U.S. Economy

The U.S. manufacturing sector is currently experiencing a transformative shift. This shift spans a trajectory from industrialization, to de-industrialization, and now to a potential reindustrialization that could reshape the nation's economic and industrial landscape.

Growing up in Manchester, New Hampshire, I witnessed the decline of the textile mills that once were the heart of the region. These mills, at one time the largest in the world for cotton production, employed thousands of workers but eventually shut down as industries moved south, labor strife intensified, and the global economy changed. By the 1970s, the mills were boarded up, and even my school shoes were made overseas in China. Fast forward 50 years, however, and those same mills are home to some of the most advanced manufacturing in regenerative medicine—focused on cells, tissues, and organs. These developments are paving the way for addressing major health issues, such as heart disease, cancer, and wound healing, opening up new frontiers for innovation in healthcare.

This story of transformation is emblematic of the broader changes currently taking place across U.S. manufacturing. At the heart of this transformation lies a convergence of several powerful forces. First, the global supply chains have been severely disrupted in recent years, highlighting vulnerabilities in critical industries. The pandemic underscored just how dependent we had become on global supply chains, which caused severe shortages of essential products such as PPE and semiconductors, impacting everything from healthcare to the automotive sector. In fact, the U.S. economy became highly vulnerable when 90% of advanced semiconductors were produced in a single region, leaving us at risk of major disruptions.

Second, the world faces an ongoing climate crisis that is already leading to billions in economic losses. In 2023, the U.S. experienced 20 billion-dollar weather events, underscoring the urgent need for resilient, sustainable infrastructure and energy systems. This makes clear that we must rebuild, not just with resilience but with decarbonization in mind.

Third, global geopolitical tensions, especially the war in Ukraine and the growing competition with China, have brought our defense industrial base under significant strain. These tensions emphasize the importance of maintaining a strong and innovative defense sector, with advanced technologies being crucial for both national security and economic growth.

The issue of income inequality also plays a key role. For many Americans, economic insecurity leads to increased populism and a breakdown of trust in democratic institutions. While productivity has risen, wages for the majority of workers have stagnated since the 1980s, exacerbating social divisions. Addressing this inequality is vital for the future of our democracy and economy.

These global forces and domestic challenges have spurred a policy response aimed at revitalizing American manufacturing. For decades, the U.S. has adhered to a free-market, efficiency-driven model, but as recent events have shown, the focus on efficiency without consideration for resilience has proven detrimental. Industrial strategy—the government's active role in fostering certain sectors—has become necessary to address the economic challenges facing the country. Through bipartisan efforts, the government is now channeling investment into critical industries such as semiconductors, defense technologies, renewable energy, and physical infrastructure.

The promise of this strategy is clear. By investing in advanced manufacturing technologies like robotics, AI, and 3D printing, the U.S. can regain its competitive edge. These technologies provide an opportunity to not only improve manufacturing productivity but also to augment the workforce, improving safety and quality while driving economic growth.

In particular, biomanufacturing represents a significant area for growth. With an estimated trillion-dollar market in the next decade, biomanufacturing has the potential to revolutionize industries such as healthcare. The U.S. is already a leader in biotech innovation, but to remain competitive, we must focus on developing our biomanufacturing capabilities.

Another important aspect of this transformation is the creation of high-quality jobs. While the U.S. has a large number of manufacturing jobs, many of these are not high-paying or sustainable. By investing in technology and worker training, the country can create jobs that offer fair wages and opportunities for advancement. The key to addressing this challenge is not just increasing the quantity of jobs but focusing on the quality of those jobs.

At the heart of this transformation is the need to invest in small and medium-sized manufacturing firms. These firms represent the backbone of the U.S. manufacturing ecosystem, yet they often lack the resources to adopt new technologies. By providing them with access to cutting-edge digital capabilities and helping them scale, we can ensure that they are well-positioned for the future.

To succeed, we must focus on a few key areas: investing in digital capabilities for small and medium-sized businesses, scaling emerging technologies, and creating an ecosystem where public and private sectors work together to drive innovation. Additionally, we must prioritize workforce training to ensure that both current and future workers are equipped for the new economy. By focusing on these areas, we can achieve a manufacturing renaissance that is resilient, sustainable, and innovative.

The stakes are high. A more resilient manufacturing sector is essential for U.S. national security, economic stability, and the future of the workforce. This transformation is not a luxury—it is an urgent necessity. By embracing this agenda, we can ensure that the U.S. remains a global leader in advanced manufacturing, paving the way for a prosperous future.