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Who Is Missing From The Table?

by Joseph S. Francisco, ACS President, and Terry A. Ring, Vice Chair, Council of Chemical Research
April 26, 2010 | A version of this story appeared in Volume 88, Issue 17

Joseph S. Francisco, ACS President
Credit: Peter Cutts Photography
Credit: Peter Cutts Photography

In 1971, the U.S. trade balance turned negative after more than four decades of surpluses. The cumulative trade deficits since 1985 total $8.2 trillion. The associated loss of jobs and manufacturing capacity threatens the nation’s economy and our national security. Our present annual international trade deficit, 6% of our $14.4 trillion gross domestic product (GDP), is 20% larger than Social Security, 23% larger than all defense spending, and 19% larger than Medicare and Medicaid spending. In this decline, various manufacturing industries have left the U.S., including machine tools, steel, and consumer electronics. The chemical industry could be next unless action is taken.

Terry A. Ring, Vice Chair, Council of Chemical Research
Credit: Peter Cutts Photography
Credit: Peter Cutts Photography

The chemical industry has long been very profitable for the U.S. However, in 2001, the U.S. trade balance for chemicals slipped into negative territory for the first prolonged period in eight decades. Although the trade balance for chemicals bounced back in 2007, it became negative again in 2008.

Our colleagues have suffered. The chemical industry lost 15,000 jobs in 2008, which is a 1.7% decrease in employment from the end of 2007. In 2008, chemical industry employment was below 880,000—down from more than 1 million in 2002. The current economic recession has made the situation even worse; 41,300 more chemical industry jobs have been lost since June 2008. Many of the jobs that were lost paid well; equipment operators were earning about $40,000 per year, and chemical engineers were averaging more than $95,000 per year.

Only a decade ago, the U.S. was the world’s top chemical manufacturer, boasted the latest technology, and was home to the world’s largest market. Today, this is not true. With annual sales of $689 billion—which corresponds to 4.8% of the U.S.’s GDP—chemical producers are still vital players in the national economy, and the U.S. chemical industry is simply too important to be allowed to fail.

The President’s Council of Advisors on Science & Technology (PCAST) advises the President and the Executive Office of the President and is called upon to make policy recommendations in areas of science, technology, and innovation with the aim of strengthening the U.S. economy. Similarly, the National Science Board (NSB) is charged with advising the President and developing policy for and overseeing the National Science Foundation.

Unfortunately, PCAST and NSB have negligible representation from the manufacturing sector in general and the chemical industry in particular. Without their input, PCAST is missing important ideas on how government and industry can work together to create new manufacturing jobs to sustain the U.S. economy. Chemical industry representation on NSB could help NSF structure effective university-industry collaborations and improve the efficiency with which research is transformed into innovative products.

The chemical sector is a high-technology industry and is a key enabler of many other U.S. industries. It provides chemicals and materials for microelectronics, aerospace, pharmaceutical, and automobile manufacturers. Its products are essential for housing, agriculture, health, and energy. The chemical industry provides suppliers with infrastructure and processing know-how that result in the creation of new products for addressing global challenges such as sustainable energy production, effective and efficient delivery of health care, and clean water.

The federal government—through NSF, the Department of Energy, the National Institutes of Health’s Institute of General Medical Sciences, and the Department of Defense—provides about $1 billion per year for research and development in chemical sciences and engineering. This investment stimulates an additional $5 billion annual investment in research and development by the chemical industry in the U.S. Using this modest federal R&D investment, the chemical industry generates operating income of $10 billion and, in the general economy, is responsible for 600,000 jobs, a $40 billion increase in GDP, and $8 billion in new tax revenues per year.

Key partnerships can help ensure the vitality of chemical producers as they remake themselves for the coming decades by moving from commodities to specialty and fine chemicals and materials, all while incorporating greener manufacturing techniques. The chemical industry is important to all of us and deserves a place at the table. We need to act now by starting a national dialogue among industrial and government leaders to ensure our industry’s vitality and competitiveness far into the future. Representation on PCAST and NSB would be a good start and would help initiate a dialogue among industrial and government leaders. They must work together to promote new means to accelerate innovation and keep the U.S. chemical industry competitive in the global marketplace.

Views expressed on this page are those of the author and not necessarily those of ACS.



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