John Engler, a former governor of Michigan, spent much of his June 3 Economic Club of Indiana presentation doling out praise – for Indiana rather than his home state – when it comes to “getting it right” on manufacturing. Engler, current president of the National Association of Manufacturers, feels that Gov. Daniels and others in Indiana government have helped create an environment in which manufacturing can thrive.
“As I go around the country and look at (manufacturing) data, Indiana stands out. Indiana is intelligent in manufacturing,” Engler said.
Engler noted business development tax incentives and the commitment to developing a skilled workforce as two areas in which Indiana is leading the way.
“In 1982, unemployment was 17%, but we could recover then without competition from a unified Europe or growing China. We have to be more strategic,” Engler explains.
Engler reminded the audience that the U.S. is still the largest manufacturing economy in the world but warns that any economic recovery will lag without a comprehensive manufacturing strategy in place at the federal level.
“It’s no longer governor vs. governor but governor vs. national leader,” Engler offered, adding, “The federal government has a role because states can’t compete when their incentives are dwarfed by the federal cost of taxes and regulations.”
Engler expressed particular disappointment with the recent expiration of a federal research and development tax credit – noting that the U.S. is now the only major economy in the world without a research and development incentive. He also mentioned the new 2.3% federal excise tax on medical device makers – a major part of Indiana’s economy – as an unnecessary burden.
“I don’t know of another country in the world that takes a leading sector (medical device manufacturing) and says, ‘let’s hit them with $20 billion in new taxes.’”
Education leading the way
Regulatory and tax policy changes may improve the U.S. business climate but education, according to Engler, is key to another of his stated goals – for the U.S. to become the best place in the world to conduct research and develop new products. He highlighted the industry’s need for engineers, computer programmers and other highly skilled professionals. Engler complimented Ivy Tech Community College in particular on its efforts to produce an advanced manufacturing workforce for the future.
Engler believes we can dramatically improve education on a national basis by building on currently successful initiatives – no matter how small or regional they may seem.
“We have solved every education problem in America. Every problem has been solved in some area. We are just terrible at replicating successful programs,” Engler explains.
Engler’s luncheon presentation in Fort Wayne was the first of three stops on the Economic Club’s traveling summer series. The summer series continues with John Norquist, president & CEO of Congress for the New Urbanism, speaking in Evansville on July 15. Learn more.