Innovation at Risk

A new report, U.S. Manufacturing Innovation at Risk, by Dr. Joel Popkin (available at www.nam.org/Popkinreport) indicates there are five clear warning signs pointing toward downward trends in U.S. manufacturing innovation. The result of these trends could be lower economic growth and living standards in the U.S. Manufacturing output has had 15% growth since the last recession. This is about half the pace averaged over the last half-century.

  • Manufacturing capacity remains underutilized. Since the last recession, total plant and equipment investment has risen at half the pace averaged in recoveries of the past half-century. Manufacturing capacity has grown at less than 1% annually.
  • The U.S. share of global trade in manufactured products has decreased. The drop has been from 13% in the 1990s to 10% in 2004.
  • The widespread perception that U.S. manufacturing employment as unstable and lacking in job opportunities discourages new-worker entry. This sector is experiencing a broadening shortage of skilled workers.
  • The U.S. might spend more on research and development, however its growth in R&D as averaged about 1% per year in real terms since 2000.

Sources: National Association of Manufacturing and the Council of Manufacturing Associations

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