Sunday, December 5, 2010

Can manufacturing ever come back to US

I was reading one article written by Andy Grove in Bloomberg on manufacturing jobs in US as suggested by my good old friend Amit.


It is very sincere effort and in all probability he is right about it. It was biggest mistake by US policy makers in 80s to let manufacturing slip out of US. That shouldn't have never been allowed in first place. Without good manufacturing base in high tech US is mostly dependent on rest of the world for most of the basic needs for goods. However, fact is that most of the manufacturing has already gone out and whatever is remaining, is going out continuously.. Unless federal or state governments subsidize local industry or penalize import, manufacturing in US is not going to come back..

Question is, whether it is worth bringing back. Honestly it is dirty work and no body wants to do it here. If we were really good and passionate about manufacturing we would have survived cheap workforce syndrome of Mexico, China, far east.. Honestly, I feel, once Henry Ford started assembly line system for manufacturing it made it pretty boring and this boredom was responsible for poor manufacturing performance out here in US.  Otherwise why didn't we improvise on our manufacturing, way Japanese did it and even with higher cost basis for labor we could have kept it here. Basically, I feel that assembly line kind of manufacturing is/was very much opposite to Free and Creative spirit of Americans. It was/is pretty mundane with same task keep on doing like robots. That is what Japanese did, automated it and worked hard on building Robots. We didn't...

Our Policy makers thought that we will have enough jobs designing and engineering robots (or machines for assembly lines). Which was true in beginning. But they forgot to see future.. Once you have basic manufacturing revolution, you start developing adjacent technologies and slowly creep into other design, engineering, testing and other fun stuff. Where as once you don't have it (like in US), you start loosing touch with this so called fun stuff which you had hoped that it will continue generating employment. Now, even companies who make these kind of machinery for manufacturing (I guess, AMAT kind of companies) also started moving work to these countries so they can be closer to their customers and market.

Other fundamental breakdown with this policy happened when US policy makers failed to reform education along with this shift in manufacturing. They thought that US will be doing high value R&D and other managerial kind of jobs and let these manufacturing and call center go out. When these mid category jobs were going and there was surge in high end jobs there were no local man power to support There were not enough students coming out of college to take up these high tech jobs and that forced US companies to go out and even off shore these jobs in India and many other developing economies. Slowly this set up took effect and these US companies got addicted to lower cost of doing R&D in offshore. So US ultimately started loosing these high tech jobs as well.

So what now? The only hope is with Bio Tech or similar areas.. Unless republican's don't mess it up.. I guess. There has to be some next Quantum leap which will spur growth and hopefully we will be ready for it and won't miss the boat. US policy makers need to make sure that there is enough emphasis on education in K-12 and subsequent University system so we can't miss this opportunity. Also, this time if we are able to get this kind of Quantum leap we should be able to keep complete eco-system of R&D, Design, Engineering, Manufacturing and QA in house. Even if it means that we provide some kind of subsidy to local entrepreneurs.

Otherwise, very soon my kids may be in line to get Indian/Chinese green Cards so that they can work there.

1 comment:

Shai said...

I want to add one more thing to this posting. I don't want to hurt anyone's feeling or passion about manufacturing. I apologize in advance if I hurt anyone's feeling. It is just my personal view and how I feel about it.

Cheers - Shailendra