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· America’s Advanced Manufacturing Problem—and How to Fix It
From the end of the 19th through the mid-20th century,the U.S. was the global leader in manufacturing. It is not a global leader in the advanced manufacturing of the 21st century
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America’s Advanced Manufacturing Problem—and How to Fix It (David Adler and William B. Bonvillian, American Affairs)
Industrial policy is no longer taboo in the United States. In the last two years, the federal government has undertaken multiple industrial‑innovation policy initiatives. The chips and Science Act of 2022 is designed to revitalize domestic production of semiconductors as well as to add an applied science directorate to the National Science Foundation (NSF) focused on advanced technologies. The Executive Order on Biotech and Biomanufacturing hopes to ensure that the next generation of medicines are manufactured in the United States. And the Infrastructure Act and the Inflation Reduction Act include massive investments in clean energy technologies. These industrial and innovation strategies are underpinned by a common vision, one centered on nurturing advanced technologies. The belief is that these policies will result in the United States once again being able to manufacture critical technologies at home.
But can the United States still make things domestically? What if America lacks capabilities for advanced manufacturing which the most recent round of industrial policies have not fully addressed? These go beyond the lack of resilient supply chains, or the unsurprising fact that a country which has aggressively deindustrialized during the last several decades currently lacks a workforce with skills in advanced manufacturing. What if there are more profound weaknesses inhibiting advanced manufacturing in the United States, as is indicated by the trade deficit in advanced technology products? This deficit is accelerating, growing from $128 billion in 2019, to $195 billion in 2021, to $244 billion in 2022. In 2021, the United States accounted for 78 percent of the total trade deficit among industrial nations, while China accounted for 45 percent of the total trade surplus. Productivity in manufacturing in the United States, across most measures, has actually been declining.
The United States was once the global leader in manufacturing, ushering in the mass production era from the end of the nineteenth through the mid-twentieth century. It is not a global leader in the advanced manufacturing of the twenty-first century.
