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Introduction by Phil Rohrer, Marketing Manager - Industrial, Afton Chemical Corporation, www.aftonchemical.com
Introduction
Manufacturing remains a large and valuable component of U.S. output. Yet, over recent years it has experienced sustained growth in only a few high-technology sectors. Until now.
In this article, Scott Miller, a senior adviser with the Abshire-Inamori Leadership Academy at the Center for Strategic and International Studies in Washington, D.C. discusses current factors influencing the U.S. manufacturing renaissance such as globalization, low energy costs, smart manufacturing, and economic factors supportive of investment.
For more information about how Afton additives can help you take advantage of this revival in manufacturing, contact your Afton representative at www.aftonchemical. com/contact.
American Made: The Coming Renaissance in U.S. Manufacturing
Technological advances have reshaped the global economy. Worldwide, extreme poverty has been reduced dramatically. Yet at the same time, industrial economies face disruption and stagnation, including secular declines in manufacturing value-added. Over the past 25 years, U.S. manufacturing has struggled, with sustained growth in only a few high-technology sectors like electronics, aerospace, and pharmaceuticals. Most other industries have experienced stasis or outright decline in value-added, with concomitant declines in employment.1
Many observers have described the U.S. economy as "post-industrial." While it's true that services predominate, manufacturing remains a large and valuable component of U.S. output. While providing around 10 percent of employment, the U.S. industrial base output is larger than the entire GDP of South Korea. Using 20 percent of net capital stock, manufacturers account for over half of U.S. patents, 70 percent of R&D investment, and 60 percent of exports-key factors which are essential to prosperity. (Figure 1) Alternatively, a declining industrial base exposes firms to supply chain risk and limits their agility and innovation. Furthermore, manufacturing decline leads to diminished prospects for the U.S. middle class, particularly in the 500 counties where manufacturing represents the top economic activity.
Globalization: A Second Industrial Revolution
Beginning in the late 1980s, advances in information and communication technology (I/CT) led to radical changes in the way goods were produced. Just as the development of steam power in the nineteenth century was the key to overcoming transport costs, whereby firms could separate production from consumption and achieve economies of scale, the advent of low-cost, instantaneous transmission of data allowed producers...