CLEVELAND—Susan Helper, chief economist for the Economics and Statistics Administration of the U.S. Department of Commerce, thinks manufacturing is critical to innovation.
There has been a perception for a long time that manufacturing is "dirty, dumb and dangerous" and that the work can be sent overseas, Helper told the audience at the City Club's recent Business Leaders event in Cleveland. But when a country moves its production offshore, it loses both jobs and the opportunity to innovate.
The evidence is starting to show that "if you want to keep innovating, you've got to keep producing," Helper said.
Helper, a Case Western Reserve University professor of economics on leave, was named to the chief economist post last July. She previously was a senior economist on the staff of the White House's Council of Economic Advisers.
In her speech, Helper highlighted the possibility for innovation in modern manufacturing and discussed the strengths of industry clusters for regions, identifying both as areas that need industry attention and public policy support.
She also talked about the importance of manufacturers considering value, not just price, when making supply chain decisions. A project of the Commerce Department — the Assess Costs Everywhere tool — helps companies compare all the costs of producing goods overseas, instead of just taking upfront costs such as taxes into account.
Manufacturing creates important "spillover" benefits for the rest of the economy, she said, mentioning wages, employment and innovation in particular. The industry's higher-than-average wages help put money into the economy, while the need for a strong supply chain and for services to support manufacturing lead to a large employment multiplier.