US policy should focus on quality and not quantity of jobs, panel tells GMIS

29 Mar 2017
  • More inward-looking policies under Trump have pluses and minuses, delegates told
  • Manufacturing sector welcomes potential cuts in regulation and sweeping tax reforms

Abu Dhabi, UAE, March 29, 2017: Even as manufacturing is growing in importance to the US economy, the industry must concentrate on quality of jobs, not quantity. That was the key message from a special session on day one of the inaugural Global Manufacturing and Industrialisation Summit (GMIS), titled Focus on the United States of America.

In a wide-ranging talk, the moderator, Paul Markillie, Innovation Editor, The Economist, began by asking if manufacturing was still relevant to the US economy.

“Manufacturing in the US has grown,” said panellist Dr. Susan Helper, the Frank Tracy Carlton Professor of Economics at the Weatherhead School of Management, Case Western Reserve University, and Former Chief Economist at the US Department of Commerce.  “But we’re at an intermediate stage. Between 2000 and 2010 we lost a third of our manufacturing jobs, between 2010 and 2013 we grew 800,000. Since then it’s been relatively stagnant.”

Dr Helper said pick-up in jobs was down to the rescue of the auto industry and an increase in research grants, as well as increased awareness by the private sector of the hidden costs of overseas production, such as reduced flexibility and a disconnect between innovation and manufacture. But she warned the quality of jobs is not being improved by technology. While some engineering jobs may be picking up, more “Really horrible jobs are being created at minimum wage, with no training,” she added. “We’ve actually seen an increase in industrial accidents in the US, and a third of manufacturing workers are eligible for public assistance. So I think our policies have to say which direction we want to go; not just public policy, but also corporate policy. Can corporations get out of their silos and recognise the potential of investments in training in innovation, not just in the US but in other countries as well?”

Danny E. Sebright, President of the US-UAE Business Council, agreed that manufacturing may not bring the better jobs promised by Donald Trump on the campaign trail. “A central component of President Trump’s platform was restoring manufacturing jobs, perhaps to an idealised past; of bringing back high paying factory jobs that just don’t exist anymore, that have left the US and are never coming back. That said, the US does still manufacture a lot – our total industrial output increased by 250 per cent from 1980 to 2015. What’s changed, is the decrease in the workforce because of automation and, to a lesser degree, outsourcing.”

Manufacturers contribute over US$2.17 trillion to the United States economy and employ nine per cent of the total workforce, according to the National Association of Manufacturers, and the sector is a major driver both of exports and inbound foreign direct investment (FDI). Asked whether the new president’s policies would lead to a more inward looking America, both agreed, but also thought that this might not be a bad thing.

“The US has been the engine of growth for the world,” said Dr Helper. “And one reason our manufacturing jobs growth has stagnated has been austerity in Europe. So, a more inward focus may be quite beneficial.” She said it was time to take stock of the focus in innovation and training, and cited trade deals, such as NAFTA, which may have added growth to GDP, but had at the same time driven down wages for the bottom half of society.

Sebright said: “I think many business leaders were very enthusiastic about Donald Trump becoming president. After all, he is a businessman, and he has surrounded himself in government with fellow businessmen and women.  He’s held meetings with automotive groups, retail chains, drug companies, airlines and other industries. He created a National Manufacturing Council comprising 28 CEOs to advise him on issues such as infrastructure, tax reform and workforce training – all of which will play a part in the manufacturing policy of the future.”

For all the talk of innovation, though, he said the policy aspect manufacturers were most interested in are the cuts in regulation, and tax reforms. “In cutting environmental regulation, he’s already delivering,” he said Sebright.

Dr Helper argued that cuts in regulation don’t necessarily translate to growth: “Regulation has costs, but it also has benefits as well. Studies have been done that say the benefits can be two or three times the cost.” She cited the automotive industry, where average fuel economies may be rolled back – a move, she said, that could seriously damage automotive exports to countries with high fuel costs.

Sebright was more cautious over the president’s potential protectionism, however, raising concerns, over the US stance towards China and expressing his surprise that the voice in favour of free trade had shifted from Washington to Beijing.

Dr Helper said, that rather than closed or open, there needs to be third way in trade: one based on innovation and not exploitation of workers. “Free trade isn’t free, anyway,” she said “If trade was truly free, these agreements wouldn’t be 3,000 pages long,” She said. Instead of deciding tariffs and other technical details, she said, the trade agreements of the future should concentrate on improving workers’ conditions. “We’re close to full unemployment now, anyway. What we need to focus on is quality of jobs, not quantity.”

The inaugural Global Manufacturing and Industrialisation Summit is taking place at the Paris-Sorbonne Abu Dhabi, UAE, until March 30, 2017, under the patronage of His Highness Sheikh Mohamed bin Zayed Al Nahyan, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the UAE Armed Forces. The Summit, which is co-chaired by the UAE Ministry of Economy and the United Nations Industrial Development Organization (UNIDO), is the world’s first global gathering for the manufacturing community, bringing together decision-making leaders from governments, businesses and civil society organisations to shape a vision for the sector’s future.

The Summit is a global platform for participating attendees to learn from best practices from across the world. This unprecedented global gathering will spark new ideas and set the stage for debate and action – addressing ways in which manufacturing can shape and reshape the world, integrating activities between developed and emerging markets, and delivering on social responsibility towards future generations. Leaders from the public and private sectors, along with representatives from civil society organisations, will gather to discuss global challenges within the manufacturing sector, looking specifically at six themes: technology and innovation; global value chains; skills, employment and education; sustainability and environment; infrastructure; standards, and stakeholder alignment.

About the Global Manufacturing and Industrialisation Summit

As the world’s first cross-industry forum, the Global Manufacturing and Industrialisation Summit is a global gathering for manufacturing minds. It is a voice and a venue for global manufacturing transformation. More than 1,200 delegates will attend, including world leaders, industry CEOs, policy-makers, specialist researchers and academics. The Global Manufacturing and Industralisation Summit will deliver (i) a voice for transformational ideas, (ii) a venue for the generation of new networks and cross-industry partnerships, (iii) a showcase for pilot projects arising from cross-industry research,

Global Agenda on the Future of Manufacturing

The conference will focus on the role of manufacturing in reconstructing the global economy and restoring global prosperity. Leaders from the public and private sectors, along with civil society representatives, will gather together to discuss global challenges facing the manufacturing sector. The discussions will focus around six themes: technology and innovation; global value chains; skills, employment and education; sustainability and environment; infrastructure; standards and stakeholder alignment. The participants will form working groups to identify concrete action plans and recommendations that outline potential solutions to global issues, as well as showcase best practices and case studies from across the world. To highlight an example of global issues, the inaugural conference will focus on the issue of economic migration, with the aim of establishing a manufacturing platform that will bring together countries facing emigration or immigration challenges with regional countries that seek to support economic reconstruction. These countries will work together with manufacturers and the wider United Nations network on restoring global prosperity.

The Manufacturing Expo

Capitalising on the huge presence of the global manufacturing community under a single meeting venue, the Manufacturing Exhibition will offer space to corporations looking to showcase their products, services and latest innovations or technologies that can further contribute to promoting global economic development. The Manufacturing Expo consists of four components: an exhibition showcasing the manufacturing capabilities of the host country; international pavilions showcasing the manufacturing capabilities and economic incentives of each participating country; an innovation exhibition that demonstrates the latest fourth industrial revolution technologies; and an event for SMEs to present their products and solutions to potential customers.

The Global Value Chain Market

The Global Value Chain Market (GVCM) is a business matchmaking platform dedicated to increasing regional and international partnerships and opportunities. The platform will provide networking and sourcing opportunities both online and onsite via pre-scheduled meetings with the vision of forging investment opportunities, commercial partnerships, and encouraging technological transfer and knowhow. The platform will enable countries to identify and meet global manufacturers to promote industrial development, and familiarise global manufacturers with targeted industrial activities in various countries. The GVCM will become a source of valuable information for global investments, providing insights on legislation and regulations, sovereign risk, political stability, and physical and logistical infrastructure.

For additional enquiries contact:

ASDA’A Burson-Marsteller
Mohammad Shaban

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