1 Thing Stands in the Way of an Innovation-Led Manufacturing Recovery
It’s no secret that our nation’s comeback is tied to a burst of innovations. But those innovations can’t happen without intellectual property -- property with rights that we must protect. If we do it correctly, we’ll create a surge of job growth, because what we offer in the U.S. will be unique.
If we do it wrong, our intellectual property will become a commodity, and the innovations we create will go the way of car parts and other commodity goods -- overcome by a rush of cheap imports.
I cofounded and am the chairman of the National Alliance for Jobs and Innovation. We are an organization of almost 400 manufacturers demanding protection of our intellectual property. Here’s what we’ve learned. Harvard economist William Kerr recently conducted a study that we unveiled this morning; it showcases starkly, in black and white, the devastation that we suffer when we don’t protect our property. According to Kerr, our nation lost more than 42,000 jobs in manufacturing and $239 billion dollars in revenue because of the brazen theft of our software.
This must stop. Our nation’s leaders must enforce the protection of our intellectual property, this country’s secret sauce. Now, in the midst of a precarious recovery, is the time to protect U.S. workers.
For 30 years, my company sold commodity products and we did well, like most U.S. manufacturing companies did. But when the market cratered, the good times came to a halt. Why? Marlin Steel, like so many commodity manufacturers, was devastated by cheap foreign imports that used certain "techniques" U.S. companies didn’t -- techniques like currency manipulation; subsidized wages; low wages (yes, I believe that’s a bad thing); no benefits for their workers (another bad thing); subsidized export promotion; and subsidized materials.
In contrast, I was paying my workers livable wages, with health insurance, retirement plans, and performance bonuses. And like all U.S. manufacturers, I was taxed when I exported. With this onslaught of disadvantages, U.S. commodity factories fell apart. Workers lost their jobs.
Marlin Steel was able to transform into a manufacturer of highly engineered products. The shift required a massive investment into intellectual property, and today, 20 percent of our employees are degreed mechanical engineers pumping out unique innovations for material handling baskets and racks. It is critical we make our baskets unique from cheap Chinese imports, and that’s what we’re doing. So are many others in this country, a survival technique I call growing an innovation machine.
Innovation is U.S. manufacturing and Marlin Steel’s secret sauce. This pursuit of innovation and intellectual property makes us distinct and is critical for our nation’s success. We are not going to thrive with lower and lower wages for our team. Our success is rooted in generating unique products that add a lot of value to our clients -- products that set us apart from the cheap imports and ultimately lead to more job growth.
But this only works if foreign companies aren’t permitted to copy our property, infringing on our rights.
Drew Greenblatt is the president of Marlin Steel, a U.S. manufacturer of steel wire baskets and sheet metal fabrications. Marlin Steel Wire has grown sevenfold since 1998 and gone more than 2,050 straight days without a safety accident, and believes passionately in the American manufacturing renaissance.