With their spectacular reported financial results, it should be no surprise that energy companies dominate this year's IW U.S. 500 and IW 50 Best Manufacturing Companies lists. But this mature industry's strong showing causes me to wonder: What does this tell us about the future of U.S. manufacturing? Weren't high-tech, high-value-added companies supposed to dominate our nation's manufacturing sector from now on? These questions become more critical as you dig down into the lists. While petroleum and coal-products companies accounted for 15 of the IW 50 Best Manufacturing Companies, metals and primary metals companies accounted for seven, followed closely by printing and publishing with six. Where are the pharmaceutical, computer and electronic, and medical equipment companies?
These are trick questions, however, designed to get us thinking about what we think about when we think about manufacturing and its future. Readers of this column know that one of my and IW's missions is to convince business and public policy leaders to think differently about manufacturing -- and to convince manufacturing executives that it's in their best interest to do so as well.
While many in this nation believe that manufacturing is going away -- and even believe it's part of a natural process that it does -- IW views manufacturing as the most dynamic, most innovative, most challenging and most important sector of the global economy. We think differently because we view manufacturing differently. We see changes in manufacturing not as an evolution of the economy up to and away from industrialization, but toward increasingly sophisticated forms of production. Recall the various previous premature declarations of the manufacturing sector's death:
- In the 1980s, the services sector was declared to have overtaken the manufacturing sector in importance. But services didn't overtake manufacturing. Manufacturers embraced services and helped propel that sector's growth.
- In the 1990s, the information technology sector was declared to have overtaken the manufacturing sector in importance. But IT didn't overtake manufacturing. Manufacturers embraced IT.
- Now, in the first decade of a new century, globalization is predicted by some to throw the final knock-out blow to developed economies' manufacturing sectors. But globalization is not, and will not, overtake U.S. manufacturers. They are embracing -- and must embrace -- globalization.
Each of the "new economy" eras has been an opportunity for companies in mature industries to reinvent themselves. The executives leading the energy and metals companies on IW's lists know this and are capitalizing on it. Most notably, they now are benefiting from the vast expansion of the global market for energy and raw materials.
So what do we learn when we see energy and metals companies dominate the IW 50 Best Manufacturing Companies list? We're reminded that today's great manufacturers are also great service and technology companies, because they adapted to earlier changes in the economy. And from the list we learn that now and in the future great manufacturers also must be global companies.
But that's not all. We also learn that those of us who believe in the importance of manufacturing to our nation's economy must press our case with other business and public policy leaders. We must show them that U.S. manufacturing is not going away -- but instead continues to transform itself to remain the driving force of the economy.
Patricia Panchak is IW's editor-in-chief. She is based in Cleveland.