Last night President Barack Obama presented his 2013 State of the Union Address to the U.S. Congress which this author had the opportunity to view on television.  Overall it was a very uplifting speech which I enjoyed watching, but more importantly, it demonstrated vision and leadership.

The speech itself prescribed clear goals for the U.S. economy and addressed the various policy components related to insuring continued momentum in world class manufacturing and supply chain capabilities.  In this author’s view, the address provided a lesson in executive leadership in the midst of dysfunctional behavior and outright nastiness. There is no question that the President is an extraordinary communicator who can provide simple yet powerful messages that resonate for many. I especially enjoyed his articulation of a mission for U.S. economic direction:

A growing economy that creates good, middle-class jobs, that must be the North Star that guides our efforts. Every day, we should ask ourselves three questions as a nation: How do we attract more jobs to our shores? How do we equip our people with the skills they need to get those jobs? And how do we make sure the hard work leads to a decent living?”

That is a powerful way to articulate mission and direction.  Further, he addressed a number of initiative areas to enable this direction, many of which have direct relationship with supply chain capability.  Perhaps we in the U.S. have finally learned that we cannot subsist as a pure service-centered economy.  We have to make stuff and add value. The President noted that the first priority is to make America a magnet for manufacturing, and to make policies to accelerate these trends.  He announced the launch of three additional manufacturing innovation centers where businesses could partner with government and academia to turn regions into centers of high tech manufacturing capability. The President also called for a broader effort to support 15 of these innovation hubs across the country.

Manufacturing must support innovative products that customers want to buy. The President cited increased investment in strategic research and development, not seen since the space race, to foster product innovation.  Without R&D, America would not have new products and vibrant industries. A proof point offered- every dollar invested to map the human genome returned $140 to the economy.

In our 2013 Predictions for Global Supply Chains (available for no-cost download in our Research Center) we cite the need to address and resolve the ongoing shortage of talented manufacturing and supply chain skills. The President outlined a challenge to redesign America’s high schools to better equip graduates for high tech economy skills. He cited the model of Germany’s technical high schools, where industry and academia partner to train students in specific skills required in a manufacturing and high tech economy.

We have penned numerous commentaries citing the need for more modern infrastructure. The President called for quick repair of aging infrastructure, including roads, bridges, ports and waterways.  He cited 70,000 structurally deficient bridges across the country.  To avoid taxpayers shouldering the total burden of modern infrastructure needs, the President is proposing a Partnership to Rebuild America program to attract private capital to invest in modern ports, pipelines and facilities.

In the area of supply chain risk, the President acknowledged 12 of the hottest years on record in the last 15, leading to droughts, severe floods and more intense storms, including superstorm Sandy. He urged Congress to pursue a bipartisan, market based solution to climate change while threatening executive actions to move toward a more sustainable nation. Cyber security was also brought up a continued threat including stealing of corporate secrets and attacks on vital services that underpin the economy. There are no innovative products if competitors steal your IP. There is no functioning supply chain if systems are disrupted or taken out of service. The President called on the Congress to pass legislation to provide the government a greater capability to secure networks and deter cyber attacks.

In many of our past commentaries related to manufacturing and supply chain policy, Supply Chain Matters has often taken U.S. legislators to task for not sensing the urgency of what is required for world class supply chains, and for lacking a long-term strategic framework to support industry.  After viewing the President’s State of the Union address, we have little doubt that “he gets it”.  Today, the President visited the Linamar Manufacturing facility in Asheville North Carolina.  The visual is one of the President of the United States speaking from the shop floor, and relating how he gets the notion that manufacturing and supporting supply chains do matter. The success of American business is dependent on the skills of its workforce and robustness of its supply chains.

The question remains as to whether the Congress “gets it” and will do its part.

Bob Ferrari