Few sectors have been as integral to the success of the United States as the manufacturing industry. Since the dawn of the Industrial Revolution, manufacturing has been a primary driver in the growth and prosperity of the United States. The influence of the manufacturing industry is still profoundly felt today. In fact, if you isolated the American manufacturing industry, it would rank as the 9th largest economy in the world. However, in spite of recent improvements, this month Reuters found that “U.S. manufacturing output unexpectedly fell in May as motor vehicles and parts production recorded its biggest drop in nearly 2-1/2 years, suggesting sustained weakness in the sector even as the overall economy appears to be gaining momentum.” For the benefit of the economy, and the nationa as a whole, it is critical to stimulate an American manufacturing comeback.
The Wall Street Journal has identified several ways to spur major growth in the manufacturing industry. For starters, the United States should reconsider the common practice known as offshoring. Offshoring involves American businesses moving their operations overseas, which carries with it several negative consequences. For one, offshoring hurts American workers by sending away manufacturing jobs. Furthermore, outsourcing can cost more than the production of American-made product. The Wall Street Journal has found that “Manufacturing overseas carries dozens of uncounted expenses and consequences. Companies often don’t weigh costs for transportation, as well as expenses for dealing with reduced product reliability, undependable supply chains and the need to hold more inventory in case overseas deliveries are delayed.”
Another way the Wall Street Journal believes the United States can reinvigorate the American manufacturing sector is by “creating regional centers of expertise.” This approach would involve creating a sort of Silicon Valley for the manufacturing sector. Many American cities were once humming with economic activity, but the activity ceased during the manufacturing downturn and these jobs have yet to return. These cities are great candidates for regional centers of expertise as they “still have considerable manufacturing talent and expertise that can form the foundation for manufacturing innovations and new businesses.” By establishing world-class hubs, American manufacturing can regain its hold on industries that have been lost in recent years.
Never before has the revitalization of the manufacturing industry been more needed. The Associated Press recently reported that the U.S. trade deficit has increased to its highest level in 7 years. The Economic Policy Institute has found that reducing the national trade deficit can generate a manufacturing-based recovery in the United states. An effective way to reverse the negative trade deficit is to focus on producing and purchasing products that are made in the United States.
The task at hand may seem daunting but, in reality, the goal is more than achievable. The revitalization of American manufacturing can come to fruition through eliminating the practice of outsourcing, establishing regional centers of manufacturing expertise, and cutting the trade deficit. By reviving the American manufacturing sector, we can write the next great chapter in United States economic history.