CPA & Business Advisory Blog

President Obama Pledges $500M Investment in Manufacturing Initiatives

President Obama chose Cleveland as a backdrop to announce three new manufacturing initiatives that total $500 million in public/private investments. During yesterday’s visit, the president stressed the role manufacturing plays in the vitality of our economy.

During his comments at the City Club of Cleveland and at a visit to MAGNET, the manufacturing incubator at Cleveland State University, the president announced the three new manufacturing initiatives, one of which is a national competition to build a specialized high-tech research center that merges textiles and fabrics with high technology.

manufacturingThe objective of the competition, which is slated to attract $75 million from federal government with a dollar-for dollar match by the private sector, is to pair university and industry researchers at a single center to produce “technical textiles” with extraordinary properties. The textiles could combine strong flame-resistant and lightweight properties to protect firefighters and military personnel, among other applications.

The technical textile competition is an expansion of the National Network for Manufacturing Innovation program, which started in Youngstown, Ohio. That program brings together industry researchers, government and academia and has proven to be a great success.

It’s no coincidence that the president announced his initiatives in Cleveland—after all, our roots are steeped in manufacturing and distribution, and his visit reemphasized that yesterday. As Obama said in his comments about MAGNET, “This partnership is bringing manufacturing jobs back to Cleveland. If something’s working, why would we want to get rid of it?”

During yesterday’s visit, the president discussed two other manufacturing initiatives:

  • A White House Supply Chain Initiative to help small manufacturers, who employ 42 percent of all workers but sometimes lack the technologies that can help them expand. This initiative was first announced during the president’s State of the Union address.
  • A competition for $158 million in federal investment, with matching private funds, to strengthen the Manufacturing Extension Partnership (MEP) network. The partnership is a state/federal network of 60 centers and 1,200 manufacturing experts that help small manufacturers improve their production processes and technological capabilities. Ohio is among 12 states eligible for the competition.

A MEP expansion could have a great impact on manufacturing businesses in Northeast Ohio as MAGNET, the MEP affiliate in Cleveland, would directly benefit from increased funding. This means more assistance programs to start-up and existing manufacturing businesses.

Where there is investment and expansion in technology, research and development quickly follows; and where there is research and development, there is a R&D tax credit available to qualified businesses. The president’s speech reminds us that there are incentives to invest in your manufacturing or distribution business.

One of those incentives is the Ohio R&D Investment Tax Credit. For more information about tax credits available to manufacturers, or other questions regarding manufacturing, please contact Jon Shoop at 440-605-7107 or jshoop@skodaminotti.com.

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