A new paper by the Brookings Institute outlines why a healthy made-in-America manufacturing sector is a vital component of the nation’s economy; what type of manufacturing industries matter the most and the key areas that needed to be strengthened to build high-wage and exportable products.

Manufacturing matters to the United States because it provides high-wage jobs, commercial innovation (the nation’s largest source), a key to trade deficit reduction, and a disproportionately large contribution to environmental sustainability.

The paper—Why Does Manufacturing Matter? Which Manufacturing Matters?— also says that the key segments of made-in-America manufacturing that are best suited to meeting those goals are computers and electronics, chemicals (including pharmaceuticals), transportation equipment (including aerospace and motor vehicles and parts), and machinery are especially important.

While U.S. manufacturing performs well compared to the rest of the U.S. economy, it performs poorly compared to manufacturing in other high-wage countries. American manufacturing needs strengthening in four key areas: research and development; lifelong training of workers at all levels; improved access to finance;and an increased role for workers and communities in creating and sharing in the gains from innovative manufacturing

The paper also calls for public policies that promote high-road production; that are geared to entire economy, specific industries and individual manufacturers, and:

Encourage workers, employers, unions, and government to share responsibility for improving the nation’s manufacturing base and to share in the gains from such improvements.

Click here for the full paper by Susan Helper, Carlton Professor of Economics, Case Western Reserve University; Timothy Krueger, Research Assistant, Policy Matters Ohio; and Howard Wial, Fellow, Metropolitan Policy Program, The Brookings Institution