The need for economic renewal in the United States remains urgent, but a solution may be at hand.
That’s according to a new report by The Brookings Institution. The report names 50 advanced industries—including automaking, aerospace, energy, high-tech services, and health applications—as the country’s best shot at supporting innovative, inclusive, and sustainable growth.
As of 2013, these 50 industries employed 12.3 million U.S. workers, amounting to about 9 percent of total U.S. employment, the report claims, but even with this modest employment base, U.S. advanced industries produce $2.7 trillion in value added annually—17 percent of all U.S. gross domestic product (GDP).
Further, these industries employ 80 percent of the nation’s engineers; perform 90 percent of private-sector R&D; generate approximately 85 percent of all U.S. patents; and account for 60 percent of U.S. exports.
Yet much of the potential of advanced industries remains untapped.
In fact, the U.S. is losing its foothold in innovation performance and capacity. Few U.S. metropolitan areas rank among the world’s most innovative, and of the nation’s most patent-intensive regions, only two—San Diego and the San Jose-San Francisco area—rank in the global top 20 and two more—Boston and Rochester—score in the top 50.
The reasons for this are myriad, but the Brookings report suggests that the skills required for modern advanced industries have outpaced the country’s ability to train needed workers. A narrow educational and training pipeline of potential workers is placing a drag on U.S. competitiveness.
The U.S. education system is failing to adequately prepare children in mathematical and scientific concepts, the report says, with U.S. youth scoring well below their peers in developed countries on STEM related tests.
Unlocking the potential of advanced industries is three fold, says Brookings.
The first step is for private and public sectors to radically rethink their technology development strategies, scaling up their innovation efforts. The U.S. must also recharge its skills pipeline with industry taking the lead in developing the skills it needs. And finally industry and government must work together to strengthen the nation’s local advanced industry ecosystems rather that diluting U.S. manufacturing clout by offshoring and disinvestment.
Listen today to The Brookings Institution’s CEOs forum highlighting the importance of the nation’s advanced industries and the opportunities and challenges they face.