Tuesday, September 18, 2012

Gene Sperling on Supply Chains and Manufacturing

In his talk today at Carnegie Mellon, Gene Sperling addressed the "Great Recession" and jobs in the United States. Sperling, President Obama's Director of the National Economic Council, discussed domestic manufacturing and directly commented on supply chains and the future. Here are a few brief highlights:

1. Manufacturing jobs are coming back to the United States. As discussed in previous posts on this blog in recent weeks, trends in wages and productivity, combined with a spike in logistical costs (i.e. oil because of Middle Eastern instability) are making America an increasingly attractive place to return to for manufacturers. Sperling shared a comment from one CEO who warned that these trends did not ensure that manufacturers will return on their own, but that good policy initiatives could steer them back.

2. "Value-adding" supply chains are important, and Sperling thinks that many American supply chains will be increasingly important because they are value-adding.

3. As manufacturers rethink location, location, location, many will return to the United States. Sperling believes they will capitalize on positive labor trends (noted above), the proximity and reliability of American supply chains, and the demand of domestic markets.

The second half of Director Sperling's talk underscored the immense importance of supply chains in the global economy and the part they play in economic thinking and discussion at the highest levels of policy.

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