Small businesses bringing jobs home

MCT FORUM, By Karen G. Mills –

U.S. Small Business Administration

In recent years, a perception has taken root that America no longer makes things. It has become an all but foregone conclusion that it is financially prudent for businesses to move production and jobs overseas in a race to the bottom for the cheapest labor.

There’s just one problem with that: It isn’t true.

In fact, over the last two years, American manufacturing has added more than 330,000 jobs, the strongest two-year period of manufacturing job growth since 1995 to 1996. Also, the Institute for Supply Management’s survey has shown 29 consecutive months of expansion, its longest streak since the 1970s. And today, America remains the leading producer of goods, with 20 percent of the world’s manufacturing output.

Even better, an increasing number of American manufacturers are bringing jobs back to the United States — a trend called “insourcing” or “onshoring.”

On Wednesday, the president and I spoke with businesses from across the country at the White House. We heard from a furniture manufacturer in North Carolina that reopened a plant after bringing jobs back from Asia — this created 130 jobs — and a lock manufacturer in Milwaukee that originally offshored 1,000 jobs in the ’90s, but through insourcing is now running at full capacity for the first time in 15 years in Wisconsin.

Also a Detroit-based technology company told us they find more value in U.S.-based operations because of factors such as proximity to customers, reduced travel costs, and a close partnership with local colleges. After 18 months, they’ve already hired 150 people, and they have sponsored an effort that calls for other companies to “outsource to Detroit.”

All across the country, businesses are turning the “offshoring” trend upside down. One study estimates that 3 million jobs may return home over the next several years due to the onshoring movement. Another survey indicates that over 60% of manufacturing executives are evaluating onshoring options.

What we heard on Wednesday was that there are many reasons “Made in America” is making a comeback. For example, we have the highest concentration of skilled labor in the world. Also, the speed, flexibility and quality control with which our production facilities make goods and deliver services is second to none. And, of course, we continue to have the most innovative entrepreneurs.

Looking forward, our challenge is to build on the momentum we’re seeing in both U.S. manufacturing and services.

Through the Obama administration’s We Can’t Wait efforts, common-sense steps were announced to incentivize insourcing. From SBA, we’re going to build on the use of our International Trade Loan to support small businesses seeking to insource. SBA can guaranty 90 percent on these loans that go up to $5 million to help those who’ve been hit by import competition, and to finance exports for small businesses.

The SBA stands ready to help businesses get the training and the tools they need to keep growing in other ways, too. Maybe they need to get plugged into a larger firm’s supply chain after they bring operations back to the U.S. Maybe they need a loan to finance their accounts receivable on a new contract. Or maybe they just need to sit down with a mentor who can help them make a good plan to scale up. SBA has the tools to help small businesses grow and create jobs.

I grew up in a manufacturing family. I know that we are a nation of inventors, makers, and doers.

Today, American manufacturing is poised for a renaissance. Let’s do everything we can to maximize it, to put people back to work, and to make sure the world knows that Made in America is still number one.