Today is Manufacturing Day, and manufacturers across the nation – like Texas Instruments—will celebrate the great American spirit of making innovative products and introduce a new generation to exciting manufacturing technologies. Now more than ever, we need policymakers and industry work together on four critical actions to maintain manufacturing prowess in America: opening new markets, reforming the tax code, addressing workforce development and supporting research investments.
I am optimistic about the future of manufacturing from my perspective at TI - where we view our manufacturing operations as a strategic advantage and where our devices are revolutionizing how other goods are made. Our semiconductor products power connected factories, enabling smarter manufacturing that quickly identifies production problems, monitors equipment and saves energy. Our chips also support 3D printing - which is changing how items are traditionally manufactured and empowering the individual entrepreneur.
According to the Semiconductor Industry Association, U.S. semiconductor companies capture more than half of worldwide sales—more than the European Union, Japan, Korea, Taiwan, and China combined. Semiconductors are routinely a top-three U.S. export, and a typical chip our company makes in the U.S. is likely to travel around the world - stopping in several countries for assembly, test, packaging and distribution —before it reaches our customer.
Open trade is vital for U.S. manufacturers to be more competitive with integrated global supply chains and to create demand in new markets to drive economic growth here at home. Nearly 90 percent of our company’s sales are from customers outside the United States. The Trans-Pacific Partnership represents a significant market for our company and other U.S. manufacturers. We encourage negotiators to conclude the agreement, and urge Congress to swiftly consider this 21st century agreement.
Many of TI’s most advanced manufacturing facilities are located in the United States, supplying customers around the world. We have invested in additional capacity to provide flexibility and cost efficiencies and to maintain robust manufacturing operations.
Large-scale advanced manufacturing such as ours is extremely capital intensive. Many countries are clamoring for this type of manufacturing, offering generous financial incentives and tax holidays. Congress should make the U.S. tax system more attractive for manufacturers by permanently extending the R&D tax credit and passing tax reform with competitive corporate tax rates and an international market-based system.
As we aim to bolster manufacturing in the U.S., our workforce must be prepared for the available jobs. The National Association of Manufacturers estimates that two million of the nearly three-and-a-half million manufacturing jobs needed in the next decade will be affected by the “skills gap”—an inability to find talent with the required skills. Our company partners with local community colleges near our fabs to develop specialized manufacturing training programs, and maintain strong relationships with universities throughout the country. We engage students early to cultivate tomorrow’s innovators with major investments and volunteer efforts in K-16 STEM education. To complement industry workforce efforts, Congress should reauthorize the AmericaCOMPETES Act to prioritize investments in workforce and research.
Finally, research and development are essential to manufacturing innovation. Our company devotes significant resources internally for R&D, and also supports direct research with universities and collaborative consortia. For example, the National Network of Manufacturing Institutes leverage expertise and funding from industry, academia and across federal government agencies to focus on new areas, such as wide bandgap semiconductors and flexible hybrid electronics. To enable new innovations and manufacturing processes, Congress should support this program, as well as broader research investments, with consistent and predictable appropriations.
We need to stop the hand wringing about a perceived decline in American manufacturing and take action. Our nation’s leading-edge manufacturing is the envy of the world, and new trends like industrial internet and 3D printing represent the next wave of the American manufacturing innovation. For advanced manufacturing to thrive here, we must open new markets, pass tax reform, improve our workforce skills, and invest in research. Together, we can keep America making innovative products.