Government initiatives to boost manufacturing ignore small business. Here's a better solution.
In August 2012, the future of manufacturing arrived in Youngstown, Ohio. Or, at least, that was the U.S. government's plan. The city is home to the National Additive Manufacturing Innovation Institute, a federally funded research and development facility focused on 3-D printing. In the past year, the institute has signed up about 80 members and selected seven projects to receive $4.5 million in funding.
The institute is also a prototype for the National Network for Manufacturing Innovation, the cornerstone of President Obama's plan for resurrecting the U.S. manufacturing industry. Since August, Congress has been considering the Revitalize American Manufacturing and Innovation Act, which would authorize funding for a network of up to 45 research and development hubs.
The innovation hubs make for a great sound bite. But small businesses are being left out of the process. The 3-D printing institute's 80 members consist mainly of large companies and universities, and the board is dominated by Raytheon, Northrop Grumman, Lockheed Martin, and other huge corporations. Dale Dougherty, co-founder of O'Reilly Media, publisher of Make magazine and creator of Maker Faire, says the lack of small-business participation was apparent when he visited the facility in August. "It felt like more of an alliance of the industrial market," Dougherty says. "It would be like IBM and Digital getting together in the '80s and leaving out Apple and Microsoft."
One possible reason is the price tag: The institute's annual membership fees range from $15,000 to $200,000. "They've already priced me out of coming back," says Jason Gromek, founder and president of BioDevice Design, a design and engineering firm in Brecksville, Ohio. Because Gromek's company helped establish the institute, his membership fees were waived for one year. Gromek had no plans to renew his membership when it expires this fall. "I'm a small, dynamic company," Gromek says. "But this isn't tailored to small companies."
The U.S. manufacturing sector is showing signs of a rebound, sparked by rising production costs in China and increased demand for U.S. goods. Uncle Sam could have a role in helping to further the U.S. manufacturing renaissance, but it should eschew photo ops in favor of practical steps that benefit makers of all sizes. Here are two.
Upgrade Our Ports
To attract more manufacturers, America must revamp its ports, says Willy Shih, a professor at Harvard Business School and co-author of Producing Prosperity: Why America Needs a Manufacturing Renaissance. "Even a small backwater on the Pearl River Delta in China will have a larger or more efficient container port than the one here in Boston," Shih says. This summer marked the maiden voyage of the 1,312-foot-long Maersk Triple-E, the world's largest container vessel, which can carry about 9,000 40-foot containers. "Do you know how many U.S. ports can handle a Triple-E ship?" Shih asks. "Zero."
With a $5 billion upgrade set to double the capacity of the Panama Canal by 2015, more container ships will soon be reaching U.S. shores. Many ports are scrambling to dredge deeper shipping channels, install larger cranes, and boost overall capacity. Ports need help in the form of more public and private investments and streamlined regulatory processes, Shih says. Obama has signed an executive order expediting federal reviews of several infrastructure projects, including deepening the harbor in Jacksonville, Florida. But more ports need federal attention.
Train A New Generation of Factory Workers
Technological advances, including 3-D printing and robotics, are increasing the need for manufacturing workers with serious skills. In a 2011 Manufacturing Institute survey, 67 percent of manufacturing executives reported a worker shortage. The Advancing Innovative Manufacturing Act, a bill that would authorize grants for manufacturing programs in community colleges, is being reviewed by a congressional committee. Similar legislation died in committee last year. Educators aren't waiting around: North Carolina's Central Piedmont Community College, for instance, has partnered with BMW, Siemens, and other firms to provide students with specific job skills. Despite advances in automation, you can't have world-class manufacturing without world-class workers.