I came across an interesting article in The Economist about the president, chairman and CEO of Dow Chemical, Andrew Liveris, and his views on reviving American manufacturing. Liveris, who studied chemical engineering at the University of Queensland before joining Dow Chemical, published a book earlier this year entitled "Make it in America: the case for re-inventing the economy".
In the book and the interviews he has given surrounding its publication - see for instance NPR and Knowledge@Wharton - he advocates for a move toward advanced (as opposed to basic) manufacturing, to exploit the current trends of "clean energy, health and nutrition, rising consumerism in emerging markets and investment in transport and infrastructure."
Here is a quote I found particularly interesting, from the NPR transcript: "outsourcing based on wages has really become the storyline of manufacturing, and I think that's wrong. It is more complicated than that. Take Dow as an example. We built this R&D center in China. We now have 500 Chinese scientists working there, and they earn incredibly good money."
His plan to improve America's competitiveness in manufacturing has the following high-level components:
- train more engineers,
- attract more foreign talent ("over 1m jobs in science and technology will open up in America this year but only 200,000 new graduates will have the skills to fill them.")
- promote clean energy,
- reduce costs to do business in America, in particular through a decrease in the corporate tax,
- make the research-and-development tax credit permanent,
- offer tax advantages to companies that build plants in the US.
He further describes his plan in an op-ed he wrote for USA Today last year. He has certainly promoted advanced manufacturing at Dow so far, with the opening of new factories in Michigan such as one making lithium-ion batteries (a family of rechargeable batteries), which has led to the creation of nearly 2,000 jobs.
The Economist writer points out that "America [already] offers many subsidies fror manufacturers. Dow has had hundreds of millions of follars from local, state and federal taxpayers" and wonders whether taxpayers benefit from this arrangement.
A commenter to the Economist article (neil_dr) points out: "His proposal to reduce tax and increase the number of immigrant would help his organization with lower taxes and cheaper labor cost but how will it benefit other Americans ? The unemployed labor force will never have the opportunity of getting re skilled as the availability of immigrant labor would make that unnecessary."
But there is little doubt that a strong manufacturing sector is important for a healthy economy. 76% of Economist readers who participated in a recent debate on the publication's website voted that "this house cannot succeed without a big manufacturing base".