The Future of Manufacturing

New regulations and the organizations working to make it better

In July 2017, the National Association of Manufacturers (NAM) released the results of a joint study on the US public perception of manufacturing.  Believe it or not, the future is bright!  More than 80% of respondents believe manufacturing is important to both economic prosperity as well as our standard of living.  They believe that future manufacturing jobs are high-skilled, high-tech, cleaner, safer and more innovative.

However, manufacturing in America is not without issue, which is why regional and national associations exist to support and advocate on behalf of the manufacturing community.  The issues most common to manufacturers include workforce, regulations, and taxes.  Let’s take a deeper dive and see what is being done about this and how you can get involved.

Workforce

The Manufacturing Institute, an affiliate of NAM, has conducted significant research on the skills gap that is widening due to the “silver tsunami” of retirees.  Over the next decade, 3.4 million manufacturing jobs will need to be filled.  Some of the efforts being put forth by the Manufacturing Institute to help fill the gap include:

Local resources are also working to get you the talent you need:

Regulations

On January 30, an executive order declared that for every one new regulation issued, at least two prior regulations must be eliminated.  Theoretically, this is a boon for manufacturers who struggle under the chokehold of too many regulations.  In fact, according to NAM, federal regulations are costing manufacturers almost $2 trillion.

Less publicized is the nuance to achieve this:  any new incremental costs associated with new regulations will be offset by the elimination of existing costs associated with at least two prior regulations. The value of benefits may not be taken into consideration when determining whether costs are net zero.  The ultimate goal is to find ways to achieve regulatory protections in more effective ways – reducing burdens while maintaining essential protections.  How we regulate, not just what we regulate, will likely determine success or failure.

Taxes

There is much speculation on what will actually happen under the Trump administration.  Most believe we will see healthcare reform before we see tax reform.  Nonetheless, what is NAM doing to lobby congress on your behalf?

The top 5 priorities include lowering corporate tax rates, lowering rates on business pass-through income, improving the international tax system, and ensuring the existence and/or improvement of robust R&D incentives and capital cost recovery incentives. These priorities are a result of NAM’s outreach to several hundred of its members. In June 2017, the House released a high level conceptual blueprint which takes many of these items into consideration.  However, we still have a long way to go.

Ways to get involved

  • Become a member of NAM. They have strong relationships with various agency heads, so use them as a conduit to the federal administration (i.e. get a quick call back).
  • Join the local resource groups working to make a difference in the Bay Area:  SF Made, East Bay Manufacturing Group, EBAMP, Silicon Valley Manufacturing Roundtable, and 101 MFG.
  • Sign up for “Friends of Manufacturing,” a group committed to fighting for smart government policies and to giving you a voice.  They will let you know when issues that are critical to your well-being are being debated in Washington and what you can do about it.
  • Register to give a tour on National Manufacturing Day on October 6 and help expose our future generation of leaders to the thriving world of manufacturing.

Want to learn more? Reach out to Audit Partner, Karen Burns at kburns@ssfllp.com or at 925.271.8700.