The manufacturing sector of the United States economy is gone, even though some very big manufacturing companies like Whirlpool, Caterpillar and Dow Chemical are indeed building high-tech factories in the States.
How can anyone make sense of this contrast?
Andrew Liveris is Chairman and Chief Executive of Dow Chemical, recently he gave a lecture explaining the noted paradox above. He says that American’s dream up the gadgets we buy, their just made elsewhere. iPhones and Kindles were drawn up in the States and manufactured, assembled in China, Mexico and India. Liveris reveals wherever manufacturing goes, research and development tend to follow.
Global companies tend to disperse their R&D labs around the world because they need to ingratiate themselves with national governments who demand technology in return for market access.
According to Liveris, the United States has lost most of the skills-needed-population to continue here. This is due to excessive wage demand, regulation and environmental concerns. The paradox is how Japan, Switzerland and Germany continue to maintain manufacturing sectors in such a climate. Liveris thinks that such governments have indeed cut tax deals with companies to stay local. Nations that have a national strategy to seek out and keep such companies will thrive, waiting on the free market alone will not solve any specific nations need for job growth.
The biggest and most difficult challenge is to overhaul the K-12 education system, for it must concentrate on far more rigorous standards on math, science, engineering and writing if we are to compete with other countries.