Don’t forget about manufacturing

It’s fitting that New Balance broke ground on a new $500 million Boston campus just days before National Manufacturing Day on Oct. 4. The company is an American manufacturing success story.

Using state-of-the-art manufacturing processes, it employs 1,300 American workers at five facilities in New England and purchases material from domestic suppliers responsible for another 7,000 jobs.

But New Balance is not an anomaly in Massachusetts, where, contrary to popular perception, manufacturing remains an important part of the economy. Manufacturing accounts for 11 percent of the state’s economic output and 7.9 percent of its employment. There are 7,140 manufacturing facilities in Massachusetts. Manufacturing’s value goes beyond quantity. The average worker earns more than $77,000. Nine out of 10 have medical benefits. And they have the longest job tenure in the private sector.

There is no denying, however, that the manufacturing sector is under extreme pressure. One pressure point is low-ball competition from foreign competitors using stolen or pirated software. This a growing problem in a sector that relies increasingly on sophisticated manufacturing processes. New Balance, for example, has developed a proprietary process for utilizing a runner’s individual biomechanical data to create hyper-customized spike plates designed to improve performance. American manufacturers will never match emerging-market competitors on wages. Our success is based on doing it smarter.

Between 2001 and 2010, Massachusetts lost 36.9 percent of its manufacturing jobs. That loss exceeded even the national rate of 30 percent. In an indication of the significance of software piracy, a reduction of just 10 percent in piracy over four years would add $1 billion and 1,000 jobs to the state’s economy.

The state’s political leaders have begun to focus on Massachusetts manufacturing and the threats to it. A year ago, Attorney General Martha Coakley brought an action against Thai companies using stolen software to undercut the Massachusetts seafood industry, an important and historical sector in the state’s economy. That case led to similar actions by attorney generals in California, Tennessee and Washington State. The Massachusetts delegation has leaned on the Federal Trade Commission to crack down at the national level.

But more needs to be done. The House’s recent vote to repeal the “tech tax” shows what can be done when policymakers identify an immediate threat to an important sector of the state’s economy. We urge the candidates running for mayor of Boston and those running for state office next year to make manufacturing a major campaign issue and a major priority for local and state government. Manufacturing may not have the political sex appeal of technology, but the two are symbiotic and the former is as significant to our economy as the latter.

By Stella Karavas and Rob McKenna

Stella Karavas is the executive director of Massachusetts Competes and the CEO of Voltree Power in Canton. Rob McKenna is the president of the National Alliance for Jobs and Innovation and a former attorney general of Washington State.

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Rob McKenna
Rob served two terms as Washington’s Attorney General, from 2005 to 2013. He successfully argued three cases before the U.S. Supreme Court and negotiated three of the largest consumer financial protection settlements in national history, all involving mortgage lending and servicing. He is a recognized leader in the development of consumer protections on the internet, in data protection and privacy regulation.