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Manufacturing and the Economy: A Random Sojurn Around the Web


Sometime what comes your way over the Web sets up an eerie kind of resonance.

It started with a link to a review of a BBC show called "Made in Britain" on Works Management, a website dedicated to manufacturing management best practice.

McLarenThe review commented that manufacturing enjoyed "a rare moment in the public spotlight" as the BBC show celebrated the sector's renaissance in England.

Low cost production, the BBC conceded, has been lost to the Far East. But the use of high-tech manufacturing to produce high-value goods is what the UK is banking on. Profiled were pioneering firms such as Brompton Bicycles, McLaren and BAE Systems whose innovative products and production techniques have put them out ahead of their global competitors. (The image above is the McLaren MP4-12C, which had a starring role on the show.)

However, even though these and other British manufacturing exports are generating big profits, the UK is still not producing and selling enough high-value goods to close its trade deficit.

The next link to show up in our inbox led us to a story in the Buffalo News. It took us back across the pond to Washington, DC, where Senator Kirsten E. Gillibrand (D-New York) is calling for a resurgence of manufacturing in the US to shore up this country's flagging fortunes. Gillibrand notes that her home state has lost 123,000 manufacturing jobs since 2005. She is sponsoring a bill that would create "Make it in America" grants to small- and medium-sized manufacturers (SMMs — the "missing middle," often referred to on this website).

In addition, she is pushing for an expansion of the Advanced Energy Manufacturing Tax Credit to include companies conducting clean-energy manufacturing. She also wants to make permanent the New Markets Tax Credit to spur private investment. The Buffalo News article reports that Gillibrand, in best stump speech style, exhorted "It's time to see 'Made in America' again, starting right here in New York. When we spark more growth in clean-tech and high-tech manufacturing, we'll invigorate New York's great manufacturing communities, start more new businesses, and create more family-supported jobs right here where we need them the most."

Now high-tech manufacturing requires high-tech personnel. Next on our Web tour was a story from Financial News by reporter Mike Foster titled "We don't want no educashun." In best online fashion, we comment on Foster's comments regarding the comments of one Bill Gross, managing director of US bond manager Pimco.

Gross questions the value of investing huge sums in college education, pointing out that: the cost of college tuition has handily exceeded the rate of inflation for the last 25 years; the average college graduate is saddled with $24,000 of debt; and a college degree is no longer an assured passport to a good job and a rosy future. Foster quotes Gross as saying in his blog, "The past several decades have witnessed an erosion of our manufacturing base in exchange for a reliance on wealth creation via financial assets. Now as that road approaches a dead end cul de sac, via interest rates that can go no lower, we are left untrained, underinvested and overindebted."

His solution? Spending more state money on projects that create jobs and a focus in the schools on practical training in math and science. In other words, preparing a workforce for a high-tech future that includes advanced manufacturing tools and techniques.

Our last link provides yet another take on why the US is struggling economically with a video of Robert Reich explaining "The Truth About the Economy in 2 minutes and 15 Seconds." Whether you agree with him or not, the former Secretary of Labor, armed with a whiteboard and marker, makes the case that wages have not kept pace with inflation despite an economy that has doubled in size since 1980, and that the concentration of wealth among the richest one percent of Americans is draining the country of its economic might. The takeaway: "The only way we can have a strong economy is with a strong middle class."

So we have:

  • The UK pushing for more high-tech, high-value manufacturing.
  • A movement in the US Congress to bolster the SMMs.
  • A money man advocating high-level vocational training with a focus on math and science.
  • And a University of California chancellor and former labor secretary calling for the bolstering of the middle class through a more equitable distribution of wealth. This, we assume, would include more manufacturing jobs.

The one thread that runs through our peripatetic and admittedly arbitrary tour of the Web is the central role that manufacturing plays in determining the economic health of a country and its inhabitants.

Not being pundits, we'll let others make pronouncements about how to jump-start the economy and bolster the absolutely essential manufacturing sector. All we can do is present their viewpoints and keep you informed as the field — with a focus on digital manufacturing, modeling and simulation — unfolds in all its complexity.

Posted by John Kirkley - June 22, 2011 @ 6:45 PM, Pacific Daylight Time

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John Kirkley
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