Fascinating cover story in Time magazine about the renaissance in US Manufacturing.

What is so interesting about this is while new businesses are being created, the amount and kinds of jobs that go with this are very different than what the manufacturing sector produced in the past.

Some takeaways from the article:

• Post-recession, U.S. manufacturing growth is outpacing other advanced nations;

• 500,000 manufacturing jobs created in the USA over the past three years;

• U.S. factories access to cheap energy, (oil and gas from the shale boom) means cheaper costs versus expensive overseas Oil and costly shipping prices.

• Energy- and resource-intensive industries (chemicals, wood products, heavy machinery and appliances) do better, powered by that cheaper homegrown energy.

• New made-in-America economics is centered largely on cutting-edge technologies (3D printing, specialized metals, robotics and bioengineering);

• New US factories are “superautomated” and heavily roboticized;

• Employees typically are required to have computer skills and specialized training; Minimum of two-year tech degree, which is likely to rise to four-year degree (eventually);

More machines and fewer workers is the future of manufacturing in the USA. But looking only at factories misses some of the new jobs that are related to these industries. Many of the jobs created are outside the factory floors — R&D, support services, software engineers, data scientists, user-experience designers, transportation & shipping, etc.

Perhaps this helps to explain why every $1 of manufacturing activity returns $1.48 to the economy.

Here is an excerpt:

“Today’s U.S. factories aren’t the noisy places where your grandfather knocked in four bolts a minute for eight hours a day. Dungarees and lunch pails are out; computer skills and specialized training are in, since the new made-in-America economics is centered largely on cutting-edge technologies. The trick for U.S. companies is to develop new manufacturing techniques ahead of global competitors and then use them to produce goods more efficiently on superautomated factory floors. These factories of the future have more machines and fewer workers—and those workers must be able to master the machines. Many new manufacturing jobs require at least a two-year tech degree to complement artisan skills such as welding and milling. The bar will only get higher. Some experts believe it won’t be too long before employers expect a four-year degree—a job qualification that will eventually be required in many other places around the world too.

Understanding this new look is critical if the U.S. wants to nurture manufacturing and grow jobs. There are implications for educators (who must ensure that future workers have the right skills) as well as policy­makers (who may have to set new educational standards). “Manufacturing is coming back, but it’s evolving into a very different type of animal than the one most people recognize today,” says James Manyika, a director at McKinsey Global Institute who specializes in global high tech. “We’re going to see new jobs, but nowhere near the number some people expect, especially in the short term.”

If the U.S. can get this right, though, the payoff will be tremendous. Labor statistics actually shortchange the importance of manufacturing because they mainly count jobs inside factories, and related positions in, say, Ford’s marketing department or at small businesses doing industrial design or creating software for big exporters don’t get tallied. Yet those jobs wouldn’t exist but for the big factories. The official figure for U.S. manufacturing employment, 9%, belies the importance of the sector for the overall economy. Manufacturing represents a whopping 67% of private-sector R&D spending as well as 30% of the country’s productivity growth. Every $1 of manufacturing activity returns $1.48 to the economy. “The ability to make things is fundamental to the ability to innovate things over the long term,” says Willy Shih, a Harvard Business School professor and co-author of Producing Prosperity: Why America Needs a Manufacturing Renaissance. “When you give up making products, you lose a lot of the added value.” In other words, what you make makes you.”

The full article is well worth your time to read . . .

 

Source:
Made in the USA
Rana Foroohar and Bill Saporito
Time, April 2013   
http://business.time.com/2013/04/11/how-made-in-the-usa-is-making-a-comeback/

Category: Economy, Employment, Technology

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

14 Responses to “Manufacturing Returns to USA (Jobs Not So Much)”

  1. call me ahab says:

    From the article:

    “With consumers no longer prepared to borrow and spend with wild abandon, the government was forced to leverage itself up instead. In doing so, the credit risk has shifted from the private to the public sector.The Debt Supercycle has moved into its final inning, with government debt soaring dramatically in the past few years. . .Since 1981, the U.S. increased its sovereign debt by 1,560% while its population increased by only 35%.

    In the end- we are where we are based on levering up (and something just doesn’t feel right about it)
    I can here all the Keynesian blah . .blah . .blah- but unfortunately, the Fed can only do one thing- throw money out there and keep its fingers crossed

  2. Lee Adler says:

    A different perspective

    Factory Data Shows US Manufacturing Dead In The Water As Headlines Mislead http://wp.me/p2r1d8-Dex

  3. Greg0658 says:

    raw capitalism is preditory
    we have reached the spot where population does NOT add to productive consumption
    population draws down precious commodities thus increase’g commodity worth
    population in general (speaking of shallow IQs) do not value add any longer
    end of story – there – a blip of space & electricity consumption for growth
    this is our world now – entertain me – next blip

  4. spencer says:

    How can you have any confidence in an article that starts with a statement that is completely wrong.

    Since the recession US industrial production is not growing faster than world output.

    WORLD INDUSTRIAL PRODUCTION DATA

    INDEX AVERAGE AVERAGE
    (2000=100) ANNUAL ANNUAL
    WEIGHTS GROWTH GROWTH
    (2000= 100) JAN 1991 JAN 2008 JAN 2012 1991-2008 2008-2012

    World (production weights) 100.0 75.3 134.7 146.2 4.6 2.1
    Advanced Economies (a) 65.1 81.0 110.2 101.5 2.1 -2.0
    United States 21.7 66.1 109.1 104.3 3.8 -1.1
    Japan 11.6 101.5 111.2 97.3 0.6 -3.1
    Euro Area 20.2 87.8 115.8 105.0 1.9 -2.3
    Emerging Economies 34.9 64.5 180.8 230.8 10.6 6.9
    Asia 17.0 42.7 230.6 333.1 25.9 11.1
    Central and Eastern Europe 5.0 104.1 162.7 166.5 3.3 0.6
    Latin America 6.4 76.0 130.0 131.4 4.2 0.3
    Africa and Middle East 6.5 78.2 118.1 117.7 3.0 -0.1

    (a) OECD excluding Turkey, Mexico, Korea and Central European countries.

  5. antonw says:

    I’m interested in this comment. “Minimum of two-year tech degree, which is likely to rise to four-year degree (eventually);” Upon what is this based? Four years means an engineering degree. Will the added knowledge possessed lead to an increase in the marginal revenue product of the worker and higher pay?
    Or will public opinion just keep students in school longer, and workers who stayed in school longer earn the same salary as the two year people? Our added supply of collge graduates has just lowered the earning of college gradates except for the super stars!

  6. [...] Manufacturing Returns to USA (Jobs Not So Much) looks at a Time magazine article that talks about how manufacturing is returning to the US, but in a different form with different job skills needed. A two year tech degree is now the minimum education for most of these new jobs, a half million of them in the last three years. This entry was posted in Fundamentals, Happy Days. Bookmark the permalink. ← If You Don’t Have a Vote, You Aren’t an Owner [...]

  7. S Brennan says:

    Dunno BR,

    I think this article is dubious, or at least conjecture. Proof? Go to:

    http://w3.unece.org/pxweb/dialog/varval.asp?ma=0_MECCIndProdY_r&path=../database/STAT/20-ME/5-MEPW/&lang=1&ti=Industrial+Production+by+Country+and+Year

    Which is UNECE Statistical Database, compiled from national and international (CIS, EUROSTAT, IMF, OECD) official sources.

    Select – Industrial Production index, growth rate for years 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 & you should get something like this

    2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
    Canada 0.1 1.6 2.0 -0.6 -0.8 -2.9 -10.8 4.9 3.7 ..
    France -1.2 2.1 -0.1 0.5 1.3 -2.5 -13.1 5.1 1.7 ..
    Germany 0.5 4.2 3.0 5.3 5.8 0.6 -16.4 11.2 7.4 ..
    Spain 1.5 2.0 0.2 3.7 2.4 -7.1 -16.2 0.9 -1.8 ..
    Sweden 1.5 5.7 2.5 3.1 3.4 -2.6 -18.0 9.4 5.9 ..
    Turkey 8.7 9.8 5.6 7.3 7.0 -0.6 -9.9 13.1 8.9 ..
    USA 1.2 2.3 3.3 2.2 2.5 -3.5 -11.4 5.4 4.1 3.6

    Hardly a “Renaissance” to me, seems more like lame recovery that is sputtering?

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  12. gsc01972 says:

    This articles is supporting the idea of automation of factories and its good for the U.S…Hmm.. this is the most ridiculous myopic article i have read..Taking the factory workers out of the equation of factory work is crazy…Replacing them with automated machines…stupid!! More profits for the owners but bad for the economy. Remember factory worker or blue collar workers get a paycheck. buy crap that were made by other factory workers…and everyone stays in business..Less workers equals No paycheck equals no spending or collection on I.R.S+state+local tax revenues..You guys are killing this country very slowly. “Some experts believe it won’t be too long before employers expect a four-year degree” People coming out of collage can’t find a job in high tech fields..but high tech factory worker making $29 hr but minus $11hr to pay off 4yr collage makes a lot of sense..You Still making $19 per hour..