Our ability to field competitive domestic
manufacturing industries is deteriorating, says one economist, and too
few understand the implications for the U.S. economy.
The world is upping its game for manufacturing superiority. Many are content to see basic industries leave the United States, assuming that there is an inevitable evolution in a developed economy toward high-tech industries. They see the drop in manufacturing employment over the past decade as a necessary byproduct of globalization and increased efficiency. The answer is to pursue new manufacturing opportunities such as electric cars and wind turbines, and to focus on the service sector.
But as National Institute for Standards and Technology (NIST) economist Gregory Tassey argues in his provocative analysis of the United States' competitive status in manufacturing, the nation must see manufacturing as a series of complex supply chains rather than individual industries and dramatically change its policies to encourage research and development.
Tassey makes a compelling case in "Rationales and Mechanisms for Revitalizing U.S. Manufacturing R&D Strategies" that the U.S. economy's future depends on a strong manufacturing sector. He notes that "the high-income economy must be the high-tech economy" and that manufacturing is a necessary element, as it supports 70% of industry R&D spending. He also points out "the majority of trade is still in products," and the United States cannot fix its huge trade deficit by relying on services. Moreover, he says international competitors are targeting high-tech services. With the advent of the Web, many of these services can be provided from Bangalore as easily as from Boston.
To read the full, original article click on this link: IndustryWeek : First Up -- The Case for Investing in Manufacturing
Author: Steve Minter
