New-Era Manufacturing and the Jobs War

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New-Era Manufacturing and the Jobs War

In the turbulent years ahead, the economic winners will be those countries, companies, and people that can deliver what markets really want, the way they want it, and at the most affordable price

The time-tested disciplines of market leaders will continue to prevail, but on a global scale.  These are:  operational effectiveness, differentiation, and customer focus. While value will continue to be created by both services and manufacturing, it will increasingly come in the form of bundles containing both. 

As discussed in the March 2012 issue of Trends, between 1950 and 2010 the U.S. economy shifted from manufacturing to services en masse, largely ignoring the interdependency between innovation and production.1 

Initially, this “off-shoring strategy” delivered a solid return on investment (ROI).  But more recently, companies have experienced the considerable downside of over-stressed supply chains, pilfered intellectual property, and poor cross-cultural communications.  Those problems are becoming even more apparent as manufacturing shifts to advanced technologies and shortened product life-cycles where real-time interaction between R&D, manufacturing, and customer-facing service offerings can be crucial.

In the context of the jobs war, this has significant implications for decision makers at all levels.  Winning will require companies to invest in the right equipment, intellectual property, and human resources to compete in an entirely new era of product-service technology based on infotech, biotech, and nanotech.  Making this leap will require a more flexible, highly skilled, and customer-focused workforce delivering product-service bundles to customers quickly and cheaply.

To date, because of America’s inability to deliver on this mandate, our trade deficit is nearly $600 billion a year.2  When those dollars leave the country and don’t come back to purchase U.S. exports, it’s a lost battle in the jobs war.  To put this into meaningful terms, it’s estimated that simply eliminating the trade deficit would increase U.S. GDP by $1 trillion a year, and create 10 million new jobs.

The shift to what the Trends editors call “new-era” manufacturing will be a major factor in reversing the flow.  Competing with China’s low wages in labor-intensive activities is not an option.  Some of those activities will be carried out here, but it will be because of their need to be co-located either with high-tech new-era manufacturing or with customer-related services...

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