Last night, President Obama delivered his annual State of the Union address to the US Congress – striking an optimistic but ‘policy-light’ tone in what will be his final year in office.

Back in 2014, I blogged in a similar vein on Obama’s 2014 State of the Union, highlighting his particular focus on tax, small business and innovation, and what lessons the UK could take. Despite Obama’s address being light on specific proposals, there were a number of broad themes which he used in an attempt to define the US’s future economic and social direction.

But how do these themes relate to the UK’s future industrial vision, and what can ADS’ sectors glean from them?

Manufacturing as an Economic Cornerstone

“Manufacturing has created nearly 900,000 new jobs in the past six years….”

“We’ve launched next-generation manufacturing hubs, and online tools that give an entrepreneur everything he or she needs to start a business in a single day.”

The President focused on the success of the US manufacturing industry as a key enabler to the increase in employment over the past 6 years – highlighting the creation of manufacturing hubs to position the US for future job and growth creation. (With 2016 being an election year, the emphasis on the future success or failure of manufacturing is only likely to continue!)

This focus comes at a time when we are seeing more and more a trend of global investors gradually shifting capital back to the US (due to higher than previous wage costs and slowing growth in many developing nations). This will mean the US manufacturing industry will be more able to leverage improved levels of investment through schemes such as SelectUSA (the 1st Federal government-wide investment-promotion program) and seek to boost growth.

This trend and overall manufacturing focus in the US, means it is perhaps now more critical than ever to demonstrate why the UK is an attractive place for global investment. Continuing to ensure the tax and R&D environment is favourable is important, but doing more to get global companies to invest in plant machinery as global demand increases for the products our industry provides, will also be vital.

In a similar vein to the US manufacturing hubs, centres like the High Value Manufacturing Catapult here in the UK are already going a long way in demonstrating this commitment to industries such as Aerospace and Space – but also ensuring that innovation is central to boosting the economic contribution of manufacturing.

The Spirit of Innovation

“…how do we reignite that spirit of innovation to meet our biggest challenges?”

“That spirit of discovery is in our DNA… we’re the Wright Brothers”

The role of innovation permeated throughout Obama’s speech – from how to tackle climate change, cure cancer, and improve the day to day lives of ordinary citizens. His rhetoric also focused on igniting the passion for innovation and discovery across the country to solve problems – even citing Aviation pioneers the Wright brothers.

In our sectors, innovation is seen as keen to meeting a variety of important challenges – whether this is for our armed forces, the secure critical infrastructure, or meets the demand of large numbers of commercial aircraft orders. Innovation, particularly digital technology, will also be critical to maintaining our high productivity levels, and both competing and collaborating with nations such as the US.

Alongside the practical means of fostering innovation, the UK must also re-engage with our passion and spirit for discovery. The UK has been at the forefront of some of the most important discoveries in our sectors – we invented the tank, the radar, the jet engine. With the need for our sectors to compete with other professions and industries, getting more young people to study STEM subjects at an early age by highlighting pioneering discoveries, are critical pieces of the skills and innovation puzzle that will ensure the UK competes and solves future challenges.