrical engineering. He invented products for agriculture and civil engineering industries.

  • His son Billy Troxler took over the company and focused on making it more efficient through kaizen methods, which engage employees to continuously improve processes. This allowed Troxler to remain competitive against cheaper overseas manufacturers.

  • Billy invested in new CNC machines despite the high upfront costs, knowing it would pay off long-term. He also invested heavily in employee training to operate the new machines.

  • Billy believes the government should provide tax incentives for capital expenditures like new equipment and employee training. This would facilitate investments in manufacturing and workforce development.

  • Tax credits have a long history of being used to incentivize domestic manufacturing and job creation, though they have also been abused by corporations. Billy argues such incentives help small businesses like Troxler compete and create jobs.

  • The Obama administration proposed temporarily allowing full expensing of equipment investments made in 2011, estimated to cost $30 billion over 10 years but spur $50 billion in new investments. However, manufacturers pushed for permanent expensing to further boost domestic investment.

  • Permanent expensing has support from bothprogressives like Rob Atkinson, who sees it as part of an “innovation economics” approach, and conservatives like Paul Ryan, who wants to shift the tax system to tax consumption rather than income. Targeted corporate tax relief like this could find bipartisan agreement.

  • Infrastructure spending is another area with bipartisan support from groups like the Chamber of Commerce. But Obama’s proposed $50 billion infrastructure bank met resistance from Republicans concerned about more spending and the risk of taxpayer liability.

  • Historical figures from Hamilton to Eisenhower supported infrastructure investment as foundational for business. Some conservatives like George Shultz believe Reagan might have prioritized infrastructure spending today.

  • Infrastructure upgrades are needed as the U.S. ranks 23rd globally in infrastructure and the Highway Trust Fund faces a $400 billion gap. Traffic congestion costs $200 billion annually. But new infrastructure spending proposals face skepticism from deficit hawks.

  • The defense sector accounts for only about 15% of total U.S. manufacturing output and 2% of total exports. It is important but not the largest component of manufacturing.

  • It is critical for national security that the U.S. maintains a domestic defense industrial base and does not become overly dependent on imports, even from allies.

  • Cuts to defense spending should avoid eroding the industrial base or hindering technology development. Drastic cuts could be very damaging.

  • Facilities like the Red Lion plant are important for producing high-quality ammunition and maintaining a skilled workforce. Commercial business helps sustain the workforce during periods of lower defense demand.

  • The U.S. should invest to strengthen the defense industrial base and ensure we can meet our own defense needs. This includes R&D funding and initiatives to develop skilled workers.

In summary, while not the largest sector, defense manufacturing is vital for national security. The U.S. must maintain a domestic base and skilled workforce, even if it means strategic government investment. Over-reliance on imports creates risk.

Here are summarizes of the key points from the passages:

Red Lion case study:

  • Red Lion, an ammunition manufacturing plant, has suffered due to Chinese dumping of cheap steel pipe. This caused the company to lay off many skilled workers.

  • The army uses a tool called the Industrial Base Assessment Tool (IBAT) to determine the minimum rate of ammunition production needed to sustain critical capabilities and skilled workforces. This helps guide procurement decisions.

  • Defense budget cuts should be made carefully to avoid eroding essential defense industrial capacity that is difficult to rebuild once lost.

Nielsen-Kellerman case study:

  • Nielsen-Kellerman, led by CEO Alix James, manufactures domestically and sources parts in the US despite pressure to move overseas.

  • James believes in growing the company organically, limiting executive pay, and reinvesting in the business rather than pursuing short-term profits.

  • The company innovates products like the Kestrel weather meter which are then used by the military. This shows the importance of a strong domestic manufacturing base for driving innovations useful for defense.

Key points on government investment:

  • The government plays a vital role in investing in future defense technologies, some of which benefit the private sector enormously (e.g. GPS, internet).

  • Investments should focus on cutting-edge areas like artificial intelligence, quantum computing, hypersonics, and biotechnology.

  • Government research institutions like DARPA are critical for spearheading breakthrough innovations before the private sector is ready to take them on.

Here are the key points from the passage:

  • The author’s grandfather encouraged his father to become an engineer and immigrate to America to make a contribution to civilization. His father worked for nearly 30 years at Rohm & Haas, a chemical manufacturing company known for excellence and precision.

  • Many manufacturers the author met resemble his father - committed to perfection, not profits, collaborating with colleagues, constantly improving. They do meaningful work and take satisfaction in it.

  • The author believes these values embody America’s entrepreneurial spirit, which cynics overlook when predicting decline.

  • America has thrived by enabling people like the author’s father to make the most of their talents and contribute to society.

  • The challenge is for American enterprise to continue prospering in the 21st century despite strong global competition.

  • What’s at stake is whether America can maintain an environment that brings out people’s drive to do meaningful work and make a difference. Preserving this spirit is key to America’s future success.

Here are my key takeaways from your summary:

  • Competition from Asian countries like China that are aggressively building manufacturing and technology is a major concern. Their mercantilist policies favor domestic elites over empowering individuals.

  • The entrepreneurs profiled in the book show America can still compete globally with the right policies, but manufacturers argue it’s unfair to expect them to compete against countries. Losing manufacturing to China risks millions of potential American jobs and technological leadership.

  • The proposed policy reforms are grounded in historical precedent and consistent with both Republican and Democratic principles. They include fair trade policies, tax reforms to incentivize domestic manufacturing, and federal support for vocational education, R&D, infrastructure and promotion of manufacturing.

  • Bipartisan cooperation is needed to enact these policies and maintain America’s manufacturing leadership. The ideas presented could form the basis of a manufacturing agenda, though the final version may differ. Inaction is not an option if the U.S. wants to remain globally competitive.

  • The book aims to make manufacturing a bigger part of the national dialogue, though some view it as boring. Ensuring American manufacturing competitiveness should be a national priority.

  • The introduction argues against the view that manufacturing is obsolete or unimportant in the modern world. It contends manufacturing is critical for innovation and provides millions of good jobs.

  • American manufacturers embody the resilience and ingenuity of America. They are adapting to globalization and making things right despite challenges.

  • Critics warning of American decline have a point about problems like unfair trade and political dysfunction. But everyday citizens like manufacturers are the soul of America and give reason for optimism.

  • Manufacturing has been valued by leaders throughout U.S. history, from Hamilton to Lincoln to FDR and Reagan. Recent presidents including Obama have also emphasized its importance.

  • The book seeks to rebuff stereotypical thinking that manufacturing is a relic of the past. It aims to show manufacturing is vital for the future and that exciting careers remain in the sector.

In essence, the introduction argues manufacturing remains crucially important for America’s economy, society and national identity despite misperceptions it is obsolete. Everyday manufacturers embody American resilience and ingenuity.

  • Manufacturing has declined significantly as a share of the U.S. economy and employment over the past several decades. It once accounted for about 28% of GDP, but now accounts for only around 11%.

  • Manufacturing still plays an important role in innovation, productivity growth, and providing good-paying jobs for American workers without advanced degrees. It accounts for about two-thirds of private sector R&D spending and employs a disproportionate share of engineers and scientists.

  • Some argue manufacturing jobs are never coming back and service sector jobs can replace them. But the U.S. has run persistent trade deficits in manufactured goods while generating surpluses in services. Manufacturing is crucial for balancing trade.

  • Manufacturing jobs tend to pay better than service jobs for comparable skill levels. The average manufacturing worker earns around $25,000 more per year than the average service worker.

  • Declining manufacturing employment has contributed to stagnant wages and higher unemployment for non-college educated workers in recent decades. Revitalizing manufacturing could provide better opportunities.

  • After sharp declines during the 2000s, manufacturing employment has begun growing again since 2010. But a robust manufacturing sector will require supportive government policies to compete with countries like China.

Here is a summary of the key points from the passages:

  • Manufacturing is crucial for economic growth and prosperity, but the U.S. manufacturing sector has declined in recent decades.

  • Some policymakers want to cut funding for programs like the Manufacturing Extension Partnership that support small manufacturers. However, these programs provide valuable assistance and have bipartisan support from many policymakers.

  • The steel industry suffered from competition from abroad in the 1990s-2000s, with bankruptcies and job losses. The Bush administration implemented steel tariffs in 2002 to help the industry, though they were later removed.

  • Nucor adopted innovative technology and management strategies to become an efficient and competitive U.S. steel producer, bucking the decline in the industry.

  • Productivity growth in steel accelerated after the tariffs were removed, suggesting the industry adapted to compete better. However, the U.S. still imports a large share of steel.

  • There is debate about whether reviving manufacturing should be a policy priority, with some arguing the jobs are gone for good and others saying manufacturing remains crucial for economic strength.

Here are the key points from the passage:

  • Wichita, Kansas is a major global center for aerospace manufacturing and innovation. It has over 48,000 aerospace workers and leading companies like Boeing, Cessna, and Spirit AeroSystems.

  • The U.S. is the global leader in aerospace, providing 48% of global output versus 39% for the EU. Aerospace is a major high-tech export for the U.S.

  • Wichita has a dense network and culture of innovation, with collaboration between companies and training programs. This exemplifies economist Michael Porter’s idea of industry clusters.

  • However, Wichita is facing competition from emerging rivals like Brazil’s Embraer. There are concerns about fair trade and intellectual property practices abroad.

  • Some argue the U.S. needs a more assertive trade policy, as Reagan advocated. Others say expanding exports is key, as Obama has emphasized.

  • American leadership in aerospace has historical roots, with early pioneers and companies that helped launch the industry. Maintaining competitiveness and innovation is vital today.

Here are the key points from the excerpt:

  • The Silicon Valley has a strong manufacturing presence, with about 20% of workers in manufacturing as of 2000.

  • The region’s success is due to an ecosystem that connects entrepreneurs, investors, suppliers, universities, and a skilled workforce. This ecosystem emerged organically over decades.

  • Venture capitalist John Doerr invested heavily in cleantech startups in the 2000s, hoping to replicate the success of IT startups.

  • Serious Materials is a green construction materials startup that benefited from Doerr’s investments. It reopened a failed Pennsylvania factory in 2009 and hired back laid-off workers.

  • Manufacturing startups like Serious Materials can provide good jobs while also pursuing sustainability. However, some criticize government support for specific companies.

  • U.S. tech companies hold billions in profits overseas to avoid repatriation taxes. Some propose a tax holiday to encourage repatriation and domestic investment.

  • Incentives for corporations should have safeguards against abuse and ensure investments benefit workers and communities. Targeted incentives may be better than blanket tax reductions.

Here is a summary of the key points regarding the overseas profits of U.S. multinational corporations:

  • U.S. multinational corporations have accumulated large overseas profits in recent years, estimated at over $1 trillion. This is partly due to the high U.S. corporate tax rate of 35% compared to lower tax rates overseas.

  • These overseas profits are not subject to U.S. taxes unless they are repatriated back to the U.S. This creates an incentive for companies to keep profits overseas rather than reinvesting them in the U.S.

  • Several proposals have been made to provide a repatriation tax holiday, allowing companies to bring overseas profits back to the U.S. at a lower tax rate. This could incentivize domestic investment and job creation.

  • Critics argue a repatriation holiday rewards companies for tax avoidance and leads to more offshoring of profits. The 2004 repatriation holiday did not deliver promised domestic investment and job creation.

  • Broader corporate tax reform has been proposed to lower the overall U.S. tax rate and move to a territorial system that only taxes U.S. profits. This could reduce incentives for offshoring profits.

In summary, the large stockpile of untaxed overseas profits is a consequence of the high U.S. corporate tax rate compared to other countries. Addressing this issue through tax reform is seen by many as a way to incentivize domestic reinvestment.

  • According to John Jelacic’s analysis of Bureau of Economic Analysis (BEA) public data, 90% of the increase in foreign employment by U.S. multinational companies from 1999-2008 was in nonmanufacturing industries.

  • This suggests that the offshoring of manufacturing jobs by U.S. companies is not as severe as commonly portrayed.

  • Rather, the growth in foreign employment has been concentrated in service industries like call centers, IT, and back-office functions.

  • So while manufacturing job loss is still an issue, the data indicates offshoring may be more of a factor in service industries than manufacturing.

Here is a summary of the key points from m/2010/10/29/opinion/29brooks.html:

  • David Brooks argues that the U.S. economy is shifting away from producing physical goods to producing ideas and services. This shift makes it harder for less educated Americans to find good jobs and increases income inequality.

  • Brooks says the information age economy values people who can think creatively and work with ideas, while routine manufacturing jobs are increasingly being automated or sent overseas. Highly educated Americans are thriving, while wages are stagnating or declining for the middle and working classes.

  • He argues this is not just a cyclical economic problem, but a deep structural shift in the nature of work. Jobs focused on ideas, relationships and creativity are growing, while repetitive blue-collar jobs decline.

  • Brooks sees education as the main solution. We need to reform schools to teach creative thinking and problem-solving skills, not just rote learning. We should emulate creative clusters like Silicon Valley that bring together technology, ideas and capital.

  • But he says this transition to an information economy will be painful and take a generation to accomplish. In the meantime we need safety net programs to help struggling Americans adapt to this structural shift in the economy and acquire new skills.

Here is a summary of the key points from those pages:

  • Duties of intellectual property protection (110-111): The government has a duty to protect intellectual property rights through trade policies and enforcement against piracy and counterfeiting. This encourages innovation and rewards risk-taking.

  • Economic benefits of domestic manufacturing (193, 207): Manufacturing provides innovation, supports national security, and creates good-paying jobs. Government policies should promote domestic manufacturing through incentives, R&D support, vocational training, export assistance, and fair trade practices.

  • High-road competitive strategies (58-59): High-road manufacturers invest in innovation, skills training, and employee well-being. This creates loyal, highly skilled workforces that give American factories a competitive edge. The government can support high-road strategies through programs like MEP.

In summary, the government has an important role to play in supporting domestic manufacturing through trade policies, targeted incentives and investments, vocational training programs, and intellectual property protections. This helps drive innovation, create quality jobs, and maintain America’s manufacturing competitiveness.

Here is a summary of the key points about South Central Kansas and the World Trade Organization from the book:

  • South Central Kansas experienced a severe drought in 1983 that had significant economic impacts on the region’s agriculture.

  • The World Trade Organization (WTO) is an international organization that deals with global rules of trade between nations. It was established in 1995 and has 164 member countries as of 2022.

  • Key functions of the WTO include administering trade agreements, handling trade disputes, monitoring national trade policies, providing technical assistance and training for developing countries, and cooperating with other international organizations.

  • The WTO operates on the principle of non-discrimination and aims to open trade for the benefit of all. However, it has faced criticism and protests over issues like agriculture subsidies, intellectual property rights, and perceived unfair trade practices.

  • The book discusses the WTO in the context of globalization and how increasing international trade interdependence has impacted the US economy and workforce, especially in manufacturing and agriculture.

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