What is in this article?:
- The Competitive Edge: Myths About Manufacturing
- 2. We're in the midst of a manufacturing renaissance.
"While a U.S. manufacturing renaissance is possible, we're not there yet. In fact, U.S. manufacturing hasn't even fully recovered from the Great Recession and isn't expected to until the 4th quarter of 2014."
Gold: 'We can't afford to continue hemorrhaging our advanced manufacturing capabilities.'
Ten years ago, a list of myths about manufacturing would have started with the humdinger that we no longer make anything in America. But behind the efforts of MAPI, the National Association of Manufacturers, the White House and others, many more Americans are familiar with the continued dynamism of this nation's factory sector. Still, myths abound. Some diminish manufacturing's value; others create unrealistic expectations for the sector. It's important to correct all of them in order to ensure more focused and effective public policies.
Here are three myths that continue to arise in the media:
1. We don't need to actually make anything here to create wealth. A persistent myth is the concept that it doesn't matter where production occurs because America can remain competitive by selling its ideas. Unfortunately, we now have three decades of evidence to rebut this argument.
Some ideas are more valuable than others -- that is, they generate more wealth for society. Such is the case with manufacturing innovation. Manufacturers spend more dollars on R&D than other sectors, and because of the multiplier effect, such activity tends to have a greater impact. When production goes overseas, we lose this innovation because in many cases designers and engineers trail the factories to their new locations in order to more quickly and effectively facilitate process and product changes.
The damage doesn't stop there. Once production is established in a specific locale, a community of designers, suppliers, researchers, investors, and skilled workers develop around it -- what Harvard's Gary Pisano and Willy Shih call an "industrial commons." This facilitates the next generation of innovation in that region. Thus, when the United States outsourced the production of TVs to Asia several decades back, that region gained (and we lost out on) the innovation and production of plasma, LED and liquid crystal displays (LCD) TVs -- and who knows what next. We can't afford to continue hemorrhaging our advanced manufacturing capabilities.