National Competitiveness Forum


Wednesday, October 30, 2013

Thank you, Chairman Allen.  It’s great to be here with leaders in business, higher education, labor, and more.  Over the past 4 months, I’ve visited 13 states and four countries.  My primary goal has been to listen to America’s business community.

CEOs are optimistic about the future of their business… and about the future of our country.  

That feeling is shared by both me and President Obama.

As you know, our private sector has added 7.6 million jobs over the past three and one-half years.  But we still have much more work to do to get our economy going.

There’s one thing we definitely cannot do – and I just want to say this upfront.

Last week, we found out that the shutdown meant 120,000 fewer jobs were created.  It trimmed about a quarter-point from our GDP growth in the fourth quarter.  
We can’t afford that.

As a business leader for the past 27 years, I know that you can’t run a business that way.  We definitely shouldn’t be running the government of the world’s largest economy this way.

The president has been clear – and I think everyone in this room agrees: These self-inflicted wounds to our economy must stop.
Instead, we need to focus on what works to spur economic growth and job creation. 

And I want to thank Sam Allen, Deborah Wince-Smith, and the Council for helping us do just that with your new paper, A Clarion Call for Competitiveness.  
This afternoon, I want to focus on some key areas that were mentioned in that paper, which I think are particularly important.

First, infrastructure.  

The Council is calling for our nation to invest $2.2 trillion dollars in infrastructure over the next 10 years.  The fact is, we’ve already deferred too much investment in this area.  

With interest rates still low, we should put construction crews back to work building the transportation hubs and links that move our goods. 
The long-term benefits are clear: more efficient production and delivery… stronger exports… and more competitive businesses overall.
It’s not just about roads and bridges.

In the 21st century, our digital infrastructure will only become more crucial.

For our part, the Commerce Department has worked since 2009 to deploy more than 100,000 miles of broadband.

This is bringing more opportunity to hundreds of rural and underserved communities in every corner of our country.

Bridges to broadband – we need it all.

Before I move on, I’ll just note that the private sector itself can play a stronger role with infrastructure investment.  For example, ideas like a National Infrastructure Bank have garnered strong bipartisan support.

We can’t afford to wait any longer.  
We all must work together to unlock the capital for the infrastructure improvements that America needs now.

Second, we need more workers with the right skills.   
This Council’s new paper boldly states that we need to “ensure low-cost, easy access to high-quality education and training for all Americans.”  

I couldn’t agree more – which is why I’ve been working closely with Labor Secretary Tom Perez on this issue.

On Friday, President Obama was in Brooklyn to visit a local school called Pathways in Technology Early College High School.  
That school is focused on STEM education and training.

In Chicago, where I served on the school board, we liked the model so much that we launched five of these schools, partnering with IBM, Microsoft, Cisco, Motorola, and Verizon.

An emphasis on STEM education is smart.  After all, STEM-related jobs are growing three times as fast as others – and they pay about 25 percent more.

More broadly, I think we need to focus on helping the long-term unemployed find paths to new jobs.  

The fact is, we have about four million job openings even though about four million Americans have been searching for a job for over six months.  To bridge this gap requires not just matching but also in some instances, re-training.

This Council is on-the-mark in calling for stronger partnerships between training institutions and businesses.

Last week, I met with business leaders who have made workforce development a top priority.  This has become a competitiveness issue – even a bottom-line issue – for their companies.

The first question we should ask is this: What do local employers need in their workforce?

The local community needs to answer that question as a group.  

City and regional governments, high schools, vocational education schools, Colleges, universities, nonprofits, workforce boards, and others must all be involved with business to answer this question. What do local employers need in their workforce?

Only then can we align the local ecosystem of training to make sure good jobs are getting filled.

Clearly, it’s time for business leaders to come together across industries, sectors, and regions to lead the way.

All of us need to support industry-led efforts that link up with skills and training institutions.   Particularly, business needs to be more active in working with local training partners to develop meaningful curricula and broadly-recognized stackable credentials.

Overall, my message is simple in this area: 

Let’s operationalize locally the models that are most promising.
Let’s replicate the best practices that work. 
And let’s create more win-wins for employers and those who need jobs.

I’ll just mention one more area related to our workforce – because so many CEOs have brought it up to me.

Business leaders want immigration reform.  

The fact is, about 40% of Fortune 500 companies were started by first or second generation Americans.  Fully 30% of small business owners in this country are immigrants.

More broadly, nearly one-fourth of our entire workforce is foreign-born.  

The immigration bill that passed the Senate would expand temporary and high-skilled immigration programs – programs that our businesses need now.
It is imperative that Washington wakes up to the fact that we are in a global competition for talent.  

It’s mind-boggling to think that our world-class universities here today who attract some of the world’s brightest students, give them a top-notch education, and then we force these potential innovators and job creators to leave America.

That’s simply unacceptable.

We need to staple a green card to their degrees, particularly when they get a degree in highly-specialized areas from universities like yours… and particularly when they have a job offer from companies like yours.

With projections saying that immigration reform will increase real GDP by about $1.4 trillion in 2033, this reform should be at the top of our country’s to-do list.
I encourage you to make your voice heard on this issue.

A third key area is federal support for R&D and innovation.

Every competitive country in the world understands the need to publicly invest in R&D to create a broad base for potential breakthroughs.

A clear example of this is U.S. investments in our Defense Department starting in the 1960s which created the building blocks for the Internet.  Our world would be a much different place today without that commitment.

For our part at the Commerce Department, we invest in labs at our National Institute of Standards and Technology in Maryland and Colorado.  

NIST has cooperative R&D agreements with many top companies… and guest researchers often come in and work alongside our teams.  Right now, for example, we’re working with a Lockheed Martin subsidiary to better understand and develop high-performance composites for aerospace applications.

I know that several federal labs are on the Council on Competitiveness – so I’m sure you all understand the importance of this work.

And, of course, the universities here all know the crucial nature of federal funding for research.  For example, Stanford – where I went to school – now uses federal funds for about two-thirds of its R&D spending.The president and this Council are in lockstep on this issue.  

We want to double federal funding for R&D, helping reverse the erosion we’ve seen in federal funding in this area.  (As a percentage of all basic research funding, federal funding has dropped from 70% in 1980 to about 57% in recent years).

We can’t stop– because too many game-changing ideas aren’t making it from the lab to the marketplace.

A quick story.

Back in the 1980s – arounf the time the Council on Competitiveness was formed – we were at risk of losing our competitiveness in the semiconductor industry.

The U.S. government partnered with about a dozen chip companies and invested half-a-billion dollars to ensure that did not happen.

One of my first trips as Secretary was to Albany, New York, where you can see the fruits of that investment.

It’s a unique place where would-be-rivals are still coming together to jointly engage in pre-competitive research.  They’re co-located with a local SUNY college of nanoscale science.

They’re trying to figure out how to make the surface on which we make chips – called wafers – bigger.  This could bring down costs and add more functions to our smartphones, tablets, and car electronics.

As a result of this kind of work, the area is attracting billions of dollars in private investment from around the world.  

In other words, that initial federal funding worked.

This is the same approach we are taking with the National Network for Manufacturing Innovation – the NNMI.  

In 2012, we worked with the Defense Department to launch a pilot for this effort in Ohio in the fast-growing field of 3D printing.  

The administration is launching 3 more pilots in coming months – one in power electronics, another in lightweight metals, and a third digital manufacturing and design.  

This is a competitive process, and the response has been very strong and positive.

There is so much demand to innovate that the President is calling for up to 45 institutes – which will be global hubs of innovation in cutting-edge fields.

For my part, I will emphasize the need for NNMI in a couple of weeks when I testify before Congress for the first time as Secretary.

And let me be clear.  I’m supportive of these Manufacturing Innovation Institutes because we listened to leaders like you. 

The NNMI was a top recommendation of leaders from this community.  That includes both this Council as well as those who served on our Advanced Manufacturing Partnership. 

Looking forward, we need more ideas like that.

That’s why I am working to reinvigorate AMP and its Steering Committee – into AMP 2.0.   

We have co-chairs Andrew Liveris (Dow) and Rafael Reif (MIT)… as well as dynamic board members from this Council like Michael Splinter (Applied Materials) and Shirley Ann Jackson (Rensselaer Polytechnic Institute).  

AMP 2.0 will be meeting for the first time soon.  

I have no doubt that their insights and leadership will blaze a new trail for American innovation.

Yes, the next generation of cutting-edge products and technologies need to be born here in the U.S…

But let me close on the topic of exporting – because the fact is, U.S. firms already make a lot of great products and services.   However, we are just not doing enough to sell them globally.

We are hitting all-time records in U.S. exports with $2.2 trillion in 2012, but too few U.S. firms are exporting to too few countries.  

Less than one percent of our companies export – and of those that do, nearly 60 percent export to only one country.

I recently attended the Asia-Pacific Economic Cooperation meeting in Bali.  

One of the hot topics was our 12-nation push to conclude the Trans Pacific Partnership trade agreement.  

The TPP is crucial, because APEC economies represent over half of global GDP and nearly half of world trade.  

That’s a huge opportunity to build on the nearly 10 million American jobs that are already supported by trade.

Also in Bali, I met with my counterparts from Southeast Asia to promote policies that can provide a level playing field for U.S. exporters… and I advocated on behalf of individual U.S. firms that do business there.  

Looking forward, I intend to do even more “commercial diplomacy.”  

I want to serve as the “Chief Commercial Advocate,” if you will, for our private sector – including all of you in this room. 

Let me just close by saying that, with all of our priorities at the Commerce Department, I believe that my Department needs to hold ourselves to the same high standards that businesses do.  

We should provide strong ROI for America’s companies, communities, and taxpayers… and we should be driven by outcomes, just like any business with a bottom line.  

Also, we need to move at the pace of business.

I’ll leave you with a short anecdote that some in the press have reported.

I have a sign on the door to my office that says “Open for Business.” 

I brought it with me when I was confirmed. 

When the shutdown happened, someone on my staff had to flip it over, which was appropriate because about 30,000 of our employees had been furloughed.
I’m pleased to say that now it is right-side-up once again.   

I want everyone who walks in – from the cleaning staff to foreign dignitaries – to know that America is open for business. . . and that the Commerce Department is an ally for people like you who are leading our nation’s top businesses, universities, and other institutions.

If we work together, I know that we can have a powerful response to the Clarion Call for Competitiveness.

Related content

Last updated: 2015-10-19 12:56

Bureaus & Offices