The WashPost gets it wrong again: The replacement of old technologies by new ones drives growth

UPDATE:  Whoriskey replies below.

Guest blogger Kate Gordon is CAP’s VP for Energy and Climate Policy.

In yesterday’s Washington Post, Peter Whoriskey argues – predictably for the Post these days – that making lightbulbs more efficient puts Americans out of work.  The last US-based GE factory to make old-school incandescent lightbulbs is going out of business, and here is Whoriskey’s explanation:

During the recession, political and business leaders have held out the promise that American advances, particularly in green technology, might stem the decades-long decline in U.S. manufacturing jobs. But as the lighting industry shows, even when the government pushes companies toward environmental innovations and Americans come up with them, the manufacture of the next generation technology can still end up overseas.

But the real story is, as usual, more complicated.  First of all, the U.S. is not the only country to move beyond wasteful incandescent lightbulbs, which burn out ten times faster than fluorescent bulbs.  The European Union, Australia, Canada, Russia, Brazil, and Argentina are among the other countries that have passed regulations to phase out these old-school bulbs.  So it isn’t a question of the U.S. driving these manufacturers overseas; instead, we are talking about a global shift to newer, more efficient technology.

Second, the phase-out of incandescent bulbs may be bad for this one factory, but it is not a job killer.  In fact, U.S. regulations on energy efficient lightbulbs have created jobs across the lighting industry, in research, development, manufacture, and sales of compact fluorescent and LED bulbs.  The company Cree, for example, employs over 1400 workers in its factory in Durham, North Carolina, where it manufactures LED bulbs for a variety of uses.  Not only are these American jobs, these are American exports:  Cree famously provided the LED bulbs that powered the video boards and the Water Cube at the Beijing Olympics in 2008.

Just as the move away from snail mail and toward the internet cost some postal service jobs but created thousands of high-tech careers, so does the move away from yesterday’s energy technologies toward a new energy future hurt some industries while creating new jobs in others.  The key is for the old industries to adapt and innovate, by leveraging existing assets – like skilled workers and manufacturing facilities – to use in new technology development.  When the automobile replaced the horse-drawn carriage, some blacksmiths lost their jobs.  But others leveraged their metalworking skills to become the first auto mechanics of the 20^th century.  Programs like the advanced energy manufacturing tax credit, otherwise known as the “48C program” after its section in the tax code, can help American companies innovate.  But even this program, which was part of the Recovery Act and has bipartisan support, has not been renewed by Congress.

This leads to the final point:  in order to innovate and compete in the industries of the new global energy economy, companies need the certainty that the U.S. is actually going to be a player in that economy.  Right now, they do not have that certainty.  The Congress has failed to pass a comprehensive climate and energy strategy that works to create markets, facilitate financing, and provide the infrastructure for clean and efficient energy technologies.  Those countries that have these policies – countries like China and the European Union nations – have surged ahead in clean energy patents and renewable energy installations, while decreasing their energy demand and carbon emissions.  China, while the world’s largest polluter, is now also the world’s largest investor in clean energy technology.  In contrast, as venture capitalist John Doerr pointed out at this week’s National Clean Energy Summit in Las Vegas, of the top 10 companies in three areas — solar, wind, and batteries globally — the U.S. has only 4 companies of the 30.  Imagine, he said, if that were true of the Internet, telecom, and information technology.

Unless the U.S. moves forward with a clean energy plan – including critical support for manufacturers to retool their facilities and become part of a new global energy marketplace – we will continue to fall behind, and factories like the GE lightbulb plant will continue to close their doors.  It’s not about government action killing jobs; it’s about government inaction killing any hope for sustainable economic growth.

– Guest blogger Kate Gordon is the VP for Energy and Climate Policy at the Center for American Progress.

UPDATE:  Peter Whoriskey replies via email:

This post brings up an anecdote and a few speculations about innovation to suggest that there is job creation happening in the U.S. light bulb industry. But here are some facts that should be considered:

1) The number of U.S. jobs in the electric bulb and parts industry has been dropping steadily since at least 2001,  when there were 18,000 employed, to 9,000 last year. Those figures come from the Bureau of Labor Statistics Quarterly Census of Employment and Wages.

2) You suggest that the U.S. will make back the jobs lost in incandescent light bulbs with factories making CFLs and LED light bulbs. But there is no significant CFL manufacturing done in the U.S. And while some LED light bulbs are made here, that technology represents less than 1 percent of sales.

3) Finally, while Cree does indeed make some LED light bulbs, they are primarily a maker of LEDs themselves, which go into an array of products in addition to lights bulbs, such as mobile phones, computer monitors etc. Additionally, some of the bulbs they do manufacture are produced in China.

Kate Gordon replies:

Thanks so much for your reply.  I see your points, but in fact the argument I was making was not that we can save the incandescent light bulb industry — rather, that the U.S. can be competitive in a transition to a lower-carbon economy, but that in order to be competitive, we need to leverage our current strengths (including innovation in new, lower-carbon technologies, and also other areas where we do remain competitive in advanced manufacturing).  So I was making a broader point about transitions driving growth, not a narrow point about the lightbulb industry. I felt like your piece extended out the lightbulb story into a broader point about regulation causing the death of US manufacturing, which is misleading.

Hope that clarifies it a bit.