Wednesday, October 18, 2017
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We Don't Make 'Em Like We Used To
Jacob Fattal, Publisher

The age of mass employment in manufacturing has passed, likely never to return. Often cited by political figures, the need to renew and create manufacturing jobs at home has been a sort of Holy Grail for policymakers in the U.S. This is not a uniquely American issue. Politicians in the UK, France, and many other European countries are articulating a similar ideal: Bring manufacturing jobs back. However, over the past decades of the manufacturing industry's apparent hiatus, technology has kept up a relentless pace. There is an ongoing push for onshoring and reshoring — popular names for creating or bringing back manufacturing jobs to the U.S. An oft-cited patriotic gesture is to only purchase products that carry labels saying "Made in U.S.A."

The difficulty lies in the fact that manufacturing has not really disappeared, but has changed so drastically that it has become unrecognizable. The top manufacturing employers are now multinational entities that have spread from continent to continent, filling their once accessible lower-skill positions with workers in lower-cost locations. The jobs left at home have much higher skill requirements and are much more competitive. Also, today's manufacturing jobs, such as those in design and R&D, and even those in areas like supply chain management, are not the same kind of stable, unchanging positions that our politicians seem to yearn for.

Many of the lower-skill positions have disappeared altogether, owing to technological progress in automation and other productivity-boosting solutions. Among other advances, we have seen the rise of interconnected sensing technology that provides detailed information about production machines and production line status to manufacturers. The resulting increase in efficiency across the board has led many companies to streamline their services and to outsource manufacturing to others that are able to build a given product more quickly and at lower cost. A study conducted by the Brookings Institute in 2015 found that manufacturing-related service jobs in the U.S. outnumbered actual manufacturing jobs by almost two to one.

This year, as discussion about manufacturing job creation moves from campaign rhetoric to actual policymaking, we should keep a fresh eye on the shifting landscape of manufacturing. Technology has changed manufacturing irreversibly and turned the much romanticized task of the common, hard-working assembly worker into a complex web of competing services. We should take a careful look at the reality of the situation and be open to change. Manufacturing is going through continuing transformation, turning entire industries upside-down, and the electronics industry is no exception. There is a bright future for manufacturing, but we have to be careful not to look too far backward to build what's ahead.  

 
 
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