Manufacturing and Trade

<body topmargin=0 leftmargin=0 marginheight=0 marginwidth=0> <table cellpadding=0 cellspacing=0 border=0><tr> <td valign="top" height=35 BGCOLOR="#000099" TEXT="#F7F7FF"> <div> <B>Manufacturing and Trade</B></div> <div>                                                   </div> <div> </div> </td> </tr><tr> <td valign="top" height=445 BGCOLOR="#FFFFFF" TEXT="#080000"> <bR> <div> "Over the past two centuries,<FONT SIZE="2" COLOR="#0000FF" FACE="Verdana" ><B> </B></FONT><FONT SIZE="2" COLOR="#FF0000" FACE="Verdana" ><B>the place to look for technological change has been manufacturing industry</B></FONT>. This is still true, despite all the talk of a post-industrial age. If anything, manufacturing has been increasing in importance, because <FONT SIZE="2" COLOR="#0000FF" FACE="Verdana" ><B>elaborately transformed manufactured goods have increased as a proportion of world trade and hence as a conduit of prosperity and depression between nations</B></FONT><FONT SIZE="2" COLOR="#111111" FACE="Verdana" >...</FONT></div> <bR> <div> "From the relationship between manufacturing and economic well-being, based on data across OECD economies for the last thirty years, "<FONT SIZE="2" COLOR="#FF0000" FACE="Verdana" ><B>we can state categorically that the greater the size of a country's manufacturing sector (to a limit set by the national resource-base and per-capita living standards), the greater will be the rate of growth of its economy</B></FONT>... The data indicates that a manufacturing share of GDP of around 25 per cent will maximise per-capita GDP" (Peter Brain, <I>Beyond Meltdown</I>: <I>The Global Battle for Sustained Growth</I>, (Melbourne: Scribe Publications, 1999), p.39-40).</div> <bR> <div> "[Today] in most developed countries, manufacturing now accounts for between a fifth and a quarter of gross domestic product. That's down from 35-40 per cent half a century ago. Service activities including banking, retail, telecommunications services, and public sector activities such as education and medical care, have grown in importance. But this does not mean manufacturing is on the way out. <FONT SIZE="2" COLOR="#0000FF" FACE="Verdana" ><B>The world economy still needs to make an enormous number of manufactured products</B></FONT>; each year they have to be produced in greater variety with higher sophistication to meet increasingly stringent industrial and consumer demands, yet each year they must cost less.</div> <bR> <div> "A surprisingly large number of companies are involved. Of the 100 biggest US businesses, by stockmarket capitalisation, in the latest FT500, 47 have manufacturing at the root of their business. These include many information technology companies, such as Intel, Cisco and Dell, which tend to be categorised as high-tech enterprises... 19 are in chemicals, bio-technology and pharmaceuticals - areas which at heart have to do with manufacturing products. Other large manufacturers include companies not directly associated with engineering, include General Electric, which makes a large number of engineering products, as well as running a large financial services division, plus such industrial stalwarts as Ford, General Motors, Boeing and Emerson... Germany's top 100 companies by market capitalisation include 23 engineering-based businesses as well as nine involved with chemicals or pharmaceuticals.</div> <bR> <div> "Eamonn Fingleton, a Tokyo-based journalist ... has emerged as a cheerleader for global manufacturing. He points out in his recent book <I>In Praise of Hard Industries</I> (Houghton Mifflin), the important role of manufacturing in many countries in terms of providing high-value products and jobs. "<FONT SIZE="2" COLOR="#FF0000" FACE="Verdana" ><B>If a country is serious about providing high-income employment, it needs to make sure it has a high concentration of knowledge-based, capital-intensive industries</B></FONT>," he says" (Peter Marsh, <I>Survey: Manufacturing Excellence: Economic Significance</I>, ft.com, May 21, 2001).</div> <bR> <div> "[There is a] broad trend towards abolishing the old mass production line. Joe Pine, a partner in Ohio-based consultancy Strategic Horizons, says examples of mass customization have increased greatly in the past few years as manufacturers have appreciated its benefits, "<FONT SIZE="2" COLOR="#0000FF" FACE="Verdana" ><B>Sometime this century, mass customisation will become the predominant form of manufacturing</B></FONT>"" (Peter March, <I>In search of quantity in quantity</I>, ft.com, May 29, 2001).</div> <bR> <div> "[Today] if the American economy was able to cover its "visible" trade deficit through earnings in "invisibles" such as services, investment income, and tourism, as Britain did before 1914, the position [of America] would be less serious; but American invisible earnings are insufficient to close the gap. As a result, the United States now pays its way by borrowing from foreigners... <FONT SIZE="2" COLOR="#FF0000" FACE="Verdana" ><B>The heart of the trade deficit problem lies in the long-term erosion of America's relative manufacturing position, which may seem a curious fact when so much of the economy is in services</B></FONT>. Yet, by their nature, many services activities (landscape gardening, catering, public transport) cannot be exported, and even when earnings from services are considerable (consultancy, legal work, patents, banking fees), the total doesn't pay for the goods and services imported each year. Manufacturing is vital for other reasons: it accounts for virtually all of the research and development done by American industry, and a flourishing and competitive manufacturing base is still "fundamentally important to national security"" (Paul Kennedy, <I>Preparing for the Twenty-first Century</I>, (London: Fontana Press, 1994, p.298).</div> <bR> <div> "If this export of the means of production were continued indefinitely, it would simply be the end of the vital prerequisite for European Industry. Therefore international agreements on limiting the export of the means of production are necessary" (Adolf Hitler, cited by Harold James: <I>The End of Globalization: Lessons from the Great Depression</I>, p.106).</div> <bR> <div> "Jerry Jasinowski, who is an economist and president of the NAM [National Association of Manufacturers], is resigned to the fact that many of the factory jobs cut will not reappear. But he is also proud of the fact that<FONT SIZE="2" COLOR="#0000FF" FACE="Verdana" ><B> productivity growth in manufacturing has consistently outstripped that of the rest of the U.S. economy</B></FONT>, yielding great benefits to the nation overall.</div> <bR> <div> "<B>In the past two decades</B>, <FONT SIZE="2" COLOR="#FF0000" FACE="Verdana" ><B>"manufacturing productivity grew at double the pace of overall productivity growth</B></FONT>... This increase in productivity has enabled the economy to grow faster without inflation and has been passed through to workers in the form of higher [inflation-adjusted] wages," says a report published by the Manufacturing Institute, an arm of the NAM" (John M. Berry, <I>Some Lost Jobs May Never Come Back</I>: Improved Productivity Allowed Manufacturers to Reduce Payrolls Permanently, washingtonpost.com, November 29, 2003).</div> <bR> <div> "The decline in manufacturing as a creator of wealth and jobs will inevitably bring about a new protectionism, once again echoing what happened earlier in agriculture" (Peter Drucker, <I>Survey of the near future</I>, <I>The Economist</I>, November 3, 2001, p.13).</div> <bR> <div> "Just as eternal vigilance is the price of liberty, so the price of progress is <FONT SIZE="2" COLOR="#0000FF" FACE="Verdana" ><B>eternal change</B></FONT>. This price seems prohibitive enough to cloud the realization that <FONT SIZE="2" COLOR="#0000FF" FACE="Verdana" ><B>the consequences of non-payment are worse than paying it</B></FONT>" (Richard Grunberger, <I>A Social History of the Third Reich</I>, (London: Penguin Books, 1991), p.320).</div> <bR> <DIV ALIGN="LEFT"></DIV> <div> <A HREF="id56_m.htm" TITLE="Manufacturing and Trade">Top of Page </A>        <A HREF="id53_manufacturing_and_trade.htm" TARGET="_top" TITLE="News, Current Events and the Future">News and Current Events Page</A>          <A HREF="index.htm" TARGET="_top" TITLE="Future Watch">Home Page</A></div> <bR> </td> </tr></table></body>