Foreign Policy: The Future of Manufacturing Is in America, Not China
How new technology is driving a U.S. industrial comeback.
... But Ralph Lauren berets aside, the larger trends show that the tide has turned, and it is China's turn to worry. Many CEOs, including Dow Chemicals' Andrew Liveris, have declared their intentions to bring manufacturing back to the United States. What is going to accelerate the trend isn't, as people believe, the rising cost of Chinese labor or a rising yuan. The real threat to China comes from technology. Technical advances will soon lead to the same hollowing out of China's manufacturing industry that they have to U.S industry over the past two decades.
Several technologies advancing and converging will cause this.
First, robotics. The robots of today aren't the androids or Cylons that we are used to seeing in science fiction movies, but specialized electromechanical devices run by software and remote control. As computers become more powerful, so do the abilities of these devices. Robots are now capable of performing surgery, milking cows, doing military reconnaissance and combat, and flying fighter jets. Several companies, such Willow Garage, iRobot, and 9th Sense, sell robot-development kits for which university students and open-source communities are developing ever more sophisticated applications.
The factory assembly that China is currently performing is child's play compared to the next generation of robots -- which will soon become cheaper than human labor. ...
... A type of manufacturing called "additive manufacturing" is now making it possible to cost-effectively "print" products. In conventional manufacturing, parts are produced by humans using power-driven machine tools, such as saws, lathes, milling machines, and drill presses, to physically remove material until you're left with the shape desired. This is a cumbersome process that becomes more difficult and time-consuming with increasing complexity. In other words, the more complex the product you want to create, the more labor is required and the greater the effort.
In additive manufacturing, parts are produced by melting successive layers of materials based on three-dimensional models -- adding materials rather than subtracting them. The "3D printers" that produce these parts use powered metal, droplets of plastic, and other materials -- much like the toner cartridges that go into laser printers. This allows the creation of objects without any sort of tools or fixtures. The process doesn't produce any waste material, and there is no additional cost for complexity. Just as, thanks to laser printers, a page filled with graphics doesn't cost much more than one with text (other than the cost of toner), with 3D printers we can print a sophisticated 3D structure for what it would cost to print something simple.
Three-D printers can already create physical mechanical devices, medical implants, jewelry, and even clothing. The cheapest 3D printers, which print rudimentary objects, currently sell for between $500 and $1,000. Soon, we will have printers for this price that can print toys and household goods. By the end of this decade, we will see 3D printers doing the small-scale production of previously labor-intensive crafts and goods. It is entirely conceivable that, in the next decade, manufacturing will again become a local industry and it will be possible to 3D print electronics and use giant 3D printing scaffolds to print entire buildings. Why would we ship raw materials all the way to China and then ship completed products back to the United States when they can be manufactured more cheaply locally, on demand? ...
Remember that the above does not mean there will be more manufacturing jobs in the U.S. We will still see a decline in manufacturing jobs. Manufacturing as a percentage of GDP has remained very constant since World War II, but technological innovation has eliminated the need for much human labor. About 32% of the labor force was in manufacturing in 1947, but it is about 12% (and declining) today. The loss of manufacturing jobs has much less to do with China and more with ongoing technological innovation.
Who will support the masses of unemployed? Distribution of production would be a much worthier goal for governments than GDP.
Posted by: D Walton | Jul 28, 2012 at 07:58 AM
For the production of most (not all) physical goods there are economies of scale. Mass production usually leads to less waste of resources, less CO2 emissions, more efficient use of energy, and lower cost for of the final product for the consumer. Manufacturing is on the same trajectory as agricultural work was 100 years ago. Be eliminating the need for individuals to be directly involved in the production of their own food and from manual fabrication of their basic material needs, labor and resources are made available for other pursuits. Living standards improve when either our wages go up or the cost of things we buy go down. Mass production improves living standards lowering the cost of the things we buy.
I don't see distribution of production, in itself, as a goal. Some industries will be highly distributed (say, bakeries) and others highly concentrated (say, jumbo jet manufacturers.) Distribution of production, assuming a relatively free market, is simply an affectation of the characteristics of a given industry. I see nothing commendable, either economically or sociologically, about greater production distribution. But artificially imposing it would have grave consequences for human flourishing.
Posted by: Michael W. Kruse | Jul 28, 2012 at 11:19 AM
Thomas Jefferson's draft of the Virginia Constitution of 1776 included that "every person of full age neither owning or having owned 50 acres of land shall be entitled to an appropriation of 50 acres." Land is the basis of all production. Jefferson rightly understood widespread liberty to be dependent on the widespread independent means of making a living. Ownership of land was to be in the hands of the people, not the government. Now government claims to be the owner of all land (try missing a property tax payment!). The goal for Jefferson was widespread liberty, not cheaper plastic forks. Explain to all the increasing unemployed world-wide, how mass manufacturing benefits them. Where is the proof?
Posted by: D Walton | Jul 29, 2012 at 09:58 PM