And the question, yet again, is whether U.S. manufacturing is coming back?...
As Alliance for American Manufacturing (AAM) President Scott Paul observed yesterday in a Bloomberg TV interview, he's "cautiously optimistic" that U.S. manufacturing is on the upswing. Paul said that manufacturing has regained some jobs, and factory capacity figures show an uptick.
Whether manufacturing is ready yet to create jobs shouldn't be the only issue of concern, though. According to Scott Andes and Mark Muro at the Brookings Institution, manufacturing remains a key driver of the U.S. economy.
The two argue that advanced manufacturing is essential to the U.S. economy because it is the main source of innovation and global competitiveness for the United States. They say advanced manufacturing is the U.S. pipeline for new products and productivity-enhancing processes:
While the sector makes up just 11 percent of the economy, manufacturers conduct 68 percent of private sector R&D, as reported by our colleagues Sue Helper and Howard Wial last year. And on average, they noted, 22 percent of manufacturers introduce new processes to increase productivity compared to just 8 percent of non-manufacturers. This is important because innovation that emerges from America’s manufacturing sector also fuels growth within the service sector because intermediary goods—the machines used by services (e.g. automated self check-out kiosks at grocery stores)—drive service sector productivity.
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