Enacting President Obama’s Manufacturing Blueprint Means Sustained Economic Growth

How to Build America’s Energy Future

Schott Solar employee trims a photovoltaic panel in a glass room at the company's plant in Albuquerque, NM. A strong clean energy industry will give rise to more American manufacturing jobs and in turn will help rebuild our struggling middle class and create a more sustainable and fair economy. AP Photo

by Kate Gordon

President Barack Obama last night presented in his State of the Union address a blueprint for sustained growth in our economy consisting of four key parts: manufacturing, energy, worker preparedness, and American values. When it comes to America’s global leadership on clean energy, these four are inextricably linked.

A strong clean energy industry will give rise to more American manufacturing jobs, especially for skilled workers. This in turn will help rebuild our struggling middle class and reinforce the basic American idea that the economy must work for everyone, not just a wealthy few. Here’s how the four parts work together to build what the president says is an economy that can last.

Scaling up America’s clean energy sector

America is already in a leadership position on clean energy. In 2011 we reclaimed the title of “World’s Largest Energy Investor” from China. U.S. investment in these technologies rose a staggering 33 percent to nearly $60 billion, whereas investment in China remained steady at about $47 billion. Globally, U.S. venture capital dominates the cutting-edge clean energy investment market, with U.S. venture dollars accounting for 76 percent of the $2.2 billion in clean-technology venture investments across the world in 2011. Visionary programs such as the American Recovery and Reinvestment Act’s targeted subsidies to renewable energy developers have catapulted us into this leadership position, and contributed to bringing renewable energies to a place where they are nearly cost-competitive with the much more established, much longer-subsidized traditional fossil fuels.

The president’s energy recommendations in his State of the Union address will continue this trend. As my colleague Dan Weiss writes, the speech included important recommendations to increase renewable energy development on public lands, provide incentives to businesses to upgrade their buildings and factories, and support the U.S. Navy in its goal of making the largest purchase of renewable energy in history. President Obama also called on Congress to show similar leadership by passing a clean energy standard, and by finally extending the Production Tax Credit for clean energy development.

Manufacturing for the new energy economy

By increasing demand within the United States for renewable and efficient-energy technologies, these programs will spur domestic manufacturing of these same technologies. Fully 26 percent of all jobs created from clean energy investments are created in the manufacturing sector. And as oil prices rise, so do transportation costs for manufacturers, who are increasingly looking to move their production facilities closer to both suppliers and customers. A recent manufacturing company survey by Accenture notes that “although offshoring will continue to play a role in the supply location strategy of companies, it will be largely done in the context of chasing the demand location.” The more clean energy we demand, the more clean energy will be made in America.

The president’s proposals will not only spur demand, they will also directly support the U.S.-based manufacturers who step up to supply that demand. His speech last night speech was notable in its strong focus on the importance of manufacturing to the American economy:

“[W]e have a huge opportunity, at this moment, to bring manufacturing back. But we have to seize it. Tonight, my message to business leaders is simple: Ask yourselves what you can do to bring jobs back to your country, and your country will do everything we can to help you succeed.”

The speech included a suite of proposals aimed at bringing manufacturing back to U.S. shores: everything from taking away tax deductions and assessing a basic minimum tax for businesses basing their operations overseas to providing targeted financial support to companies that decide to relocate in the United States. The president is expected to give more details on these proposals in a speech today in Cedar Rapids, Iowa.

Of particular importance to the clean energy sector is the president’s proposal to double the tax deduction for U.S.-based high-tech manufacturers. Renewable energy, energy efficiency, and clean transportation technologies rely on just this kind of high-tech manufacturing. Wind turbines, thin-film solar cells, electric batteries, and smart grid components are just a few examples of the kind of complex, highly engineered products that characterize the new clean energy economy.

Even more central to the joint goals of increasing manufacturing competitiveness and decreasing America’s carbon emissions was the president’s proposal to save businesses $100 billion in energy costs while “[helping] manufacturers eliminate energy waste in their factories and give businesses incentives to upgrade their buildings.” The details of this proposal are not yet public, but helping manufacturers save energy is a critical piece of the goal of making them more globally competitive, because it allows them to spend less on energy and more on hiring skilled workers, installing new equipment, and doing research into innovative new technology developments that can keep them on the cutting edge.

Preparing workers to lead the energy future

This brings us to the third part of the president’s speech: worker preparedness.

“I also hear from many business leaders who want to hire in the United States but can’t find workers with the right skills. Growing industries in science and technology have twice as many openings as we have workers who can do the job. Think about that – openings at a time when millions of Americans are looking for work.”

Indeed, our skilled workforce is one of America’s key competitive advantages, but our current education and workforce programs are not keeping up with demand. The utility sector’s struggle to find skilled workers is well known. As of 2008 about 53 percent of the industry’s workforce was age 45 or older, and industry experts project that they will lose nearly half of this workforce to retirement in the next 10 years. But the problem is not confined to the utility sector. It is endemic among advanced energy manufacturers as well.

The president’s speech focused on just such a manufacturer: a Siemens gas turbine plant in North Carolina that formed a partnership with a local community college to develop specific courses intended to train workers in the area to operate the plant. In calling for more support for community colleges to become “community career centers,” the president demonstrated his commitment to these industry partnerships, which we at the Center for American Progress firmly support as one of the most effective ways to target workforce training to meet the needs of actual employers, so workers are not trained for jobs that don’t exist.

Reinforcing American values

Solving the labor shortage problem of advanced energy manufacturers and utilities isn’t just good economics. It’s a critical piece of the puzzle of how we rebuild our middle class. Because it creates so many jobs across a range of “middle-skill” occupations including manufacturing, construction, operations, and maintenance, the energy sector provides solid opportunities for the 70 percent of working-age Americans lacking a four-year college degree. Nearly 50 percent of all clean energy jobs employ workers in this category. And these jobs pay a median wage that is 13 percent higher than in the economy as a whole.

These are the kinds of jobs that created the American middle class in the first place. They are the kind of jobs we need to keep America strong and competitive into the future.

And there’s a huge added benefit. When a U.S.-based manufacturing company gears up to produce clean energy technologies, and when a new workers is hired on by that plant, they are not just helping the American economy get back on its feet. They are investing in the long-term health and sustainability of the truly awe-inspiring country in which they, and we, are privileged to live.

As the president said last night, “This nation is great because we built it together.” Now is the time to work together to build the clean energy economy that will keep our nation stable, secure, and prosperous for all.

Kate Gordon is Vice President for Energy Policy at the Center for American Progress. This piece was originally published at the Center for American Progress website.

5 Responses to Enacting President Obama’s Manufacturing Blueprint Means Sustained Economic Growth

  1. Jeff H says:


    When virtually all the relevant scientific organizations around the world have told us that climate change is real, and is deeply problematic …

    When the clock is ticking, and nature doesn’t care about our timing; she’ll do what she does, whether we like it or not …

    When we know that what we’re doing is deeply insufficient, and that what is being proposed is deeply insufficient …

    And when we understand the human and moral gravity of the issue — the stakes involved — or at least we should understand them by now …

    … Why are we congratulating Obama and patting the Democrats, and (I guess) ourselves, on the back? Why is CP seeming to turn itself into a propaganda machine? What is being smoked, there in Washington?

    May I ask, will Joe be writing a straightforward assessment of Obama’s State of the Union Address in relation to what science tells us about the current situation, what science tells us about what sorts of changes are necessary, what science tells us about the time-line, and what Robert Brulle (and others) says happens to media coverage and messaging when the President himself doesn’t bother to emphasize climate change?

    Is it just today — with Dan’s post, and now this one — that CP is taking the unduly positive, propagandist approach, or should we expect this as a new trend as we all head into the full-year election cycle?

    I know, I know: some people may call me “negative”. But what we are presently doing is not working. That’s my only point. We’re gonna need to find approaches that DO work, if we want to address climate change, that is.

    In any case, sorry for the gripes.


  2. Lore says:


    I wouldn’t call you negative. Maybe a died in the wool realist though.

    Just Monday the EIA gave its 2012 Annual Energy Outlook, with updated projections for U.S. energy markets through 2035. By their estimates world oil consumption will outstrip supply from producers outside of the OPEC bloc, causing oil prices to hit the $120 mark in four years. I would say a conservative time estimate.

    They also don’t believe in the assumption that greenhouse gas emissions will be reduced substantially by 2035. Projecting shifts to “green” energy, for example, renewable fuels (wind, solar, geothermal, biomass) including hydro power, to only account for 16 percent of electricity generation by 2035. Coal and natural gas will still dominate pushing another conservative figure of adding a 3% higher increase in carbon dioxide emissions over 2010. This contrasts with the declines of 50 percent to 80 percent by midcentury that scientists say are needed to stabilize global temperatures.

    In other words while we praise sustained economic growth here, it looks to be being built once again on the filth of the past with no one significantly addressing climate change for at least a couple more presidential election cycles. How much more time do we think we have.

    It’s already quarter past twelve!

  3. David B. Benson says:

    To eliminate coal burners build NPPs. Wind turbines promote natgas burners as balancing agents.

  4. prokaryotes says:

    This depends on what kind of dispatchable backing supply one choose. A portfolio with solar, wind, tide, thermal or hydro setup over large areas and connected through HVDC can be also used to compensate.

  5. Calamity Jean says:

    Anhydrous ammonia, synthesized from air and water using surplus electric power during excess wind periods can also be burned in low wind to balance power usage.