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Death Of The Continental Economy

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There are two sides to the reshoring issue in the U.S.

GlobalSupplyChainOn the one hand precious little has been done aside from shipping production to low-cost countries. The vast majority of reporting these days focuses on offshoring as the bogeyman - and that certainly is legitimate at some level. But on the other hand, if we're going to energize manufacturing in the U.S again, we have to also acknowledge that the Continental Economy from the last half of the last century is dead.

We - or at least I - grew up in it. Local or indigenous suppliers produced for local or indigenous customers. We had the good fortune to manufacture goods within the strongest consumer economy the world has ever seen. Our high-tech, discrete parts, and innovative manufacturing base packed a powerful one-two punch: the workers in the plants consumed the products they made, and their innovation supplied the world with best-of-class products via export.

But no more. Despite the fact that companies are indeed reassessing their offshoring strategies and Lean proponents rightly advocate short, easily managed, agile supply chains, the manufacturing world has become just that. Accepting that technology has done what it always has - driven down the costs and complexities to produce products - is crucial to meaningfully solving our very real, very serious problems.

Protectionism and xenophobia are the enemy to recovery. Balanced and reasoned solutions will win the day. Doubling exports in 5 years? A great goal and a strong start - but how do we do that?

In this video from a few weeks back, Frank Vargo, the VP of Economic Affairs with the National Association of Manufacturer (NAM) lays out some measured approaches that look to not just rebuild our manufacturing base, but to redefine it. Aggressive bilateral trade agreements. Reshaping obsolete export controls left over from the cold war era. Reworking U.S. tax codes to encourage manufacturing growth. Dealing quickly to reverse the shortage of skilled manufacturing workers. These issues and other are presented, all while acknowledging that U.S. manufacturing must participate and compete globally.

Take a look, and give us your impressions. It's 40 minutes well-spent.

http://www.c-spanvideo.org/program/294968-4

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