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How Your Business Can Profit From the New Industrial Revolution

American manufacturing is poised to enter a new era of explosive growth

rosalind-brewerAmerican manufacturing is poised to enter a new era of explosive growth – and your business can profit from it.

That unequivocal message was delivered loud and clear at Walmart’s US Manufacturing Summit, a two-day confab in Orlando, Florida where the world’s largest retailer assembled nearly 1,500 suppliers, retailers and government leaders to drive investment in this sector. The objective of this massive industrial retooling effort: Creation of employment and
business opportunities to advance the nation’s middle class.

Bottom line: It is imperative that African American companies, large and small, fully participate in this new industrial revolution.

In opening remarks to Summit attendees, Walmart US CEO Bill Simon spelled out the overall mission: “We’re creating a network of support. Together, we can help spark a revitalization of US-based manufacturing, using new technology and new innovations to make production in the United States affordable and feasible.”

“America can’t be a service economy; we have to make things. I can’t think of a successful example in history of an economy built solely on services. The “multiplier effect” tells us that each new manufacturing job will lead to about three more jobs around it, creating even more opportunity in our communities,” he added. (Simon, however, made clear the
company was not advocating turning “inward or move business away from other
places.”)

Rosalind Brewer, CEO of Sam’s Club, a Walmart division, further stressed the impact of the sector’s revival on entrepreneurs nationwide. “I have the privilege of working with – and supporting – small businesses in nearly every state in the nation,” Brewer, one of BLACK ENTERPRISE’s Most Powerful Executives in Corporate America and 2012 BE Corporate Executive of the Year, maintains. “For small businesses to grow and prosper, US manufacturing must as well.”

As part of its Made in USA initiative, Walmart re-affirmed its commitment to keep factories humming with a pledge to spend an additional $50 billion with US companies over the next decade and willingness to sign long-term purchase agreements. Simon expects to build upon this Made in America program through a series of alliances. For instance, one such partner, General Electric announced plans to invest $30 million and add more than 50 jobs as part of GE Lighting’s production of energy-efficient light bulbs. And suppliers who attended the conference made announcements to collectively invest about $70 million in factory growth and create more than 1,000 domestic jobs. Moreover, the National Retail Federation, the world’s largest trade association for that sector, served as co-host for the event.

It’s perfect timing for a renaissance in US manufacturing according to the all-star line-up of speakers appearing at the Summit kick-off via live webcast. The group included U.S. Commerce Secretary Penny Pritzker, Walmart Stores CEO Mike Duke, General Electric CEO Jeff Immelt, CNBC’s Maria Bartiromo and eight governors.

Pritziker told Summit participants that “we are entering a new era of manufacturing” as a result of the following factors: Low-cost energy; advanced technology; stronger financial and housing sectors; a more flexible, productive workforce – worker output per hour has increased by 2.2% over the past year – and China’s eroding competitive advantage due to rising production costs, labor unrest and higher wages. In fact, a 2012 Boston
Consulting Group report states that as much as 30% of our nation’s imports to
China could be produced domestically by 2020.

Walmart’s Duke says another driver is the trend of localized manufacturing – “creating products near consumers.” And with more competitive American companies in the global economy, GE’s Immelt asserts, “the days of labor arbitrage are over.” Both maintained the greater need for a highly–skilled, knowledge-based workforce.

“One area across the nation that we need to work on is STEM [science, technology, engineering and math],” says Duke. “We need those who can design new factories and processes. We need scientists and engineers to help us develop our businesses here in the United States.”

In a session on the role of state government that was moderated by Sam’s Club’s Brewer, Governors Mike Beebe (Arkansas), Phil Bryant (Mississippi) and Susana Martinez (New Mexico) agreed that government must support business by providing, among other initiatives, tax incentives to promote growth and skills-development programs in collaboration with colleges and universities to improve the quality of the workforce.

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