yesRick LazioNone
×

Get access to Protocol

I’ve already subscribed

Will be used in accordance with our Privacy Policy

The key to American economic recovery? Automation.

A manufacturing sector revitalized by technology could help President Biden secure long-term economic growth, argue Rick Lazio and Myron Moser.

The key to American economic recovery? Automation.

Technology could play a vital role in bolstering the economy.

Photo: Hans-Peter Merten/Getty Images

The economic impact of COVID-19 will be with us for years to come.

The U.S. economy is working its way back, albeit slowly, with the economy recovering only half of the more than 22 million jobs lost in March and April due to the pandemic and operating at 82 percent capacity compared to the first quarter of 2020.

Despite these economic headwinds, there is light at the end of the tunnel. Vaccinations and the potential for additional relief from Capitol Hill make the prospect of stronger economic growth in the near future compelling.

However, sustainable economic revival depends on more than just government aid in the short term. In order for President Joe Biden to usher in an era of long-term economic growth, he will need to lean on one of America's historically core industries: manufacturing.

A revitalized manufacturing sector will require a myriad of changes, but the payoff would be a boon for the U.S. economy that could drive us out of economic doldrums, take market share away from an adversarial China and provide increased economic and national security.

The most important and pressing trend is undoubtedly the digital revolution of the industry. Cloud and automation technologies, alongside AI and machine-learning tools, will increasingly drive efficiencies in the industry that will allow the U.S. to compete and win on the world stage.

Countries such as China, Japan and South Korea have all embraced automation. Their ability to adapt to market demand, particularly during this pandemic, proves their infrastructure's effectiveness. America's failure to keep pace with those major overseas players is a problem that demands immediate action.

Specifically, Biden should name a Cabinet-level working group to develop a set of broad initiatives to encourage the integration of automation technologies in the manufacturing industry.

This type of initiative also would be a positive for job growth in the automation and tech industry, which develops the equipment and programs necessary for the manufacturing industry to thrive. It's a win-win for any politician willing to throw their political capital behind the effort to promote the integration of the two industries. The bolstering of American manufacturing has enjoyed bipartisan support for years.

The potential benefits are huge. Robotic process automation has proven to show ROI for companies between 30% and 200% in the first year, all while bringing new, safer and better-paying jobs to the factory floor. A study from the London School of Economics found that automation increased annual productivity of companies by 0.36 percentage points — more than the 0.35 percentage points added by the British industrial revolution.

Biden should seize on these facts and help lead a digital revolution of the manufacturing sector. To do this, the president must set aside the reflexive urge to withdraw from any of former President Trump's industrial and trade policy, and think about what is best for the industry and economy as a whole.

We've written before on the manufacturing industry's hesitation when it comes to a Biden presidency. A full pull-back from targeted tariffs, effective tax reforms and a return to regulatory overreach — all of which collectively drew U.S. firms back from overseas where cheap labor remains tempting bait — would do more harm than good.

These campaign promises, if put into action, would run contrary to his stated goal to get the American employers hiring and growing again. It would hamstring businesses that are trying desperately to hold onto jobs, and would not just impede innovation, but do long-term damage to the sector.

Instead, Biden, with his extensive Washington experience and legislative relationships, should seize the moment to work with members of both parties. He should make clear that his administration is behind the notion that a technological revolution in the American manufacturing sector will be vital to our country's economic wellbeing in the decades to come.

How? By maintaining the tough but fair trade policies that have provided room for American manufacturers to ramp up; through the promotion of incentives for employers to work with technical schools and other training institutions to increase the supply of technical workers who can support automation; and by recognizing that tax policy has to promote innovation generally and automation specifically, which includes leaving the capital earned by manufacturers with them so that they can afford to invest and grow their technological capabilities. Higher taxes on this sector will simply thwart the traction that we have begun to witness.

Those Democrats in Senate whose home states rely on manufacturing — including Sherrod Brown (Ohio), Dick Durbin and Tammy Duckworth (Illinois), Gary Peters and Debbie Stabenow (Michigan), and Bob Casey (Pennsylvania) — should lead the charge on this effort as members of the Congressional majority.

Successful manufacturing policy requires policymakers to listen first to those who are doing the training, investing, designing and operating. Here, a healthy modesty by the political class is in order. President Biden should not play a game of picking winners or losers. Instead, he should reach out to critical members of the manufacturing and technology sectors to see what they would need to bring American jobs back home.

It's not lost on us that firms that want to be a part of this digital revolution will need to have capital on hand. After consulting with industry experts, Biden and his allies in Congress should work to provide financial incentives, such as tax deductions for embracing industry 4.0 tools and automation, or amplified credits such as the research and development tax credit.

What's also apparent is that a technological revolution in the manufacturing sector is only as good as the amount of readily-available skilled labor. A revamped STEM education system in America will also be necessary, and will include increased investment in technical colleges, as well as strengthening recruitment and awareness at the high school level. This effort should also include increasing access to Pell Grants and opening up more opportunities for minority and underserved individuals.

Our final plea? Look beyond the politically-safe options of tariff drawbacks and tax hikes, and toward technologies that will carry our economy into the future. If we don't act quickly, the U.S. runs the risk of falling further behind China and others, whose hare-paced response during the pandemic should put all Americans on notice.

The tech and manufacturing sectors in the U.S. are a match made in heaven: one that could prove Biden's ability as a leader who can effectively reach across the aisle to restore America's manufacturing leadership.

Indeed, a matchmaker that could win the hearts of all American business owners.

People

Making the economy work for Black entrepreneurs

Funding for Black-owned startups needs to grow. That's just the start.

"There is no quick fix to close the racial wealth and opportunity gaps, but there are many ways companies can help," said Mastercard's Michael Froman.

Photo: DigitalVision/Getty Images

Michael Froman is the vice chairman and president of Strategic Growth for Mastercard.

When Tanya Van Court's daughter shared her 9th birthday wish list — a bike and an investment account — Tanya had a moment of inspiration. She wondered whether helping more kids get excited about saving for goals and learning simple financial principles could help them build a pathway to financial security. With a goal of reaching every kid in America, she founded Goalsetter, a savings and financial literacy app for kids. Last month, Tanya brought in backers including NBA stars Kevin Durant and Chris Paul, raising $3.9 million in seed funding.

Keep Reading Show less
Michael Froman
Michael Froman serves as vice chairman and president, Strategic Growth for Mastercard. He and his team drive inclusive growth efforts and partner across public and private sectors to address major societal and economic issues. From 2013 to 2017, Mike served as the U.S. trade representative, President Barack Obama’s principal adviser and negotiator on international trade and investment issues. He is a distinguished fellow of the Council on Foreign Relations and a member of the board of directors of The Walt Disney Company.
Sponsored Content

Building better relationships in the age of all-remote work

How Stripe, Xero and ModSquad work with external partners and customers in Slack channels to build stronger, lasting relationships.

Image: Original by Damian Zaleski

Every business leader knows you can learn the most about your customers and partners by meeting them face-to-face. But in the wake of Covid-19, the kinds of conversations that were taking place over coffee, meals and in company halls are now relegated to video conferences—which can be less effective for nurturing relationships—and email.

Email inboxes, with hard-to-search threads and siloed messages, not only slow down communication but are also an easy target for scammers. Earlier this year, Google reported more than 18 million daily malware and phishing emails related to Covid-19 scams in just one week and more than 240 million daily spam messages.

Keep Reading Show less
Politics

The PRO Act hurts American competitiveness

"The U.S. needs to focus on helping, not hurting, small businesses," says CTA president and CEO Gary Shapiro.

Nancy Pelosi is among the PRO Act's supporters in Congress.

Photo: Amanda Andrade-Rhoades/Getty Images

Gary Shapiro is president and CEO of the Consumer Technology Association.

Should employers be required to give up personal and private information about their employees to union organizers? If 216 Congressional Democrats and two Republicans get their way, employers would have to give a name, phone number and home address to any union official claiming to want to organize their facility. As if anyone in America wants to be visited in their home by a union official financially incentivized to make them sign a unionization petition.

Keep Reading Show less
Gary Shapiro
Gary Shapiro is president and CEO of the Consumer Technology Association, the U.S. trade association representing more than 2,000 consumer technology companies. He's also a New York Times bestselling author.
Transforming 2021

Blockchain, QR codes and your phone: the race to build vaccine passports

Digital verification systems could give people the freedom to work and travel. Here's how they could actually happen.

One day, you might not need to carry that physical passport around, either.

Photo: CommonPass

There will come a time, hopefully in the near future, when you'll feel comfortable getting on a plane again. You might even stop at the lounge at the airport, head to the regional office when you land and maybe even see a concert that evening. This seemingly distant reality will depend upon vaccine rollouts continuing on schedule, an open-sourced digital verification system and, amazingly, the blockchain.

Several countries around the world have begun to prepare for what comes after vaccinations. Swaths of the population will be vaccinated before others, but that hasn't stopped industries decimated by the pandemic from pioneering ways to get some people back to work and play. One of the most promising efforts is the idea of a "vaccine passport," which would allow individuals to show proof that they've been vaccinated against COVID-19 in a way that could be verified by businesses to allow them to travel, work or relax in public without a great fear of spreading the virus.

Keep Reading Show less
Mike Murphy

Mike Murphy ( @mcwm) is the director of special projects at Protocol, focusing on the industries being rapidly upended by technology and the companies disrupting incumbents. Previously, Mike was the technology editor at Quartz, where he frequently wrote on robotics, artificial intelligence, and consumer electronics.

Tech companies promised to do better on diversity. Here's how they can.

Holler CEO Travis Montaque calls for an agile approach to make systemic, not surgical, changes, both internally and externally.

"When you're looking to solve a big, complex problem, you can't expect to achieve it in one fell swoop," says Holler CEO Travis Montaque.

Image: Spencer Platt/Getty Images

Travis Montaque is the founder and CEO of Holler, a messaging technology company.

In 2020, protests against police brutality and racism erupted across the country. Issues of racial injustice were brought to the forefront of our national consciousness. In response, business leaders from just about every industry came out with statements acknowledging the work that needs to be done, and committing to making a change.

Keep Reading Show less
Travis Montaque

As founder and CEO of Holler, Travis Montaque is building the ultimate content engine for conversations, starting with animated, expressive and branded content for messaging environments. He's opened up a massive new opportunity for brands to engage with audiences via messaging, the most popular digital space to connect, earning him a spot in Forbes 30 Under 30 and Entrepreneur Magazine's Most Daring Entrepreneurs. Most recently, he led Holler to a spot on Fast Company's 2020 Most Innovative Companies List in Social Media. Travis is also an inaugural member of the University of Miami Marketing Advisory Board.

Latest Stories