Make It In America, Updated Edition | Andrew Liveris

Summary of: Make It In America, Updated Edition: The Case for Re-Inventing the Economy
By: Andrew Liveris

Introduction

Welcome to the intriguing world of ‘Make It In America, Updated Edition: The Case for Re-Inventing the Economy’ by Andrew Liveris. In this summary, we delve into the causes behind the decline of US manufacturing and its repercussions on the nation’s economy. Examine real-life examples of American companies that have moved their operations overseas and learn about the increasing global competition. The book also discusses the significance of manufacturing as a catalyst for economic recovery and offers solutions to reinvent and revitalize this vital sector.

America’s Looming Manufacturing Decline

The decline of US manufacturing is a growing concern, as shown by the stories of Kindle’s genesis and FormFactor’s cloning. Both are examples of how, due to a lack of domestic capability, US firms were forced to outsource to other countries, strangling nascent industries and leaving American workers jobless. The issue is further exacerbated by a lack of government support, forcing companies to seek greener pastures abroad to remain competitive. With FormFactor now operating in Singapore, each purchase by a US firm further widens the trade deficit.

America’s Shrinking Manufacturing Sector

US manufacturers are moving factories overseas due to high taxes and complex regulations. As a result, manufacturing jobs have vanished, and the US now relies heavily on its service sector. While other countries offer incentives for job creation, America’s manufacturing base continues to decline.

The United States was once the world’s leading manufacturer, with General Motors alone contributing 3% to the gross national product in 1953. Unfortunately, from 2001 to 2010, 42,000 US factories closed, leading to the disappearance of 5.5 million manufacturing jobs – one in three jobs in the sector. US manufacturing represented 28% of GDP in the 1950s, and it’s now only 11.5% as the nation transitions to its service sector. While US-based manufacturers, such as Intel, are building new factories abroad, with Intel saving $1 billion each time it does so, foreign countries offer incentives for job creation. Meanwhile, the US manufacturing base continues to shrink. Bill Watkins, CEO of Bridgelux, describes the situation succinctly, saying, “The rest of the world is chewing us up alive.” As an explosive growth in high-tech production is taking place globally, the US service sector will never need the same large numbers of workers that manufacturing once employed.

Manufacturing’s Fall from Grace

Manufacturing was once the backbone of the US economy, fueling prosperity for much of the 20th century and creating a thriving middle class. However, shifts in global trade, government policies, and technological advancements have led to the decline of manufacturing in the US. Today, the country is lagging behind as other nations invest in their manufacturing sectors, enabling them to thrive and compete globally. To revive US manufacturing, industry leaders and policymakers must come together, establish a national framework, and focus on increasing competitiveness. Collaboration is key, not confrontation, if the US hopes to regain its manufacturing dominance.

The Importance of Manufacturing for the US Economy

The manufacturing sector plays a critical role in the US economy as it creates numerous support jobs and generates more output compared to service sector jobs. The US tax system, designed in an era of limited competition, is not conducive to supporting a strong manufacturing base. Despite being more productive than ever, US manufacturing struggles due to increased global competition. In contrast, developing countries attract manufacturing by offering better financial incentives, lower taxes, and less stringent regulations. The competition gap makes it difficult for US manufacturers to succeed in the global economy. As innovation dwindles in America, foreign countries emerge as sources of innovation. The US needs to invest in human capital and support the manufacturing sector’s growth for the country’s long-term economic prosperity.

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