The 10/14 issue of Medical Product Outsourcing noted a new collaboration between academia, local industry, and other stakeholders. This is coming about via the Revitalize American Manufacturing and Innovation Act (RAMI), passed in the House in September. With an election next week, there’s no telling what will happen in the Senate. But this is an interesting development.
According to the “Editor’s Letter”, “RAMI would establish a network of regional institutes across the country, each focused on a unique technology, material or process relevant to advanced manufacturing—including medical technology. … It would create a network of regional manufacturing institutes across the country to support domestic production, drive innovation and expand workforce development in growing industries”.
If this innovative approach actually does generate business momentum, manufacturers should be pleased, depending, of course, on the cost of this success. After all, market success ultimately depends upon customers buying whatever innovations materialize, with or without subsidies, and as anyone in marketing knows, it is very difficult to predict what future customers will do.
We suspect you, like Proficient Sourcing, would be thrilled if such an initiative would generate new business opportunities. But such a proposition does raise many questions.
For example, one of the objectives of this initiative is to “train a top-tier advanced manufacturing workforce”. What does this mean, and just who is going to train people for what?
If you are a non-believer, you might be interested in National Suicide, a 2009 book by Martin Gross. Chapter J of this book reports that “Washington supports 163 different job-training programs in some 14 different federal agencies, all uncoordinated and generally unevaluated….” If any of that is true, one wonders just what will change with the RAMI proposal.
After all, Proficient Sourcing is vitally interested in more business activity in manufacturing. We look at your requirements, consult with our extensive job shop network, and present you with supplier candidates for what you need. You need do nothing with those recommendations; that is entirely up to you. We believe our recommendations should save you time searching for candidates and perhaps money if you choose our candidates.
We have also heard a great deal of commentary about the economy. Some report positives, others report negatives. Our view is that little in our general manufacturing arena has changed over the past 5 years or so, and that most of our network shops report slow, perhaps even steady growth. But the operative word is “SLOW”. What is your experience? If you desire a professional opinion, there is an excellent presentation next week—please see the “Economic forecast for Manufacturers” article below.
We see an amalgam of overall manufacturing outside of primary metals, mining, and certain other categories. Some companies are up, others are down, but if things are growing, it is very slow. For many years we have asked about what things would stimulate business, and we have noted many responses.
Big items, such as tax policy, access to capital, and regulations are obvious influencers. But there are numerous smaller items we are aware of that might have beneficial business results. Recently we attended a town hall with a prominent national leader, and among the ideas forwarded were these two:
- Permanent hiring and a growing permanent work force would seem to be in almost everyone’s best interest. Why, then, do all governments seem to favor income taxing the first wage dollars when a new employee starts work. While some benefits do not start for a time, adding to the cost of a new employee would appear to make creating jobs more difficult and expensive than necessary. Since many of these taxes (Federal Unemployment, for example) apply only to the first few thousand dollars, why not defer these taxes for a time to encourage bringing new people aboard?
- A company can spend on personnel and expense 100% immediately. Alternatively, spending on capital improvements entails depreciation accounting. As we understand it, depreciation is a government creation to accelerate tax revenue. A company spends money on equipment, but can only claim a fraction of that as an annual expense to offset income taxes. The elimination of depreciation might be a way to encourage equipment manufacturing.
Do us the favor of an opinion of this via our blog. And feel free to give us your ideas as well.