A lot of ink has been spilled the past few years about America’s manufacturing decline. But according to an article in the Atlantic on a report from a Washington think tank, the manufacturing industry is actually in pretty good shape – and it’s poised to take off. In fact, the article is called “America’s Coming Manufacturing Revolution.”
“Contrary to conventional wisdom, manufacturing has not lost ground in terms of its importance in the U.S. economy,” writes contributing editor Moisés Naím (@MoisesNaim). Instead, “for the past 50 years, industrial production in the U.S. has grown at the same rate or even faster than the economy as a whole.” He draws his information from “US Manufacturing: Understanding Its Past and Its Potential Future,” written by two senior fellows from the Brookings Institution.
What has given the mistaken impression that manufacturing is in decline? Because the industry is growing increasingly more efficient, generating more goods while requiring fewer people to make them, Naím writes, noting that the U.S. lost 5.7 million manufacturing jobs between 2000 and 2010.
Similarly, people point to the trade deficit as an example of American manufacturing in decline, but that is only true for the Asian region, Naím writes. Everywhere else, the U.S. exports more than it imports.
Moreover, revolutions in energy, robotics, materials, and information technology offer the potential for the manufacturing industry to explode, Naím writes. Developments such as shale oil and fracking will reduce energy costs, while robotics will continue the process of being able to produce more goods with fewer people. (This doesn’t solve the problem of the loss of manufacturing sector jobs, he admits.)
Materials such as carbon nanotubes and graphene will enable the manufacturing sector to create a whole new class of small, light, sturdy items that can be used in nanotechnology. Finally, the manufacturing industry will start taking lessons from information technology and become more computer-aware through technologies such as 3D printing and the “Internet of Things,” or devices that can communicate with each other without human intervention.
“Companies like General Electric are already relocating operations from Asia to Silicon Valley to take advantage of the proximity to information-technologies clusters,” Naím writes. “And they’ll reap great savings in transport costs from Asia in addition to benefiting from lowered energy costs at home.”
The Brookings report does warn that the U.S. needs to improve its infrastructure and education for manufacturing to continue to be successful. It’s no surprise that education is an area for improvement. We hear time and time again from small business manufacturers that finding skilled workers is a huge challenge. The good news is that manufacturing in the U.S. is not declining, and hasn’t been for some time now. It appears that what’s needed is a stronger commitment to improving our infrastructure and education in manufacturing, and it could be smooth sailing from here on out.
Steve Leavitt, GM of U.S. Cloud Solutions for Exact