This is a key moment to attract more U.S. business investment
We are entering a period in which the United States is becoming a strong magnet for more business investments and good jobs in manufacturing.
On Thursday, I saw this first hand in the Salt Lake City area. There, the advanced composites industry — which makes lightweight materials for everything from planes to wind turbines — is booming. I toured a factory where a company, Hexcel, recently launched two new production lines.
For many reasons, the U.S. is poised to see even more job-creating investments from both domestic and foreign companies in the coming years.
For example, low energy costs and a stable supply of energy are becoming strong advantages for the U.S., particularly among energy-reliant companies deciding where to locate their next facility. The U.S. now imports less than half of the oil we consume, and strong domestic natural gas production has led to prices just one-fourth that of Europe’s.
In addition, the U.S. has a rising competitive edge in labor costs and productivity. In China and other countries, wages have grown along with a new urban middle class, reducing the labor-cost advantage they once had. Meanwhile, the hourly output of U.S. manufacturing workers is about 9 percent higher today than it was before the recession.
Also, growth forecasts for the U.S. economy — driven by consumer spending — look good, particularly in comparison to our global competitors. European growth has slowed, and some Asian countries aren’t maintaining their previously-high growth rates.
These three trends build on America’s longstanding strengths, such as having the world’s top research institutions and strong intellectual property protections.
Due to all of these compelling advantages, we should do everything we can — right now — to make the most of this moment, building on the half-million manufacturing jobs we’ve added in the past three years.
That’s why the president’s just-released budget for 2014 calls for the Investing in Manufacturing Communities Partnership (IMC), an administration-wide initiative led by the Commerce Department. Through the partnership, we will improve how we use federal resources to support economic development, working to make American communities even more attractive for business investment.
IMC will challenge communities to coordinate their regional economic development efforts. We want them to think strategically about making targeted, long-term investments that will, in turn, create the best possible environment for manufacturing and supply chain investments.
Next year, the Commerce Department would provide $113 million in IMC funding support — matched with funds from local public and private sources — for about five communities across the nation. Along with our federal partners, we will invest in key projects such as a new research or tech transfer program, a physical infrastructure improvement or a workforce development initiative.
Again, community-wide commitment to take the difficult steps to reinvent the local economy will be crucial.
To complement these locally-driven efforts, we must also increase international outreach. Already, through an initiative called SelectUSA, we are working to help foreign firms and investors understand the “why” and “how” of investing in the U.S.
The president’s new budget proposes to provide $20 million to fully support SelectUSA. (Notably, competitor countries are already spending over $50 million annually on their own similar programs.)
With this support, SelectUSA will work at the national level to empower more U.S. mayors and governors who increasingly find themselves competing with a foreign city or country for global investment dollars.
We’re moving forward with the first-ever SelectUSA Investment Summit on Oct. 31 and Nov. 1 in Washington, D.C. Economic development leaders from across the U.S. will meet investors from around the world.
Our objective is clear. Let’s position America’s communities to win more investments and more jobs by building on the strengths that are making our nation a powerful magnet for manufacturing.
After all, when companies like Hexcel choose to build and expand in U.S. towns and cities, our middle class grows stronger, our economy thrives and the next generation will find good jobs.
Rebecca Blank is the U.S. deputy secretary of Commerce.