The Boston Consulting Group (BCG) released a report identifying seven industries poised to return manufacturing to the United States from China over the decade. Re-shoring will be driven by increased Chinese labor costs, the volatility of other Chinese costs (e.g., exchange rates, transportation), and an increasingly productive U.S. manufacturing sector. The report suggests 600,000 to 1 million new U.S. manufacturing jobs could be directly created, along with 1.8 to 2.8 million additional indirect jobs.
BCG’s report argues that production leaving China is more likely to return to the United States rather than Mexico—which enjoys a cost advantage—partially because the relative strength of the U.S. manufacturing workforce. That relative strength is at risk; CFR’s Ted Alden discusses the shortage of skilled workers in the U.S. manufacturing pipeline. Firms, governments, and unions must work together to build a workforce that will support a manufacturing renaissance.
International trade and investment. Read more from leading analysts on the debate over next steps in U.S. trade policy.
FTC Issues Online Privacy Report
The Federal Trade Commission (FTC) issued its report on online privacy (Bloomberg). The report calls for Congress to enact new privacy laws while also encouraging the burgeoning online advertising industry to accelerate self-regulation. A signature goal of the FTC is a “do-not-track” feature in web-browsers by year’s end. Consumer privacy will be challenged by new technologies; the FTC raised concerns about face-based marketing (Bloomberg).
Innovation. Read more on how the U.S. capacity to innovate could play a chief role in economic growth.
Education and Human Capital
States Improving Cases for NCLB Waivers
Education Week reports that the second round group of states applying for No Child Left Behind (NCLB) waivers made strides with programs targeting special education students and English language learners, but many need to improve accountability systems. With five more states in the third and final round to go, forty-two states will have sought NCLB waivers from the education department. Waivers increase flexibility for the states in exchange for compliance with new department guidelines.
Race to the Top Targets Districts and Early Education
Secretary of Education Arne Duncan announced that the $550 million for the next Race to the Top contest will go towards district-level reform and early education (Education Week). Concerns remain over the relative small pot of money to be split between the two priorities; the original Race to the Top contest awarded over $4 billion to twelve states for K-12, and the department awarded $500 million last year to nine states for early education.
The new report of the CFR Independent Task Force on U.S. Education Reform and National Security asserts that fixing the nation’s underperforming K-12 public schools is critical for strengthening the country’s security and increasing its economic competitiveness.
Education and human capital. Read more from experts discussing ways to improve U.S. education and immigration policies.
Corporate Regulation and Taxation
Uncertainly Remains Over Dodd-Frank Rules
The Hill reports that the Chamber of Commerce has major concerns about the slow implementation of Dodd-Frank. Its scorecard for the new regulations gave “incompletes” to fifteen of seventeen regulatory categories. A spokesman for the chamber pointed out that “We’re almost two years into the regulatory process, and we still don’t know [the rules].” The spokesman also said that while the chamber is concerned about uncertainty, it also prefers undesired regulations to be delayed, creating a position that he said was “admittedly schizophrenic.”
Corporate regulation and taxation. Read more from top economists and business experts on solutions for addressing corporate tax reform.
Steven J. Markovich holds an MBA from the University of Chicago’s Booth School of Business.