The global financial crisis has adversely affected nearly every sector of the economy and the fiscal health of our state. While reducing government expenditures may be a necessary action, the long-term health of the state will require that we maintain the tangible assets that are the foundation for economic recovery and future growth.
The difficult lesson learned in recent recessions is that the foundation for economic growth is the skill of our workers and the capacity of our industry—not in financial services speculation. Manufacturing research and development is the largest source of innovation and growth in our state.
Manufacturing, directly and indirectly, drives the health of the state’s other sectors. Without the income generated from manufacturing, the demand for services declines, driving down tax revenues and the quality of life for all Illinois citizens. As we work to rebuild the foundation of our economy, it is essential that we invest in helping our manufacturing sector survive in the short-run and make the right investments to be positioned for growth as the recovery takes hold.
Manufacturing Recovery Strategy
There are three keys to the recovery of the state’s manufacturing sector:
- Survival of the state’s small and mid-sized manufacturers. While most of the state’s large manufacturers have taken actions to ensure their survival, smaller manufacturers remain at risk. These companies employ most of the manufacturing workforce and are essential parts of the supply chains that enable large manufacturers to be globally competitive. Continued losses of our smaller manufacturers will prevent the Illinois economy from recovering quickly when the world emerges from recession.
- Technical assistance. Smaller manufacturers do not have extensive resources. They need to make the best choices to ensure their survival and prepare for future growth. They need rapid access to independent expertise to help identify areas of competitive weakness, develop their strategies and implement changes that will improve short-run profitability (or in many cases, minimize short-run losses). They need access to expertise to help them improve agility—the capacity to respond quickly to future growth opportunities.
- Access to financing/funding. With declining manufacturing production, many small manufacturers need financing to sustain their operations and support investments in the new strategies that will reduce short-run costs, while enabling them to respond rapidly to future opportunities. In addition, manufacturers in some sectors will have an opportunity to participate in emerging market opportunities—such as those that will generate “green jobs” growth. However, in many cases, they will need to invest in new equipment and workforce development to obtain the capabilities required to be suppliers in these sectors.
Now is the Time to Act
Working together with the Illinois Department of Commerce and Economic Opportunity and other state agencies, IMEC is prepared to help manufacturers meet the challenges they face while building the foundation needed for future success through the adoption of Next Generation manufacturing practices. Now is the time when our state’s manufacturers are most in need of help. Now is the time when companies have the capacity and recognize the critical need to make the changes that will enable survival and future growth. The state of Illinois and our manufacturers cannot afford to miss this opportunity. While it is no doubt true that resources are limited and there are many competing needs, failure to adequately support manufacturing will risk prolonging the recession and further weaken the state’s financial health.
Let’s keep our manufacturing base strong today…and prepare it for the next generation. iBi
