China to eclipse US in total manufacturing
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Bob Ferrari on his Supply Chain Matters blog discusses recent stories projecting the timing of when China will eclipse the US in total manufacturing output (see his post here). Bob goes on to discuss the implications of this shift. I commented on his blog and have added my comment below as well.
** My comment **
Bob - I agree with your views. First, I think it’s inevitable that China would surpass the US in total manufacturing given their size and recent track record of growth. Their domestic market alone is enormous and I think we’ve all seen how global everything has become and we know the potential for them to export. I know my kids already think everything in the world is manufactured in China! As these articles point out, that is hardly the case.
As you suggest, I don’t think that should be a core concern of the US. What we are seeing is not a unique situation. For generations products have moved to different regions of the world to be produced, following markets, skilled labor, lower costs, etc. Certainly we’re seeing this on a broader scale given China’s size, but the core issue is not unique.
What is critical for the US is, as you suggest, being the leader in innovation. What are the next generation products that only the US can produce because of its unique assets (capital markets, skilled labor, R&D, etc.)? That is the key for the US. The standard of living for the US will continue to climb if we continue to be the innovators for new, high-end products in demand by the rest of the world. In this area, the US is still doing exceptionally well and still has ample opportunity in front of it to lead.
All boats rising is not the challenge for the US. The challenge is to develop innovative products in demand by the world, to train its people to manufacture them and to establish market leadership in these evolving markets.
