Advertisements
GeneralHr Library

Making it in America: Revitalizing US manufacturing

Source | www.mckinsey.com : By Sree Ramaswamy, James Manyika, Gary Pinkus, Katy George, Jonathan Law, Tony Gambell, and Andrea Serafino

The erosion of US manufacturing isn’t a foregone conclusion. The decade ahead—with increased demand, new technology, and value chain optimization—will give the sector a chance to turn around.

US manufacturing is not what it was a generation ago. Its contraction has been felt by firms, suppliers, workers, and entire communities. In fact, the erosion of manufacturing has contributed two-thirds of the fall in labor’s share of US GDP.

But the decline has played out unevenly. In the past two decades, output growth in US manufacturing has been concentrated in only a few industries, including pharmaceuticals, electronics, and aerospace. Most other manufacturing industries have experienced slower growth or real declines in value added. The largest US manufacturers have managed to thrive despite growing headwinds, while small and midsize firms have been hit hard. Large firms have a stake in addressing this issue, since they face more risk without a healthy ecosystem of domestic suppliers to provide more agility and opportunities for collaboration.

Today the prevailing narrative says that nothing can be done to stop the ongoing decline of US manufacturing at the hands of globalization and technology. But continued losses are not a foregone conclusion.

The decade ahead will reshape global manufacturing as demand grows, technology unlocks productivity gains, and companies find growth in new parts of the value chain—all of which creates an opening for US manufacturing to turn things around. After combining demand projections with an analysis of specific industry trends and historic performance, the McKinsey Global Institute finds that the United States could boost annual manufacturing value added by up to $530 billion (20 percent) over current trends by 2025. Given the importance of manufacturing to the broader economy, capturing these opportunities should be a national priority. Rather than attempting to re-create the past or preserve the status quo, the United States will need to focus on positioning its manufacturing sector to compete in the future.

Read On….

Advertisements
Tags
Show More

Related Articles

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Back to top button
Close