Here is an iChallenge for the iPeople who are developing the telecommunications wonders we have today. You designers of the Kindle, Nook, iPhone, iPad, iWidget, and all of the variants spreading away from the core technology. I know you are clever and hard working people. There is no doubt.
What about developing or just relocating manufacturing processes that can be run in the USA? Shouldn’t the fabrication technology be lined out and automated to the point where it can be operated nearly anywhere? One of the things that the advance of technology brings is reduced headcount per unit of production. How do we justify off-shoring manufacturing that is highly automated? What is the advantage if inexpensive labor is not needed? It must be something else.
If taxes are the issue, then let’s look at the numbers. Quit the handwaving. We need a company like Apple to pony up some actual numbers. Make your case like you did in B-school. Manufacturing doesn’t have to start up in the expensive SF Bay area. Plants can be built anywhere the public infrastructure already supplies utilities and transportation. Could it be that many of the arguments for off-shore manufacturing are related to a deficit in imagination rather than rigorous calculation?
And to the iConsumers out there. By demanding these wonderphones, you are only making the trade deficit worse. Public corporations are people, or so the thinking goes. What is with these people? Do they not have any sense of loyalty? Are they even trying to manufacture in the USA anymore?
Lamentations on Chemistry 
“How do we justify off-shoring manufacturing that is highly automated?”
I think that’s the point. It’s not highly automated, or only portions of it are. Foxconn City isn’t full of robots, it’s full of motivated people who will do good skilled electronics manufacturing for cheap.
I honestly do not understand the dimensions of off-shoring manufacturing. I know that some product assembly is labor intensive. Other plants, like FAB’s, may not be labor driven. I believe there should be some discussion and greater transparency in how the decision to off-shore is made. It is hard (for me) to believe that some more substantial fraction of eletronic manufacture couldn’t be done in the USA. We cannot continue to develop technology concepts in the USA and manufacture abroad.
Yeah, those of us in NAICS 325 are keenly aware of our international competition. If you’re an insurance salesman, though (an honorable trade, to be sure), you don’t think about that sort of thing…
My understanding is that as a percentage of GDP, U.S. manufacturing has held steady, but employment in that area has dropped due to automation/efficiency. So automation is held in the U.S. but people are being displaced by automation at home and labor abroad.
See here: http://www.heritage.org/research/reports/2010/10/technology-explains-drop-in-manufacturing-jobs
Chemistry seems to be a good example, incredible amounts of automation (auto-samplers, fraction collectors, controllers, etc.) while experiencing simultaneous competition from cheap labor abroad. That kind of automation seems trivial, but it greatly increases the amount of time a single scientist can spend on a problem, competing with other scientists who would like to do that thinking and fraction collecting.
Even if China were not competing, employment would be down in the U.S. As scientists and engineers solve more problems, the need for physical labor in these areas naturally goes down. The need to manage the information, organize finances and provide specialized services has increased to compensate. But our strange attachment to “keeping manufacturing jobs in the good ol’ USA” seems to be keeping us from realizing where Americans could be useful.
It’s time to dump this old thinking, it’s getting us nowhere fast.
Thanks for the thoughtful comment. I’ll agree that automation and mechanization has had a large effect on efficiency and the need for manpower. This has been true since the introduction of steam power. But I’ll disagree with the notion that the need to manage information, organize finances, and provide services is the inevitable answer. Manufacturing could be described as a natural cultural activity. Information management, finances, and some kinds of services are activities for the top of the “economic food chain”. Our culture still needs compost, asphalt, radiator hoses, auto repair, backhoe drivers, nails, light bulbs, people who install heating and cooling equipment, miners, and on and on. Finance at best is a small part of the workforce.
I think it is in the nature of highly educated people to believe that the whole population aspires to participate their kind of intellectual life. I’m having trouble believing that the move to information technology and services is actually compensating for the loss of manufacturing jobs. Economics is something that cultures do.
Economics isn’t just math- it’s also anthropology. It’s easy to talk about jobs in the abstract. Having been dumped on the street in a layoff in 1998, I can no longer be so cool about it. It is still fresh in my mind.
You said-
“It’s time to dump this old thinking, it’s getting us nowhere fast.”
This kind of triumphalism becomes narcotic and leads to dot.com and real estate bubbles. It causes Pfizer to exit the drug discovery business and export their magic to India and Asia. It causes corporate directors to move whole industries out of the country. It is a ready, fire, aim! strategy in the hands of short term thinkers who are in abundance.
Have you ever tried to drive your car down the road while only looking at the line on the shoulder to your left? It’s hard to drive in a straight line, isn’t it? And it is considerably more work. This is a close coupled feedback loop that tends toward instability. Any engineer versed in control systems will tell you that you need dampened feedback for stable control. We shouldn’t run civilization under close coupled feedback. A stable civilization has a broad diversity of industries. The USA did not lapse into a depression in 2008 for this reason.
I have to get to work. Ciao.