Innovation and Technology

Washington, D.C. – The National Association of Manufacturers today announced that Ketchie Inc. President and Owner Courtney Silver will serve as chair of the NAM’s Small and Medium Manufacturers Group and Click Bond President and CEO Karl Hutter will be vice chair. Silver and Hutter will work under the continued board leadership of NAM Board Chair and Dow Inc. Chairman and CEO Jim Fitterling and NAM Board Vice Chair and Johnson & Johnson Executive Vice President and Chief Technical Operations and Risk Officer Kathy Wengel.

“Small and medium-sized manufacturers are at the heart of our economy and represent 90% of the NAM’s membership. Our country’s success is tied directly to their success, and with Courtney and Karl as leading manufacturing voices, we are well-positioned for 2023,” said NAM President and CEO Jay Timmons. “No matter what challenges we face, our association and industry remain steadfastly committed to policies that uphold the values that have made America exceptional and keep manufacturing strong: free enterprise, competitiveness, individual liberty and equal opportunity.”

“It is a privilege to serve our industry as chair of the SMM Group at the NAM. With so many critical policy issues facing members this year, we will continue to lead the charge in Washington and across the country,” said Silver. “We’re all dealing with pressures from regulatory overreach, tax code uncertainty, the workforce crisis and more. I look forward to working with the team at the NAM to advance policies that support innovation and growth and enhance our competitiveness—and to collaborating with other small and medium-sized manufacturers, including family-owned businesses like mine, to fix these make-or-break policies central to our survival.”

“I am honored to be chosen to lead the SMM Group at the NAM as vice chair,” said Hutter. “From educating elected leaders on the policies needed to empower the nearly 13 million people employed in manufacturing, to helping companies tap into the NAM’s wealth of operational resources, I look forward to working closely alongside the NAM’s leadership to support small and medium-sized manufacturers in growing their companies and our economy.”

The NAM Board of Directors guides the association’s leadership in policy advocacy, legal action, operational excellence, workforce development and news and insights. More than 200 manufacturing leaders serve on the NAM Board, helping the industry advance an agenda that promotes growth and prosperity for all Americans.

The new board leadership was elected at the September meeting of the NAM Board of Directors.

Silver previously served as vice chair of the NAM’s SMM Group. As president and owner of Ketchie, she leads a woman-owned, third-generation North Carolina manufacturer. She has worked at Ketchie for more than 14 years. She is a past recipient of the Manufacturing Institute’s STEP Ahead Award (now the Women MAKE Award), which recognizes manufacturing women who exemplify leadership within their companies as well as their communities.

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The National Association of Manufacturers is the largest manufacturing association in the United States, representing small and large manufacturers in every industrial sector and in all 50 states. Manufacturing employs more than 12.9 million men and women, contributes $2.77 trillion to the U.S. economy annually and accounts for 55% of private-sector research and development. The NAM is the powerful voice of the manufacturing community and the leading advocate for a policy agenda that helps manufacturers compete in the global economy and create jobs across the United States. For more information about the NAM or to follow us on Twitter and Facebook, please visit www.nam.org.

It’s time to think way outside the proverbial box, according to the Manufacturing Leadership Council, the NAM’s digital transformation arm. In fact, as we get closer to 2030, manufacturers are creating entirely new boxes—including new digital business models, products and services, revenue streams, ways to serve customers and opportunities to increase competitiveness.

Collaborative innovation: By 2030, metaverse technologies will provide rich virtual environments for the collaborative development of new ideas. These shared virtual spaces will enable contributors from multiple remote locations to collaborate in real time.

• These collaborations may include manufacturers, partners, academic institutions and research institutes.
• New concepts can be tested in a virtual world before moving to physical prototyping or production.

Outcome-based products and services: As digital platforms mature and products become increasingly smart and connected, the decade ahead may see a boom in more outcome-based services. This is where the customer doesn’t buy a physical product, but instead signs up to pay for the guaranteed outcomes that product or system delivers.

• This shift will require manufacturers to establish new infrastructure rich in predictive analytics, remote communications and consumption monitoring.
• It also requires a mindset change for traditional manufacturing, from a focus on units and costs to product lifecycles, performance levels and usage.

Blockchain networks: By 2030, blockchain could be leveraged for most world trade, helping to provide the secure traceability and provenance needed to prevent physical product counterfeiting, grey markets in medicines and even the adulteration of the global food supply chain.

• A blockchain is an electronically distributed ledger accessible to multiple users. Blockchains record, process and verify every transaction, making them safe, trusted, permanent and transparent.

• Blockchain technologies promise to be a viable solution to manufacturers’ need to automate, secure and accelerate the processing of key transactions across industrial ecosystems.

E-manufacturing marketplaces: Digitally empowered production-line adaptability, such as the kind that emerged during the pandemic, will provide a foundation for companies to offer spare production capacity to other companies in different sectors.

• This maximizes the return on a company’s production-line investments and can generate new revenue streams for the future.
• Combined with e-commerce, e-manufacturing will enable designers, engineers and/or smaller companies to more easily connect with a large pool of qualified producers to deliver and scale a final product.

Manufacturing in 2030 Project: New Boxes is just one of the industry trends and themes identified by the Manufacturing in 2030 Project, a future-focused initiative of the MLC. For more details on megatrends, industry trends and key themes for Manufacturing in 2030, download the MLC’s new white paper “The Next Phase of Digital Evolution.”

Manufacturers are pursuing sustainability like never before.

That’s according to recent polling conducted by the Manufacturing Leadership Council, the NAM’s digital transformation division. The annual Sustainability and the Circular Economy research survey seeks to determine the progress made in sustainable manufacturing.

Competitiveness: There has been a surge in the number of manufacturing executives who view sustainability as critical to the future of their businesses.

• 58% of respondents in 2022 believe sustainability is essential to future competitiveness compared to 38% in 2021.
• 68% of executives say they are implementing extensive, corporate-wide sustainability strategies. That’s up from just 39% in 2019.

What’s driving change: The motivations go beyond regulatory compliance and cost savings.

• 78% say sustainability is about better alignment with corporate values.
• 68% believe in creating a cleaner, healthier environment.
• 66% seek to improve company reputation with customers and investors.

Top corporate goals: More than half of survey respondents reported having specific sustainability goals and metrics across almost all key functions in the company.

• Goals were most apparent in manufacturing and production (79%), supply chain (69%) and product design and development (67%).
• Additional goals were cited in transportation and logistics (56%) and partner compliance (51%).

Energy efficiency is No. 1: The primary sustainability focus of manufacturers, according to survey results, is energy efficiency and reduction, combined with the transition to renewable energy sources. These efforts are linked intrinsically to meeting net-zero emissions goals.

• 45% of respondents report having announced formal net-zero goals.
• 30% aim to hit net zero by 2030.

Digital tech, employee training play a role: Also on the rise is the number of companies that recognize the importance of digital solutions in their sustainability efforts.

• These tools are being used to manage and monitor materials and energy consumption, optimize operations to improve efficiency and report sustainability progress.
• Respondents also say meeting sustainability targets must include engaging employees through education and training, as well as greening their supply chain.

The last word: An overwhelming 90% of all respondents agree that manufacturing has a special responsibility to society to become more sustainable and accelerate the transition to a future circular industrial economy.

Interested in putting some renewable energy solutions into action, including solar power, battery storage and LED lighting? Programs from utility companies and other entities enable efficiency upgrades with little or no upfront capital. Connect with NAM Energy to explore your options!

Washington, D.C. – Following today’s announcement by the World Trade Organization’s General Council that member states have agreed to delay a final decision on an expanded intellectual property waiver for COVID-19 products, National Association of Manufacturers President and CEO Jay Timmons released the following statement:

“The WTO’s decision to delay the expanded intellectual property waiver is a welcome step toward protecting American innovation and technology leadership. This is vital not only for future pandemic responses, but also for the sector’s ability to produce new and advanced treatments or fund critical research and development.

“Manufacturers in the U.S. are leading our post-pandemic recovery and investing heavily in the development of cures and therapeutics. An expanded WTO waiver would force manufacturers in America to give away rights unfairly to international competitors and economic rivals like China, disincentivize companies from continuing the cutting-edge research underway, put jobs at risk and harm the sector’s global competitiveness.

“Manufacturers will continue to work with partners around the world to tackle current and emerging health challenges, while protecting the IP rights of those many companies which have been so essential to an effective pandemic response.”

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The National Association of Manufacturers is the largest manufacturing association in the United States, representing small and large manufacturers in every industrial sector and in all 50 states. Manufacturing employs more than 12.9 million men and women, contributes $2.77 trillion to the U.S. economy annually and accounts for 55% of private-sector research and development. The NAM is the powerful voice of the manufacturing community and the leading advocate for a policy agenda that helps manufacturers compete in the global economy and create jobs across the United States. For more information about the NAM or to follow us on Twitter and Facebook, please visit www.nam.org

What does the U.S. military do when an expensive asset like a plane or a weapons system begins to break down?

Often, it turns to companies like Parts Life, Inc.—an innovative manufacturer that can reverse-engineer obsolete parts and help find solutions for hard-to-replicate products. But after a tax law change went into effect in 2022, the New Jersey–based manufacturer is facing increased costs for research and development, creating a barrier to the kind of innovation that is the focus of its business.

The change: Until the beginning of 2022, businesses could deduct 100% of their R&D expenses in the same year they incurred the expenses. Starting this year, however, a tax law change requires businesses to spread their deductions out over a period of five years, making it more expensive to invest in growth and innovation.

A focus on innovation: For Parts Life, coming up with new ideas is an essential, daily activity.

• “Parts Life is built around being a solutions provider,” said Parts Life President and CEO Sam Thevanayagam. “We are providing solutions for very expensive and mission-critical assets that are extremely strategic for the defense of the nation, but are also older—so their parts are not necessarily being supported.”
• “That’s where we come in to do reverse engineering. So, we’re looking at an old problem, but using innovation to solve it going forward.”

A benefit for savings: By helping the military extend the life of its assets, Parts Life also helps taxpayers.

• “We’re taking care of the warfighter and the taxpayer,” as Thevanayagam puts it.

A look ahead: As global conflicts shift, the U.S. military needs suppliers like Parts Life to help it develop solutions for future challenges, too.

• “Right now, our military is coming out of conflicts in Afghanistan and Iraq, but future conflicts may involve different terrain with different problem sets,” said Thevanayagam.
• “The work that we are doing today is helping them figure out how to approach those challenges. We’re having them tell us where they need to be, and then we’re helping them with the innovation they need to be successful.”

A tough choice: With the change in tax law, companies like Parts Life will be forced to make difficult decisions about how to spend scarcer resources, harming their ability to do critical, forward-looking work.

• “Currently, we’re leaning forward in resources and talent to lead the future,” said Thevanayagam. “If the government is going to pull the rug out from under us, we’re not going to be able to be aggressive. We’ll have to focus on maintaining our business rather than investing in new innovation.”

Our take: The NAM has pushed forcefully for the tax change to be reversed—and in October, told policymakers that the R&D amortization provision poses a “serious threat to our national security,” in part because of its impact on manufacturers like Parts Life that supply and support the U.S. military.

The bottom line: “The only way for us to continue to be relevant is to make sure that we’re investing in innovation and seeing what we can do to be a part of designing the future,” said Thevanayagam.

Visit the NAM’s R&D Action Center for critical R&D policy updates, industry stories and an opportunity to engage directly with your members of Congress. 

The manufacturing leaders who met in Washington, D.C., this month agreed wholeheartedly: D&I is integral to building and retaining the workforce of tomorrow.

At the third-annual Diversity+Inclusion Summit convened by the Manufacturing Institute, leaders gathered to share data, insights and lessons gleaned from their own D&I efforts. Hailing from many different industry sectors and companies of all sizes, the panelists and attendees laid out concrete actions that can transform companies’ D&I objectives.

Why it matters: With 2.1 million jobs expected to go unfilled in the industry by 2030, manufacturers need to find new populations of potential employees. Recruiting more women, racial and ethnic minorities and neurodiverse workers can expand companies’ talent pools and strengthen their workforces.

• In fact, increasing the current female workforce from 29% to 35% would fill the industry’s 746,000 open jobs all on its own, according to a recent study by the MI and Colonial Life.
• That’s why the MI is working to meet this target through its 35 x 30 Campaign—i.e., increasing the percentage of women in manufacturing to 35% by 2030.

How to do it: The summit offered important tips to help companies boost their D&I efforts, including:

• Get buy-in from company leaders: Research shows that D&I efforts lead to greater productivity, increased innovation and higher revenue—not to mention the recruitment and retention benefits. Once companies set D&I goals, leaders should incorporate D&I objectives into their annual goals to create opportunities for accountability.

• Use employee resource groups in a structured way: Companies should set up organizational structures for their ERGs that will ensure longevity and encourage fresh thinking, as well as align with companies’ overall D&I goals. These groups should have their own budgets and rotating leadership positions. When possible, the contributions of ERG leaders should be included in their incentive programs or annual goals.

• Educate your first-line supervisors about D&I: By training first-line supervisors on the latest in D&I and company-specific objectives, companies can help them both support their teams better and collect feedback to inform the overall effort.

• Offer child care and flexibility: In the post-pandemic environment, companies are still exploring what works best for them, but one thing is clear: to recruit and retain talent in a tight labor market, companies need to provide employees with options. (Check out our recent webinar on the same subject.)

Learn more: Interested in joining the conversation? Check out the MI’s D&I tools and resources, and register for upcoming events, including our upcoming Virtual Diversity+Inclusion Summit on Dec. 16, here. The virtual summit will include some recorded sessions from this event as well.

This story can also be found within the NAM’s R&D action center.

Corning Incorporated has been turning out innovations for well over a century and a half—since 1851, to be exact. But a recent change in tax policy that makes R&D more expensive could have a significant impact on the company’s ability to build on its impressive history.

• “We have a wonderful track record for innovation,” said Tymon Daniels, vice president of tax at Corning, a material sciences manufacturing company with a focus on glass.
• “In 1897, when Thomas Edison was working on electric lights, he came to us to make the glass bulbs. 110 years later, when Steve Jobs was working on the iPhone, he came to us to make the glass used for the screen. More recently, we figured out a way to make special glass vials that sped up production of the COVID vaccine. … We’ve been able to do this because of R&D.”

The issue: Until the beginning of 2022, businesses could deduct 100% of their R&D expenses in the same year they incurred the expenses. Starting this year, however, a tax law change requires businesses to amortize or spread their R&D expenses out over a period of five years, making it more expensive to invest in growth and innovation.

The impact: According to Daniels, the abrupt change in a policy that has existed for decades poses a serious challenge for the company. 

• “The R&D deduction has been in existence for over 70 years—a very good tax policy. Requiring the amortization of R&D expenses is a dramatic shift to a very bad tax policy,” said Daniels. “It causes a significant spike in cash taxes.”

The trade-offs: At a time when company leaders are trying to make decisions about how to invest finite resources, a significant increase in the tax burden can hinder future growth plans, Daniels emphasized.

• “Our C-suite is trying to make decisions about big issues like capital expenditures and jobs,” said Daniels. “This makes those decisions harder and comes at a time when the economic outlook is highly uncertain.”

The action: Corning is asking Congress to find a solution, and quickly.

• “We need lawmakers to extend the full deductibility of R&D expenses,” said Daniels. “If Congress can’t make a permanent fix, then at least making full deductibility retroactive to 2022 and extending it through 2025 would still be good. Otherwise, the impact to Corning may be extra cash taxes of roughly $150 million in 2022 alone.”

The last word: “Requiring the amortization of R&D is all I’m thinking about right now,” said Daniels.

This story can also be found within the NAM’s R&D action center.

Miltec UV operates at the cutting edge of the manufacturing industry, developing new UV lamp systems for curing inks and coatings for everything from optical fiber to soup can lids. But after a tax law change went into effect in 2022, the Maryland-based manufacturer found that R&D became much more expensive—hampering its investments and tamping down its growth.

• Until the beginning of 2022, businesses could deduct 100% of their R&D expenses in the same year they incurred the expenses. Starting this year, however, a tax law change requires businesses to spread their deductions out over a period of five years, making it more expensive to invest in growth and innovation.

We spoke with Miltec UV President Bob Blandford to understand how the change was impacting his company and consumers in the United States and around the world.

The impact: Because the law changes the way businesses have handled investments for decades, companies like Miltec UV are having to grapple with a significant new cost that they had not anticipated previously.

• “Absent congressional action, we’re gonna get hit hard,” said Blandford. “Our taxes are going to go up dramatically. That’s cash getting sucked out of the business. So that’s going to get pretty ugly.”

A critical moment: Miltec UV is facing this challenge at a time when its leaders believe an exciting new opportunity is right around the corner. The company has developed a new technology for lithium-ion batteries, which could be used for next-generation electric vehicles.

• Over the past 11 years, Miltec UV has developed manufacturing electrodes used in these batteries, which will allow manufacturers to reduce costs and eliminate the toxic solvents used in existing battery manufacturing processes.

Yet, the new tax change threatens to place significant burdens on their development of this technology.

• “The problem is in the auto world; once they say go, it’s about a five-year process,” said Blandford. “They have to prototype, prove it, test it, then make the batteries. And during that time, we need to support R&D and support the business. So amortizing R&D over five years is a showstopper.”
• “We’re at a critical place now—we’re so close to commercializing it—and now we’re having to pay more taxes out,” said Blandford. “It hurts.”

A burden for employees: If not reversed, the harmful tax change will eat into profits, which Blandford is concerned may impact important benefits for employees. Earlier this year, Miltec UV signed on to the NAM Manufacturers Retirement program—an association-wide 401(k) retirement and savings plan—as a way to improve benefits for employees. The program, which has resulted in cost savings for employees, has proved extremely popular, he added.

• However, “The tax change will have a tremendous negative impact on cash flow, so everything will be on the table,” including retirement benefits, Blandford said.
• “Our team is important to us, and the last thing we want to do is have a negative effect on paychecks and benefits,” said Blandford. “This absolutely will have a spillover effect on every part of the business.”

The last word: “Miltec funds 100% of the company’s R&D costs through the profits of its commercial business as opposed to outside investment,” Blandford said.

• “Spreading the R&D deduction over a five-year period means that each year we will now face a higher tax burden due to the inability to immediately deduct R&D expenses. That is real money that is desperately needed to stay competitive with employee salaries, benefits and even to support new R&D positions that we now are trying to fill.”

Get involved: The NAM has deployed a digital R&D Action Center that manufacturers can visit for critical R&D policy updates, industry stories and an opportunity to engage directly with their members of Congress: https://nam.org/protect-innovation/

Washington, D.C. – Following the announcement by the Office of the U.S. Trade Representative calling for a delay in a World Trade Organization decision on whether to expand a waiver of intellectual property, National Association of Manufacturers Vice President of International Economic Affairs Ken Monahan released the following statement:

“An expanded intellectual property waiver would jeopardize American innovations that are fundamental to fighting current and future pandemics and undermine U.S. technology leadership over our commercial rivals, such as China. Manufacturers welcome USTR’s announcement supporting a delay in the decision on whether or not to expand the WTO’s waiver on COVID-19 products and domestic supply chains and urge all WTO members to fully consider the consequences of such an expanded waiver.

“Efforts could be better spent focusing on other effective international approaches to deal with ongoing and potential global health crises.”

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The National Association of Manufacturers is the largest manufacturing association in the United States, representing small and large manufacturers in every industrial sector and in all 50 states. Manufacturing employs more than 12.9 million men and women, contributes $2.77 trillion to the U.S. economy annually and has the largest economic multiplier of any major sector and accounts for 58% of private-sector research and development. The NAM is the powerful voice of the manufacturing community and the leading advocate for a policy agenda that helps manufacturers compete in the global economy and create jobs across the United States. For more information about the NAM or to follow us on Twitter and Facebook, please visit www.nam.org.

The Manufacturing Institute with support from Colonial Life released a new paper that explores what manufacturers are doing to help close the gender gap, incorporating survey responses and interviews with various company executives that identify key insights and practical advice for other manufacturers. To address the workforce shortage, manufacturers need to expand their talent pools, bringing in more diverse and underrepresented candidates.

Women represent a sizable talent pool that manufacturers cannot ignore, especially as the sector becomes more advanced. Earlier this year, the MI launched our 35×30 campaign, which aims to do just that—increase the percentage of women among manufacturers from 29%, where we hover now, to 35% by 2030 by changing perceptions among women and girls about manufacturing as a career, attracting and retaining more female employees.

Read the full report here.