Offshoring to the United States

Offshoring and re-shoring have been staples of the U.S. manufacturing vocabulary for the past decade, but there hasn’t been a lot of discussion about other countries offshoring to the United States. Chinese conglomerates have begun to shift their production and manufacturing to the United States. The incentive is this: in China, companies that export products to the United States at ridiculously low prices are subject to anti-dumping tariffs because the U.S. believes that the products are being sold at a price lower than what it cost to make them, which creates an unfair advantage in the marketplace. If a Chinese company manufactures their product here in the United States, it is a domestic product and is not subject to the same regulations. Raymond Cheng, CEO of one Hong-Kong consulting firms, noted that “it’s a tactical advantage to be next door to your biggest client,” which is just what the Chinese companies are looking for. In addition to avoiding tariffs, opening a plant in the United States saves money on transportation and fuel. Cheng continued to point out that “it’s a natural evolution that as Chinese companies grow into global brands, they will come to the U.S., the largest consumer in the world.”

Chinese manufacturers have been launching U.S. facilities for the past five years, which has been a relief for some states that are desperate for revenue and jobs. The China-based Golden Dragon Precise Copper Tube Group Inc., the world’s largest producer of copper tubing (used in air conditioning, refrigeration, and automobiles), has begun work on a $100 million plant in Alabama. The facility is expected to create 300 jobs upon opening in 2014. The facility’s location is strategic, since Golden Dragon’s largest customer is Houston-based Goodman Manufacturing.

Daniel Rosen, a China expert and partner at Rhodium Group, cites past examples of overseas companies setting up shop in the United States. Specifically, Japanese companies in the 1980s – for some of the same reasons. “Today, there are more than 700,000 Americans working for Japanese affiliates in the United States.” Offshoring to the United States might be an unexpected move, but Chinese companies will be creating local jobs and saving themselves money.

Posted by: Devon Thorsell

Source: CNN Money

Photo credit Factory in Inner Mongolia courtesy of flickr user Bert van Dijk

You Are Invited–Why the US is Not Destined to Decline: A Debate

Why the US is Not Destined to Decline: A Debate

Wed, May 2nd  – 4:00 to 5:30 pm

6th floor, Woodrow Wilson Center

Sponsored by International Security Studies and the History and Public Policy Program

A book launch and reception

To argue against the widely proclaimed idea of American decline, as this book does, might seem a lonely task. After all, the problems are real and serious. Yet if we take a longer view, much of the discourse about decline appears exaggerated, hyperbolic, and ahistorical. Why? First, because of the deep underlying strengths of the United States. These include not only size, population, demography, and resources, but also the scale and importance of its economy and financial markets, its scientific research and technology, its competitiveness, its military power, and its attractiveness to talented immigrants. Second, there is the weight of history and of American exceptionalism. Throughout its history, the United States has repeatedly faced and eventually overcome daunting challenges and crises. Contrary to a prevailing pessimism, there is nothing inevitable about American decline. Flexibility, adaptability, and the capacity for course correction provide the United States with a unique resilience that has proved invaluable in the past and will do so in the future. Ultimately, the ability to avoid serious decline is less a question of material factors than of policy, leadership, and political will.

Author Robert J. Lieber will discuss his new book, Power and Willpower in the American Future: Why the US is Not Destined to Decline. He will be joined on the panel by Michael Mandelbaum.

Visit www.wilsoncenter.org/Directions for a map and directions to the Wilson Center.

If you wish to attend this event, please send RSVP to iss@wilsoncenter.org.

The Importance of Intellectual Property in the U.S.

Most experts and policymakers are aware of the critical role innovation plays in the U.S. economy.  It underpins our competitive advantages and is the source of continued economic growth and prosperity.  As America seeks to regain its competitive edge in the wake of the Great Recession, innovation remains a major point of discussion in policy circles.  A key factor that has enabled America’s strong innovation environment is intellectual property and its standards.  A solid intellectual property (IP) regime, and the rights it guarantees, provides innovation incentives and protections, creating a climate the rewards risk-taking, creative thinking, and ceaseless advancement.  It’s safe to say that intellectual property is important to the U.S. economy, but just how important?

The U.S. Department of Commerce just released a joint report from the Economics and Statistics Administration and the U.S. Patent and Trademark Office that goes a long way in answering that question.  The report cites that IP has both direct and indirect benefits for almost every industry, and these benefits flow upstream and downstream in the production chains.  IP is used “everywhere in the economy” and the rights granted to holders of IP “support innovation and creativity in virtually every industry.”  While all industries rely on some form of IP, the report identifies 75 industries as “IP-intensive,” approximately one quarter of all domestic industries.  They account for almost 20% of all U.S. employment and tend to pay average weekly wages at a 42% premium.  In addition, every two IP-intensive jobs support another one indirectly, thereby raising attributable employment to almost 30% of total employment. These industries account for over $5 trillion in value-added to U.S. GDP and contribute to over 60% of total goods exports and roughly 20% of all services exports.

The data above clearly support the vital importance of intellectual property to American innovation and the economy at large.  This understanding makes it critical that the United States continue to protect intellectual property at home, and especially abroad.  It is a primary source of U.S. exports and the root of its competitive advantage in trade.  The continued protection of American ideas and intellectual capital promotes “innovative, open, and competitive markets, and helps to ensure that the U.S. private sector remains America’s innovation engine.”

Posted by Brian Gowen

Sources: The U.S. Department of Commerce

Photo credit USPTO@Alexandria courtesy of flickr user cytech

Robots in the Military

The U.S. military has become increasingly dependent on robots in the last 10 years, stemming from operations in Iraq and Afghanistan. In fact, in 2004, the U.S. Army only had 162 robots; now it boasts 7,000. The robots are used for a variety of purposes including, “scout for booby traps and roadside bombs” and “lift heavy objects. There are robots that can be “tossed through a window to check out a room” before soldiers enter the premises. Unmanned vehicles such as drones have become regular features of battle.

However, with the wars in Iraq and Afghanistan winding down, there is some concern that funding for robotics programs linked to military endeavors will be eliminated. On the other hand, leaner military budgets might actually increase the acquisition of robots since there is a “heightened emphasis to do more with less,” says a senior equity analyst at BB&T Capital Markets. In the grand scheme of the things the United States would prefer to have fewer boots on the ground in any military operation, therefore safeguarding the lives of American soldiers.

Major robotics companies like iRobot Corp. and QinetiQ are often supported by regular Defense Department budgets, so their programs shouldn’t be affected by the winding down of wartime operations abroad. Military robotics are taking the place of older specialized (read: special-ops) equipment like night-vision goggles which are now widely available to troops. The unmanned aspect of military procedures is an attractive outcome of the increased research and development spending in advanced technology sectors. Additional outcomes include decreased wartime spending and decreased casualties because of the ability of robots to multiply the military force of an operation without increasing troop numbers.

Posted by: Devon Thorsell

Source: The Wall Street Journal

Photo credit Talon robot courtesy of flickr user QinetiQ group

Grants for training women in nontraditional occupations

The U.S. Department of Labor announced on April 5 the availability of around $1.8 million in grants to support training and apprenticeship programs for women in “nontraditional occupations.” The grants, which will go towards improving the training and employment of women in “industries such as advanced manufacturing, transportation and construction,” were made available mainly to meet increasing demand for skilled workers. Jobs with changing “work and worker requirements,” as well as “new and emerging green occupations,” were also targeted.

Grant recipients must use funds not only for unemployed and dislocated workers, but also incumbent workers – those who are currently employed but require training in order to secure new employment or advance in their careers.

The Department of Labor’s Employment and Training Administration (ETA), which works with the Women’s Bureau in administering this grant, aims to develop the American workforce through training and employment services. Besides grants, the ETA has a number of job training programs and other resources to contribute to the U.S. labor market.

Posted by: Pokyee Yu

Sources:  The U.S. Department of Labor, the Employment and Training Administration, the Women’s Bureau

Photo Credit: Women in construction courtesy of flickr user University of Salford

TOMORROW- You are Invited and Live Webcast-The Start-up Act: Building America’s Entrepreneurial Future

The Program on America and the Global Economy Presents:

 The Start-up Act: Building America’s Entrepreneurial Future

 Tuesday, April 24, 2012

Joseph and Claire Flom Auditorium, 6th Floor, Woodrow Wilson Center

________________________________________________________________________        

 8:30 a.m.

Registration and Continental Breakfast

 9:00-9:45 a.m.

Keynote Address:

Senator Jerry Moran, Kansas

Senator Mark Warner, Virginia

 9:45 a.m.-12:00 p.m.

 Panel Discussion:

Paula Collins, Vice President, Government Relations, Texas Instruments Incorporated

Toby Smith, Vice President for Policy, Association of American Universities

Audrey Singer, Senior Fellow, The Brookings Institution

 Moderated by: Kent Hughes, Director, Program on America and the Global Economy

 ________________________________________________________________________

Senators Warner and Moran will discuss key components of their Start-up Act, which they authored and introduced.  A panel discussion will follow with an examination of the prospects of accelerating the commercialization of university research, increasing opportunities for immigrants with advanced STEM (science, technology, engineering, and Mathematics) degrees and adding a STEM category for immigrant investors seeking permanent residence.

 ________________________________________________________________________

Please RSVP acceptances only to page@wilsoncenter.org

Watch the live webcast here.

Directions to the Wilson Center: www.wilsoncenter.org/directions

The M in STEM

STEM (Science, Technology, Engineering and Math) education is a hot topic when discussing  K-12 education reform, but it seems as though some of the categories are getting more attention than others. Science and Technology are especially popular; the White House Science Fair and First Robotics reward innovation in science fields which often involve invention and independent research by students.  However, the excitement over STEM education hasn’t been as effective at popularizing the final category: math. An article by Reuters addressed this issue, and what people, private companies and internet learning sites are doing to combat the “uncoolness” of math.  “America has a cultural problem with math. It’s the subject, more than any other, that we as a country love to hate,” said Glen Whitney, a mathematician who develops algorithms for hedge funds. Whitney has since raised $22 million to build a Museum of Mathematics in New York City, due to open this fall.

The internet has also become proponents of math education. Khan Academy has hundreds of math related videos that cover topics from arithmetic to differential equations. DimensionU and MIT have taken a different route, by encouraging kids to play math games online, they become eligible to win prizes such as a tablet computer or a scholarship.

These recent developments in math education come in response to the lackluster rankings of U.S. high school students in math. While Americans do fairly well in elementary and middle school math, they begin to score below students from countries such as Slovenia and Iceland by age 15. Additionally, many high schools in the United States don’t offer advanced math, so there are fewer opportunities for students to excel.  Math teachers today blame the traditional approach to teaching math: classes aren’t creative enough; they aren’t fun. “It’s as if you took a little kid who really liked music and wanted piano lessons and said, ‘We’re going to have you practice scales and chords for the next 15 years, and then and only then will we teach you music,'” said Kathy Morris, an education professor at Sonoma State University in California.

Initiatives are underway in a few states for a common core curriculum that emphasizes reasoning and puzzle-solving math skills; initiatives that are gaining momentum from major corporations and philanthropies like Google and the Bill & Melinda Gates Foundation. Partnerships like these are a key to success: they have pledged to raise $24 million in order to recruit and train 100,000 new math and science teachers in the next ten years.

Posted by: Devon Thorsell

Sources: Reuters, DimensionU, Khan Academy

Photo credit: Calculator and notebook courtesy of flickr user THEMACGIRL*