Manufacturing Ain't Dead

Reports of its demise are premature, but in an era of rapid change and shrinking margins, smaller outfits face a new and scary world.

Read this. We need more of the "Joes of this world."

"Manufacturing is dead here," declares the blasé moderator of a Center City forum in Philadelphia called Selling Overseas, where I recently served as a panelist. I was taken aback by her glib assertion, which seems to be the conventional wisdom these days. Venture capitalists and local government officials have jumped on the latest bandwagons, chasing opportunities in biotech and information technology. In so doing, however, they ignore a sector where we still have considerable competitive advantages, not to mention a solid tax base and proven potential for job creation, meaningful work, and long-term community stability.

Of course, not everyone has given up on manufacturing. Joe Houldin, the dedicated CEO of the Delaware Valley Industrial Resource Center (DVIRC), cherishes the memory of his father, a factory worker, "who raised us with a sense of dignity and aspiration." Locally, Joe leads the battle to preserve and develop our local manufacturing base. Funded by the state and federal government to help us become more efficient and competitive, the DVIRC has had considerable success. Indeed, the most recent numbers from the Philly Federal Reserve show continued expansion in the sector.

Joe points to our local heritage as the key to our success. By contrast, he states, "Other parts of the country that build their economies around high-volume manufacturing have been decimated by the shift overseas. Here, we have a tradition of small, specialized niche businesses." He equates our micro-economy to "the colonial era or the beginning of the industrial revolution."

Overall, Joe is optimistic about our prospects. "We're a very high-cost region and we want to stay that way. If we can maintain our high-valued added, low volume, niche businesses, we'll be well positioned," he continues. "If we do things right, we're going to kick butt." But that's a big if. To prosper, we must remain innovative, continue to invest in our operations, attract skilled employees, and target healthy markets. Even with DVIRC support -- itself under threat of government cuts -- any misstep could prove fatal.

Here to read more.