Concern Mounts About U.S. Manufacturing Leadership

A recent series by Industry Week Magazine raises some vitally important questions about the future of manufacturing in America. Here are a few excerpts.

The fast entry of China into manufacturing, and especially into the semiconductor industry -- and China's aggressive strategy to encourage manufacturing growth -- has renewed the debate: Are U.S. businesses and the government doing enough to retain leadership in manufacturing innovation? This is a very important issue for many local economies across America that depend upon manufacturing both directly and indirectly.

Reports from the National Association of Manufacturers (NAM) and the National Coalition for Advanced Manufacturing (NACFAM), both in Washington, D.C., suggest earlier fears were well-founded. These reports say that U.S. leadership in several critical industries is falling along with market share, and high-skilled jobs and innovative research are now following production jobs. Further, the reports highlight that stakes are higher this time, with the entrance of China.

The NACFAM report, for example, notes that while Japanese, Taiwanese and South Korean wages rose as those countries developed, the sheer size of China's population means its labor surplus, and thus low wages, will put pressure on U.S. manufacturers for a long time to come.

Three key questions need to be answered according to experts:

· Can U.S. companies retain high-technology manufacturing preeminence without maintaining strong U.S. ties to both R&D and production?

· Can U.S. companies justify and retain U.S. production capacity in spite of startling disparities in global wages?

· What, if anything, should the U.S. government do to ensure an innovative manufacturing economy remains strong in the U.S.?

I recommend reading the IW series if manufacturing is even remotely important to your area economy. Go here for the details.