This has hurt America’s competitiveness and our ability to innovate.
But the trend is shifting, and across the Obama administration, we have put in place programs that attract more production, more investment and more jobs back to our shores.
Caterpillar, GE and Ford, for example, are among those that have recently announced they are shifting some manufacturing operations back to the United States.
The reasons are clear. In an article about onshoring GE’s appliance manufacturing to Kentucky, CEO Jeff Immelt wrote that “engineering and manufacturing are hands-on and iterative, and our most innovative appliance-design work is done in the United States. At a time when speed to market is everything, separating design and development from manufacturing didn’t make sense.”
This trend is likely to continue as companies recognize higher U.S. worker productivity, rising labor and energy costs abroad and logistical advantages here at home. Couple that with global demand for high quality American-made products, and it is hard not to be bullish about America’s long-term opportunities.
The key now is building capacity and investing in our country’s small business supplier base so that these firms can better support global manufacturers and help bring more jobs back to the United States — and both the government and the private sector have a role to play in making this possible.
The United States has some of the world’s most innovative small suppliers and entrepreneurs. We have the types of small businesses that, with the right support, can go toe-to-toe with China (particularly on the higher end of the value chain) or with Germany’s famed Middlestand companies.
Businesses around the world are taking notice. Foreign companies like Lenovo, Ikea, Nissan, Airbus, Siemens are starting or growing U.S. operations, and they are looking for networks of U.S.-based suppliers to support them.
So how do we build on this momentum?
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Today, U.S.-based, forward-thinking companies are looking at their supply chains very differently. They are working together to co-innovate, they are helping supply the capital and skills their small suppliers need, and they are operating as partners.
At the U.S. Small Business Administration, we are leading a government-wide effort called the American Supplier Initiative to support small suppliers.