pam on Nostr: In wanting to understand the global economy of manufacturing better and in particular ...
In wanting to understand the global economy of manufacturing better and in particular the decline of US manufacturing, I picked up a few books on it. This one is called ‘Why manufacturing is still key to America's future’ by Ro Khanna. It’s a little old but I’ve shared some recent stats as a comparison as well. The author was with the U.S. Dept of Commerce, focusing on govt's impact, or lack thereof, on manufacturing.
Some key highlights:
1. You can’t split R&D and manufacturing. When you offshore manufacturing, you send off design with it and you lose a big chance to cultivate innovation in the US - Andy Grove, CEO of Intel.
2. Manufacturing is needed to reduce the trade deficit that started in 1971
3. U.S. exports to China are $153.8 billion, imports are $536.8 billion. Hence trade deficit with China is $382.9 billion
4. The private sector demands out-of-the-box thinking. In the gov’t, follow instructions; don’t make waves; keep your head down for career advancement.
5. Small and medium-sized businesses create about half of all manufacturing jobs and make up more than 90 percent of U.S. manufacturers
6. Cluster theory - a lot of business in the surrounding area impacts other businesses i.e. supply chain. Businesses shutting down will be like dominoes impacting other businesses - Michael Porter, The Competitive Advantage of Nations" (1990)
7. Foreign subsidy - foreign companies ie China get a lot of subsidies to build manufacturing - free land, and factory capital. Cheap labour is not the only competition
8. Corporate tax - The US charges heavy corporate tax on foreign earnings hence companies rather invest outside than bring it back - John Chambers, CEO and Chairman Emeritus, Cisco
9. < 1 percent of American businesses export and mostly to Canada and Mexico only
10. US global manufacturing share in the ’90s was >22%. It started slipping in 99’. Today it’s 16.8%. China’s global market share was 3% in the 90, 8% in 2000 - today it is 28.7%
This is just some key takeaways. I'll put up the pocket briefs on this book on Habla News for further read if interested
Some key highlights:
1. You can’t split R&D and manufacturing. When you offshore manufacturing, you send off design with it and you lose a big chance to cultivate innovation in the US - Andy Grove, CEO of Intel.
2. Manufacturing is needed to reduce the trade deficit that started in 1971
3. U.S. exports to China are $153.8 billion, imports are $536.8 billion. Hence trade deficit with China is $382.9 billion
4. The private sector demands out-of-the-box thinking. In the gov’t, follow instructions; don’t make waves; keep your head down for career advancement.
5. Small and medium-sized businesses create about half of all manufacturing jobs and make up more than 90 percent of U.S. manufacturers
6. Cluster theory - a lot of business in the surrounding area impacts other businesses i.e. supply chain. Businesses shutting down will be like dominoes impacting other businesses - Michael Porter, The Competitive Advantage of Nations" (1990)
7. Foreign subsidy - foreign companies ie China get a lot of subsidies to build manufacturing - free land, and factory capital. Cheap labour is not the only competition
8. Corporate tax - The US charges heavy corporate tax on foreign earnings hence companies rather invest outside than bring it back - John Chambers, CEO and Chairman Emeritus, Cisco
9. < 1 percent of American businesses export and mostly to Canada and Mexico only
10. US global manufacturing share in the ’90s was >22%. It started slipping in 99’. Today it’s 16.8%. China’s global market share was 3% in the 90, 8% in 2000 - today it is 28.7%
This is just some key takeaways. I'll put up the pocket briefs on this book on Habla News for further read if interested