Can Manufacturing Save Our Economy?

President Obama’s State of the Union address to Congress Tuesday night placed a heavy emphasis on wind and solar energy, STEM (science, technology, engineering and math) education initiatives, and manufacturing. In particular, he mentioned a manufacturing innovation institute in Youngstown, OH, halfway between the rustbelt stalwart cities of Cleveland and Pittsburgh, where workers are learning the ins and outs of 3D printing.

The president announced that his administration has plans to open three more such manufacturing hubs in other cities where “businesses will partner with the Departments of Defense and Energy to turn regions left behind by globalization into global centers of high-tech jobs.” The President also mentioned Siemens America as a company that has brought manufacturing jobs to North Carolina, something I wrote about in an earlier blog post here. 

But all this emphasis on manufacturing is leaving one observer cold. Richard Florida, the professor and author whose book “The Rise of the Creative Class” did much to change the conversation on urban design and the economic engine of the arts and technology, disagrees with this emphasis on manufacturing, arguing that manufacturing can’t save the US economy.

Florida argues that: “Manufacturing output is projected to grow from $4.4 trillion in 2010 to a projected $5.7 trillion by 2020, according to the Bureau of Labor Statistics. But this increased manufacturing output — which stems from improvements in technology, greater use of robots and automation, and improved production organization — will not necessarily translate into a whole lot more jobs.”

And he’s mostly correct. Nobody should be holding their breath for the return of the millions of jobs once created by a manufacturing sector that was not nearly as automated as it is today. Those days aren’t coming back. However, it remains true that the manufacturing sector is still vitally important to the overall U.S. economy, especially in terms of the exporting of manufactured goods. The challenge is how to continually innovate in order to create entirely new industries (think of the rise of Silicon Valley and its contribution to the U.S. as well as global economy) with the corresponding jobs to accompany them.