Nick Smith, June 8, 2003

Manufacturing has been America’s economic strength. For three decades now, manufacturing productivity has increased more than one percent a year faster than overall productivity. The average manufacturing worker produces four times as much per hour as the average worker did fifty years ago. As a result, manufacturing has been one of the most important parts of the economy and has produced higher living standards for Americans as products become cheaper and better and as wages in manufacturing rise.

With manufacturing suffering in recent years, other industries such as the service sector have offered employment. The trouble is that manufacturing cannot be simply replaced by insurance, the legal profession, or retail trades. There are only four economic sectors that generate material wealth: agriculture, mining, manufacturing and construction. Of those, only manufacturing is not limited by natural resources and is capable of export.

We need innovation to produce better products at competitive prices to regain our manufacturing leadership. We can’t pay American-level wages unless we do things smarter than they can elsewhere. Innovation starts with basic research, followed by application and commercialization. As Chairman of the Research Subcommittee, I’m familiar with the government’s efforts to fund and promote basic research, mostly through the National Science Foundation (NSF). NSF has seen substantial increases in recent years and we need to ensure that this money is spent in ways that research discoveries can have the greatest impact in terms of promoting innovation and practical application.

The development of basic research for industrial use has generally been the province of businesses, which undertake these efforts to create new products. Unfortunately, according to witnesses at a recent Science Committee hearing, application is the hardest part. Companies facing intense competitive pressures find it difficult to set aside sufficient resources to develop new products, especially if results can’t be anticipated in the next five to six years. Development also suffers from low prestige. The academic community and federal grants generally reward those who seek knowledge for knowledge’s sake, rather than those who do the necessary development work. Some foreign countries monitor our government-funded basic research and spend money to apply that research for commercial products before our companies do.

Another problem we face is a shortage of math and engineering talent. The United States has long lagged far behind other nations when it comes to producing top-notch engineering and research talent. Today China produces ten times as many engineers as we do. This can’t continue to go on without erosion in our international competitiveness. That’s why I’ve pushed NSF to do a better job of promoting math and science careers to students. We need more capable math and science students for research and business.

The decline in manufacturing employment is something that we ignore at our peril. Over the long term, we cannot hope to have a healthy and growing economy unless we make lots of tangible goods that people want to buy both in the U.S. and overseas markets. Government needs to support not only basic research, but provide incentives for American business to apply it to ensure our economic health.

Congressman Nick Smith represents the 7th District Congressional of Michigan in the U.S. House of Representatives.