The Future of Manufacturing in the USA - Essay Example

The Future of Manufacturing in the USA The U.S manufacturers look to the future with a mindset of caution and optimism. As d by the National Bureau of Economic Research, the economy of the United States has experienced recessions for approximately three years. The future of manufacturing in the United States is at stake. The U.S. manufacturers, pummeled by the rising costs and shrinking demands, have borne the pain brunt, slashing payrolls, shutting down plants reluctantly, but taking other bizarre measures to stay in the business till the economy rebounds. This report shall analyze the global trends and impediments, outsourcing, and a critical examination on the impact of emerging powers such as India and China in the central thesis. The central thesis What notions underlie the USA future manufacturing? The economy globally has dramatically changed for the past 15 years. It is a period marking the deepening globalization, India, south East Asia and china taking the fore front as the major bases of manufacturing. The dot com bust and boom under the technological changes continue emerging. Faced with primary opportunities and economic challenges, U.S together with its counterparts have continually evolved and prospered. Manufacturing employment has steadily grown in the United States despite the economic challenges. From the year 1998 to 2011, manufacturing has constructed the highest private sector, and a Real GDP value added contribution. Manufacturing gives a driving engine for their economy. The USA manufacturing has received a multiplier effect upon the job creation (Cyert 48). The latest report on the supply manufacturing reveals thirty consecutive months of diffident domestic expansion. Manufacturing employment added over 30,000 jobs every month. American manufacturers have supplemented to a value of 1.8 trillion dollars to the U.S. economy after accounting for inflation. This measure grew the economy up to 6.6 percent. The U.S still targets a 20 percent of global manufacturing where the numbers differ slightly depending on the data provided. This data can be extracted from the United Nations or World Bank reports. According to the United Nations organization of industrial development 2011, the United States carries on the globe in manufacturing, with approximately 19 percent of the total manufacturing value-added output world wide. The United States has more competitive and hopeful future than most comprehended. Americans make magnificent products. Most of them could be around us. They range from Viking in the kitchen to Herman miller in the offices all the way to transportation means (GM, Tesla, and Ford). The Boeing Company in America announces its prevalent orders ever in the last year thus recording the highest exports by value. The enormous American brands, such as caterpillar and Intel, sustain the bases of domestic manufacturing despite their orientation globally. Companies repatriating include Ford and Continental AG that manufactures for a multitude of reasons, including problems of counterfeiting. Foreign corporations (Samsung and Volkswagen) at the same time build manufacturing amenities in America. The current trends in the skilled workforce, reliable infrastructure, creativity, diversity, excellent universities, and entrepreneurial spirit continues to pinpoint the manufacturing advantage. It is the U.S. contentment that it would be more attractive as its counterparts costs wane as a result of productivity. Predicaments and barriers have surrounded the U.S. manufacturing sector. It is noticeable that top foreign manufacturers could be more globalized than their counterparts in the United States. Data on the top manufacturers demonstrates that the foreign manufacturers would be more international. The foreign employment recorded increased employment to 68 percent during the years between 1998 and 2010. A comparable figure was 47 percent in 2010 for the U.S manufacturers (Maskell 29). The foreign manufacturers in the top list have established growing, and significant operations in the U.S. The market penetration could be due to green field investments, strategic alliances acquisitions, and mergers. This would influence the marketing capacity in the United States that hinders their manufacturing investments. The global localization strategy used by the foreign manufacturers develops production and local designs to respond towards consumers preferences. The foreign manufacturers could be catching up technologically respective to their competitors in the United States. The United States could be overtaken by the largest foreign firms. This study together with the universal business press suggests the continuing trends of innovations in the U.S. counterparts like India, China, even South East Asia. In this case, large foreign manufacturers may link up the success of the small manufacturers. Outsourcing is controversial and influences every business part from manufacturing to software development, design, financial control through sales and logistics management. Outsourcing receives praise as efficient, cost effective, strategic, and productive. However, it would be condemned as evil, destructive, money grabbing, exploiting the poor, ruthless, destroying nations and communities. Countries such as India, China, EU, and United States have practiced outsourcing. More than 2000,000 jobs could be lost every year in America as a result of outsourcing. Although, many economists believe outsourcing creates new jobs. Some people argue that it would be wrong to pay workers in India lower than the same vocation in countries like the United States. India produces not less than 870,000 professional IT graduates and more than a million graduates in engineering. China and India take a lead in areas of mechanical and electrical engineering, biotech, and pharmaceuticals. Most companies outsourcing in America are the large ones, yet the minute companies create the most jobs in the United States. The prominent companies make headlines but, the utmost impact is invisible somewhere else (Drucker 65). A product manufactured in china rather than the United States, a small portion of the retailing price gets into China. Most are brought by the wholesaler, retailer, research, distribution system, development and design and profits owned by the company. Outsourcing saves finances for corporations meaning lower consumer costs, and higher pensioners’ dividends who posses the United States wealth. The emerging powers such as India and china have an explicit impact on the future United States manufacturing. It remains factual that India and china are not the U.S. economy’s competitors, but makes up growth markets within the United States. The negative effect China’s strong point in the manufacturing sector and its desire for natural resources roils the economy of the United States. A mounting threat comes by the highly educated workforce of India to America’s skill-based industries like medical and bio technology, and software development (Roller 112). There is worst and excellent about India’s high technology impacts on the United States manufacturing. The qualified software of India’s phalanx programmers and developers represent a threat to companies of high technology worldwide. In addition, India could hurt the growing biotechnology and medical technology industries. The United States manufacturing industries could be the target. Conclusion All these examples put forward that it could be indeed foolish to proclaim a defeat on the United States by the emerging powers. It could be too early to conclude. With the development of China and India, some regions may suffer while others thrive. The U.S. recognition as a super power grasps the minds of many nations that attempt their competitions in the world market. The fact still remains that states can not posses every resource required to drive the economy. Nations shall continue striving to feed their own people. In this case, they continue being dependants of one another. Exports and imports shall forever soil the worlds markets. This report has given an overview of the future America in the manufacturing sector. The report gives a critical analysis on the trends and impediments concerning the future manufacturing of the United States. The outsourcing companies in the United States do not principally contribute to employment in the country as the study highlights. The emerging China and India affect the U.S. manufacturing sector either positively or negatively. Work Cited: Cyert, Richard. Technology and Employment: Innovation and Growth in the U.S. Economy. Washington, DC, USA: National Academy Press, 1987. Print. Drucker, Peter, F. Post-Capitalist Society. New York, NY: Harper Business, 1993. Print. Maskell, Brian. Performance Measurement for World Class Manufacturing: A Model for American Companies. Cambridge MA, USA: Productivity Press, 1991. Print. Roller, Hendik. “Competition and Investment in Flexible Technologies.” Management Science 39.1 (1993): 107-114. Print. Read More