The U.S. can still remain a manufacturing force in the world, but it will take action from both business and government to make it happen, according to the keynote speaker at the International Silicone Conference.
``I don't feel protectionism is the way to go,'' said Bradley Knox, oversight counsel for the U.S. House Committee on Small Business, which is chaired by Rep. Donald Manzullo, R-Ill.
Instead, such actions as maintaining the president's tax cuts, finding ways to reduce health care costs, strictly enforcing trade rules and concentrating first on American jobs were just a few of the points Knox made in ``An American Jobs Agenda,'' the title of his talk at the conference, held May 25-26 in Cleveland.
``Members of the House, having constituents, are very aware of the issue because they hear from those constituents,'' Knox said in an interview following his speech. ``Some say the way to deal with it is to erect trade barriers. That's not effective. You may want to close doors today, but you may want to grow later. What you have to do is hold countries accountable to the rules in place.''
That means the trade problems are a question of having a level playing field-not an issue of free trade vs. protectionism, he said. China and India impose a myriad of tariff and non-tariff barriers limiting reciprocal access to their countries while actively seeking to sell goods in the U.S.
``To a large extent, we've allowed this to happen,'' Knox said. ``If we're playing by the rules and they're not, it's not a level playing field. Their middle class is bigger than our entire population. They're extremely smart, energetic, and they're hungry to have what we have here.''
Reducing the cost of health care-or at least curbing the double-digit annual percentage increases-also must be a priority. ``The cost of health care is becoming overburdensome,'' he said. ``It's the No. 1 concern for businesses of all sizes.''
One potential remedy would be for the Senate to follow the lead of the House and pass legislation to allow smaller companies to get group health care plans through associations. ``This is keeping jobs from being created,'' Knox said. ``Some small companies have had to cut benefits altogether.''
Companies also need to start thinking again from a long-range point of view, rather than just trying to play to Wall Street, according to Knox. He noted that some larger firms actually have decided not to do quarterly earnings estimates-and haven't been hurt by the decision.
Unfortunately, some medium-size companies can't afford to do that or they won't get any analyst coverage. ``You live or die by what analysts say to you,'' he said. ``More big companies need to make that decision. Taking a short-term quarterly outlook causes you to make bad decisions for your business.''
Making the tax credit for research and development permanent also is critical to the U.S. maintaining a technological edge. U.S. companies used to own from 60-70 percent of new patents, but that percentage has dropped to just more than half.
``How do we stay on top of the game?'' Knox asked. ``It used to be because of R&D. That's not so in the last 10 years.''
The U.S. also must keep the tax credit for buying new capital equipment in place. One conference attendee said he wouldn't have purchased a $200,000 machine recently if not for the tax break in place.
Knox also put the onus on domestic corporations to put a priority on maintaining a strong U.S. work force. And it's not just blue-collar jobs the nation is losing. He said electrical engineers currently have a 7-percent unemployment rate-triple the normal rate and higher than overall unemployment.
``How is it that foreign companies come here to hire the same people our U.S. multinational corporations say are too expensive to hire?'' he asked. ``Foreign investment (in the U.S.) continues to grow. They want the quality of work and access to the market.''
Not that the government expects U.S. companies to have all their jobs here. ``We need them to be globally competitive,'' he said. ``We want them to control markets.''
Knox, however, insists that not all hope is lost. What's critical, he said, is that people are asking questions now, but part of the issue will be educating society that manufacturing matters.
``They see that 80 percent of (gross domestic product) is tied to services, so they think that manufacturing doesn't matter,'' he said. ``We must be able to convince them that our ability to remain a superpower is related to manufacturing.''