U.S. Reshoring and Innovation Hubs

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It seems that only yesterday the United States biggest problem was lack of exported materials, excess of imported goods, and an influx of outsourced jobs. But today, with pressure from rising manufacturing costs in China, the U.S. manufacturing industry is coming home. This trend is in part due to a program proposed by the White House that centers around the concept of Manufacturing Innovation Institutes.

Also called “innovation hub,” these are public-private centers made up of industry leaders, universities, and the federal government and paid by an initial government 5-year investment matched by corporate or educational partners. It’s goal? Not only to spur the manufacturing industry within U.S. borders but also increase the rate of production for innovative solutions. The Obama administration modeled the program after Germany’s Fraunhofer Society but while the German program already has 67 institutions, the U.S. is starting with 45.

The first institute opened in 2012 in Youngstown, Ohio with a focus in additive manufacturing and 3D printing and there are more to come. While it is a relatively young program, it has a large amount of stakeholders and those in the manufacturing industry are already commending it. Vicki Holt, the CEO of Proto Labs, a “quick-turn” manufacturer of plastic and metal prototype parts, expressed support for the program, “The future of our industry lies in the integration of hardware and advanced software to maximize the efficiency, quality and affordability of manufacturing processes…Leveraging the innovation of the American software community is the key to making American manufacturing competitive once again.

While its not certain whether these programs or other factors like higher costs in China, the North American Energy Boom, or just general confidence are to blame for the rise in manufacturing, they seem to have a positive impact on various industries. The Institute for Supply Management released a monthly business report showing the increase of 15 out of 18 manufacturing industries in the month of June. Not only that, but an index based on five different industry indicators showed that American manufacturing has been steadily increasing for 13 continuous months and these programs are likely to keep that trend moving. What do you think is driving this increase in U.S. manufacturing? Share or let us know your thoughts!