Why is manufacturing so important?



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In  the book In Praise of Hard Industries: Why Manufacturing, Not the Information Economy, Is the Key to Future Prosperity, three points are highlighted. Do you agree with them? How have you innovated in manufacturing?


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1. Jobs. Manufacturing creates a much better mix of jobs than advanced services — jobs for everyone from ordinary blue collar workers to capable  engineers, brilliant scientists, and resourceful and far-sighted top managers.

2. Wages. Those who in the 1970s began dismissing America’s manufacturing base as the “Rust Belt” displayed deep ignorance of modern First World manufacturing. Such manufacturing has long been highly capital-intensive, which means that each worker’s productivity is greatly leveraged by sophisticated production machinery. This creates plenty of room for employers to pay high wages. Advanced manufacturers moreover require great accumulations of secret production know-how – typically know-how acquired over generations of “learning by doing” – and this powerfully shields them from low-wage foreign competition.

3. Exports. I have calculated that, per unit of output, manufacturing businesses are nearly ten times stronger exporters on average than services. Thus America’s investment in postindustrial activities (such as computer software, internet development, finance, and legal services) cannot  hope to bridge the trade gap opened up by the decline of manufacturing. One reason for manufacturing’s superior export prowess is that manufactured products generally require little adaptation to sell around the world. By contrast services have either to be performed in a customer’s home country or at least – in the case of computer software, for instance – have to be expensively adapted to meet different cultural needs in different  foreign markets. Thus the net receipts transmitted back to the United States are often minimal.



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Manufacturing sectors


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  • Food And Kindred Products
  • Tobacco Products
  • Textile Mill Products
  • Apparel And Other Finished Products Made From Fabrics And Similar Materials
  • Lumber And Wood Products, Except Furniture
  • Furniture And Fixtures
  • Paper And Allied Products
  • Printing, Publishing, And Allied Industries
  • Chemicals And Allied Products
  • Petroleum Refining And Related Industries
  • Rubber And Miscellaneous Plastics Products
  • Leather And Leather Products
  • Stone, Clay, Glass, And Concrete Products
  • Primary Metal Industries
  • Fabricated Metal Products, Except Machinery And Transportation Equipment
  • Industrial And Commercial Machinery And Computer Equipment
  • Electronic And Other Electrical Equipment And Components, Except Computer
  • Equipment
  • Transportation Equipment
  • Measuring, Analyzing, And Controlling Instruments; Photographic, Medical And
  • Optical Goods; Watches And Clocks
  • Miscellaneous Manufacturing Industries