Young Op-Ed: Our Manufacturing Competitiveness Hinges on Action
Jay Timmons and U.S. Sen. Todd Young
Manufacturers in Indiana and across the country play a leading role in creating jobs that benefit all Americans. And with a manufacturing workforce that is now 13 million strong, manufacturers in America are ready to accomplish even more. But to continue this momentum, our nation must take action to strengthen our competitiveness and level the playing field with our global competitors.
Manufacturing is an integral part of Indiana’s communities and its economy, employing more than 500,000 Hoosiers. Hoosier manufacturers make every product you can imagine, whether it’s advanced machinery, automotive parts, food and beverages or other household goods. The industry is also at the forefront of protecting health and wellness thanks to a flourishing life sciences sector in Indiana, which we saw firsthand during a recent site visit at INCOG BioPharma Services in Fishers.
When policymakers support this innovation and job creation, it supercharges manufacturers’ impact. The bipartisan CHIPS and Science Act is expected to help create hundreds of thousands of jobs across the country. The semiconductor shortage made prices higher for all Hoosiers and caused supply chain challenges across all industries, and this law is a step toward reversing these disruptions. It helps manufacturers get the inputs without depending on foreign suppliers, which is also a matter of national security. Protecting our supply of semiconductors means we won’t be dependent on China or other geopolitical rivals. This new law is a win for Indiana and manufacturers across the country.
The CHIPS and Science Act is an important step for America’s economic competitiveness, but policymakers also need to be vigilant against policies that reverse this progress.
Tax policy, for example, has an outsized impact on manufacturing growth and innovation. Unfortunately, businesses lost the ability last year to deduct their research and development expenses in the same year they were incurred. For companies that invest heavily in innovation, this makes it significantly more costly to conduct R&D—particularly in the life sciences sector, where innovation is the name of the game. That jeopardizes potential lifesaving cures and high-paying jobs in Indiana. It makes no sense for us to essentially penalize companies for investing in the future—especially when China provides a 200% super deduction for R&D.
We also must pursue a better strategy to trade by forging agreements containing market-access provisions. Stronger trade ties with the rest of the world will be one of our best defenses against threats to our national and economic security. Manufacturers in Indiana need to be able to reach markets outside our borders—this helps support economic growth and job creation, especially in export-focused manufacturing sectors, which tend to pay more than others. And at a time when China is focusing on trade deals to strengthen its own manufacturing sector while suppressing competition, we need to fight back by opening markets and securing agreements in Asia, Europe, Africa and South America.
New regulations, no matter how well-intentioned, could also threaten jobs and paychecks. To avoid over-regulation, federal bureaucrats need to steer clear of hasty, top-down restrictions and instead pursue efforts to make it easier to get new projects off the ground. Manufacturers are already leading in protecting the environment and using energy, water and other resources more sustainably for the future. But overreaching regulations could hinder the industry’s future capacity to create more jobs. For the United States to continue its growth, we need a regulatory approach that encourages manufacturers to build facilities, reinvest in our communities, and develop the technologies that will provide adaptability to future challenges.
Washington has a clear road map to strengthen manufacturing competitiveness—more pro-growth, pro-innovation policy. The state of the manufacturing industry is strong here in the Crossroads of America, and we know what we have to do to keep it that way.