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Innovating to Reclaim American Manufacturing

Despite the end of the Great Recession two years ago, a record high stock market, and 10.9 percent growth in the housing market over the same time last year, US unemployment still hovered at 7.5 percent in April 2013. That statistic poses a long-term threat to an economy whose prosperity rests on consumer spending.

Unlike previous recessions, this time rising employment has not been a main factor driving the return to prosperity. What is it that made this recovery so different, so prolonged, and so painful? More than anything else, it was the trend of shipping manufacturing jobs overseas. It began in heavy industries such as shipbuilding and steel shortly after World War II and hit the high-tech industries in the 1990s. This trend had clear immediate benefits for both American companies and consumers, but the recent recession has highlighted the long-term weakness it creates in the US economy.

If a strong manufacturing sector is required for a robust US economy, how do we renovate that sector after it has been nearly sucked dry by 50 years of outsourcing manufacturing overseas?

The answer lies in the innovative use of automation — the same thing that made this country a manufacturing powerhouse originally. Innovations such as the use of interchangeable parts and assembly-line production helped turn this country into a manufacturing giant starting in the mid-19th century. Those concepts enabled Henry Ford to transform the automobile from a rich man's toy into the common man's preferred mode of transportation. It was American innovation that produced the transistor and the computer, spawning the high-tech industry, and it was American innovation that developed the Internet, radically changing global communication.

In the future, innovation, especially through automation, will be key to ensuring that American manufacturing becomes and remains competitive with the nations that currently dominate manufacturing. American manufacturing lines of the future will use few online operators but will need skilled technicians to keep manufacturing tools operating with minimal downtime. Skilled engineers will be needed to design and build the next generation of tools.

In such a scenario, automation does not translate into fewer manufacturing jobs — rather the opposite. An increase in companies moving manufacturing back to the US would foster development of a robust manufacturing infrastructure, including businesses manufacturing the capital equipment, parts, and components needed by the facilities producing finished goods. That infrastructure could leverage innovative approaches to automation to make American manufacturing even more competitive.

Unlike today's economy, where most jobs are now in the low-paying service sector, such an approach to increasingly automated manufacturing would generate significant growth in the number of technical and highly skilled jobs offering much higher rates of pay. That would result in an infusion of capital into the economy. This infusion would help generate additional jobs in a variety of markets, such as housing, automobiles, and consumer goods, to meet the demands of employees in the revitalized manufacturing sector.

In order to make this a reality, manufacturing equipment produced in the US must be competitive with that produced overseas. There needs to be a reasonable return on investment — ideally one to two years. Finally, newly developed technologies must be proven for large-scale implementation before they are deployed.

Automation doesn't take away jobs. As my company has found in 20 years of automating manufacturing processes for high-tech industries, it helps create jobs. Those new jobs will be a key factor in any US economic renaissance.

8 comments on “Innovating to Reclaim American Manufacturing

  1. _hm
    October 9, 2013

    Innovation can give tools to bring back manufacturing jobs. But it also needs many more efforts from people beifiting from this. e.g. no union, not expecing $100K+ salary for for doing normal assembly work (auto manufacturing) etc. If this is not followed, this can be consider as long term correction and manufacturing jobs will stay away.

     

     

  2. Daniel
    October 10, 2013

    “In order to make this a reality, manufacturing equipment produced in the US must be competitive with that produced overseas.”

    Mark, for long term run that's very important. Competition is high and without innovation, they cannot sustain for along term.

  3. Daniel
    October 10, 2013

    “Innovation can give tools to bring back manufacturing jobs. But it also needs many more efforts from people beifiting from this. e.g. no union, not expecing $100K+ salary for for doing normal assembly work (auto manufacturing) etc. If this is not followed, this can be consider as long term correction and manufacturing jobs will stay away.”

    HM, innovation is a part of inventing technology. I think mass production can create more job opportunities and will help to address the unemployment issue.

  4. prabhakar_deosthali
    October 11, 2013

    In my opinion, the solution to reduce unemployment is not just bringing  the manufacturing back  or having innovative manufacturing methods.

    If the unemployment has to reduce then more and more people oriented jobs need to be created.

    Mahatma Gandhi understood this concept very well when he encouraged the growth of cottage industries in the villages of India where 80% of the Indian population lived.

    By having more automation, no doubt more jobs are created but they are for skilled work-force . The majority of unemployed people are from the lower strata of the society who need simple jobs.

    So along with automation there is a need to train this workforce to bring them upto the required skill level.

  5. Susan Fourtané
    October 12, 2013

    Prabhakar, 

    “Mahatma Gandhi understood this concept very well when he encouraged the growth of cottage industries in the villages of India where 80% of the Indian population lived.”

    If only people around the world would study Gandhi's life, at least read “My Experiements with Truth”, they could solve many problems they are facing today. He was a great, true leader in all senses, and one of the very few people in history I admire. 

    -Susan

  6. FLYINGSCOT
    October 12, 2013

    The main aim is to reduce unemployment levels throughout the US. This article suggests towards returning the US manufacturing market back to the way it used to be. This boost of the manufacturing market requires a skilled workforce however the majortity of unemployed workers will lack the abilities required for these jobs. This approach will cost a lot of money to set up when it may be easier to set up smaller, simpler jobs with a “less demanding” ability of work. This will lead to a decrease in unemployment and a minor boost in the US economy. Ghandi is the man. 

  7. _hm
    October 13, 2013

    @Susan: Best way to revere and venerate Mahatma Gandhi is to follow him in everyday life. This is should be done by all. I am able to do it ~50%.

     

  8. Susan Fourtané
    October 13, 2013

    _hm, 

    That's wonderful. I do as much as I can. I follow his Satyagraha, and non-violence principles. 

    -Susan

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