Don't count the USA out yet.

Don’t count “made in USA” out yet.

Dave Kinnear1-On Leadership

It seems that manufactoring in the U.S.A. may not be such a bad thing after all. The Economist, Moving back to America, pulled together some interesting data that indicates all countries may well be looking to build factories to meet market demands, not to re-import “back home.”

One has to wonder why this is such a “surprise” and so newsworthy. I guess it’s because we are looking for good news, ANY good news to give us some hope that the country’s economy is truly on a sustainable upward trend. Back when we were belly-aching about the auto industry losing its edge, there was a lot of discussion about how the foreign auto manufacturers seemed to be doing just fine using American labor and manufacturing right here in the good ol’ U.S. of A. So as labor costs increase in the developing economies and the cost of transportation continues to increase, we are sure to see movement of manufacturing to be closer to the markets served. The US won’t be left out of this continuing trend.

While manufacturing may still continue to lose jobs to productivity increases and may also find some industries just simply won’t be able to compete with manufacturing offshore, the trend to losing jobs to off-shoring should decline. However, it is doubtful, to say the least, that the U.S. will ever go back to being a premier manufacturer. What concerns me most is not the continued erosion (if you’re a pessimist), nor the slightly improved trend to competitive manufacturing (if you’re an optimist). What bothers me is that we are not investing in the education of scientists, mathematicians and engineers. Nor are we willing, it seems, to guide young people who will not attend college to solid careers in a trade. It will forever frustrate me that consumers will pay huge contracts to sports celebrities (read Moneyball to figure out how illogical we are about that market) who arguably do not contribute to anything except the advertising industry, consumers and shareholders allow outrageously large pay and bonuses to poorly performing CEOs and taxpayers agree to move tax dollars into providing cushy jobs , health care and retirement packages for politicians and public employees while ignoring investment in the very things that will make our economy thrive now and in the future. The good news is we live in a country where we can all choose to do these things. The bad news, in my mind, is that we as a society do choose to do them – or allow them to happen!

The loss of manufacturing is to me a red-herring. The real issue is much larger. What will America do to play in the world economy? What are we doing now to make sure we are ready to assume that place and compete successfully? Our multi-national companies will figure out the best way to manufacture. They will figure out how to minimize the impact of earthquakes and tsunamis on their supply chains.

Feel free to leave a comment on how you see our country surviving in the global economy. Since the global economy isn’t going to go away we can’t set up trade barriers to protect our companies. If we cannot “unilaterally” play in the global market, then what do we do to make sure we add value?