The Case for Manufacturing

The Case for Manufacturing

As a student, I was no fan of required reading for my coursework. Somehow, the extra reading for advanced dynamics and partial differential equations never achieved any relevance in my career or, for that matter, my life. So it is with some reluctance, but all sincerity and urgency, that I encourage you to read a report commissioned and recently released by the National Association of Manufacturers (NAM). The report is entitled Securing America's Future: The Case for a Strong Manufacturing Base, written by Joel Popkin and Company. The report came to my attention thanks to a link on NADCA's website.

It should be required reading to anybody who makes things for a living, or who works for a company that does. It should be mandatory reading for legislators and those who form economic policy.

The report is summarized in our news pages this month, and there are many noteworthy issues raised in it. Among those, I'd like to quote a few extracts:

- "Manufacturers' investment in physical and human capital, R&D, and productivity are intertwined and together provide substantial economic benefits. This is the method by which innovations become an integral part of the economic process and lead to widespread improvements in productivity."

- "There is, indeed, cause for grave concern about the future of the inter-linked manufacturing process that has generated such a large share of American prosperity. While no one can determine what the critical mass is to produce the most important benefits from the manufacturing sector, the process by which those benefits are produced clearly requires one. Today there are worrisome signs that mass is endangered."

- "U.S. manufacturers' cleaner production processes and safer products are designed for domestic and world consumption, which means they often compete with products produced under less environmentally sound processes. This dual production is not costless to the manufacturing sector."

- "If the U.S. manufacturing base shrinks too much, it promotes a shift in R&D and investment to other global centers where the critical mass necessary to conduct it exists and is growing. If this happens, a decline in the U.S. long term economic growth rate is all but assured."

I often find myself disturbed at the direction our policy makers have taken on this issue. Too often, it seems, they treat manufacturing as if it was a four-letter word. It is not.

In the creation of real wealth, there is no substitute for a process only manufacturing can provide -- the formation of capital. The service sector doesn't do this. In fact, manufacturing is so important, even the service sector depends on it. I can think of no service industry, save one I won't mention, that doesn't depend on manufactured products.

Manufacturing's woes are not entirely the fault of politicians, but my experience with them is that they don't know much about the importance of manufacturing. It's up to us to educate them.

I exhort you to take the time to download and read the report from NAM'S website at www.nam.org. Click on the link called A Case for a Strong Manufacturing Base - Popkin White Paper Release. Then contact your state and federal representatives. Tell them you are concerned, why you are concerned, and that you vote.

Then send them a copy.

Dean M. Peters, Editor

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