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Interview: Manufacturing renaissance key to U.S. competitiveness, prosperity: expert

English.news.cn   2012-10-20 10:26:57            

by Jiang Xufeng, Yang Jian

BOSTON, United States, Oct. 19 (Xinhua)-- Manufacturing was critical to innovation and competitiveness of a nation, and the United States needed manufacturing revival to lay the ground for long-term economic prosperity and job creation, said a U.S. expert.

The common assumption that the United States could prosper as a global innovator without manufacturing was a "very dangerous" one, Willy Shih, a professor of Management Practice at Harvard Business School, told Xinhua during an interview earlier this week at his office.

Shih intended to persuade U.S. business and government leaders to abandon the "grand experiment in de-industrialization" before it was too late, and people in countries like China should draw lessons from what has gone wrong in the world's largest economy.

In a new book entitled "Producing Prosperity: Why America Needs a Manufacturing Renaissance" published earlier this week, Shih and Gary Pisano, his colleague at the school, depicted a picture of the waning U.S. manufacturing sector. In 1950, manufacturing represented 27 percent of U.S. gross domestic product (GDP) and employed 31 percent of the U.S. workforce, but by 2010, manufacturing accounted for only 12 percent of the nation's GDP and employed 9 percent of the workforce.

"The important conclusion that we hope people to realize is that manufacturing is important, because in many areas, it's the foundation for your ability to innovate," said the 61-year-old expert, who has spent 18 years in information technology sector followed by ten years in the consumer electronics industry.

There was a common misconception about manufacturing that it was a low-value-added commodity activity that requires low-skill workers and could be easily sourced from anywhere in the world, the two scholars contended in the book.

In many factories he has visited, manufacturing has become knowledge work. Not far beneath the surface of manufacturing production lies the development of complex, precision manufacturing process that must be capable of producing many units at economically feasible costs with extraordinary high quality, argued Shih.

"What we are trying to highlight is that manufacturing is actually a high-value knowledge work," stated the Boston-based professor.

"That's not to say that outsourcing is dead in all cases. A lot of outsourcing makes a lot of sense, but you just have to know when it's OK to outsource and when you should really hold it inside," he added.

Shih gave the example of Apple's iPhone 5 which sold about five million units in the United States over the first weekend. "That type of manufacturing was difficult to do in the United States. You can only go to China, because you should have that size of labor force, that kind of flexibility and willingness of workers to work overtime. It's all about low assembly cost," he said.

As China moves up the economic development curve, the question was whether this type of assembly work would go to countries like Vietnam, Bangladesh or others.

However, in sectors like biotechnology, "when you lose your manufacturing competence, you lose the ability to create new commercially viable products," said the former executive of Kodak.

"Especially when you have manufacturing processes which are immature, there is a lot of value creation and innovation that happens in the development of manufacturing process," he added.

Shih urged U.S. corporate and government leaders to re-invest in the nation's industrial process not only for the sake of new product development and innovation, but also for American manufacturing and the global economy.

Editor: Yang Lina
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