Manufacturing

American manufacturing is in a quiet crisis. Low productivity growth and decades of job losses have meant that U.S. manufacturers no longer have the capacity to produce entire categories of goods competitively and at scale. To some, this might not seem like a crisis. Unemployment for the last decade has been comparatively low, and inexpensive imports have continued to satisfy American demand for industrial and household goods. But the weakness of American manufacturing has come with costs for national security, domestic innovation, and consumers at the mercy of global supply chains.

Without a strong domestic industrial base, the U.S. military struggles to source the most advanced technology domestically. Innovators benefit from having the capacity to produce goods near where they are engineered. And in an emergency like a pandemic that shocks the global economy, consumers benefit from reliable domestic sources of supply. The American manufacturing crisis has been quiet because these costs rarely show up in headlines about layoffs or factory closures. Instead, they manifest as missed opportunities to advance government capabilities, middle-skill jobs, and domestic innovation.

There is an alternative path for U.S. manufacturing. Amidst national challenges, some American manufacturing firms and regions have experienced dramatic advances in their technological capabilities, productivity, and wages. These cases represent models for what the U.S. manufacturing economy can achieve. The manufacturing research agenda at the IPC is to understand how some manufacturers thrive as others struggle — and what policies and practices can help replicate the successes of thriving American factories.