Yakima County Development Association - China's Growing Economic Clout Underscores Importance of US Manufacturing

Jonathan Smith

The President’s Pen is a weekly blog written by Jonathan Smith, New Vision’s President and CEO about local economic development projects and initiatives. It also covers economic trends, workforce issues, business climate policies, and manufacturing news. 



China's Growing Economic Clout Underscores Importance of US Manufacturing

March 06, 2011

Jack Schultz

No doubt about it, China is flexing its economic muscle.  I recently ran into a great blog from Jack Schultz.  He pens the Agurban and is a the author of Boomtown USA. Schultz is spot on many issues and he recently cit

ed research from the Alliance for American Manufacturing showing that:

  • In 2011, the U.S. is poised to lose its 110-year run as the world's leader in factory production to China.
  • China's economy surged ahead of Japan in 2010 to become the world's second largest.  While the U.S. remains the largest by gross domestic product, analysts predict that the U.S. risks losing that position by 2025 - if not sooner.
  • China has moved into the #2 position in the publication of biomedical research articles.
  • The U.S. has lost its position as the world's leading high-technology exporter.
  • A recent survey found that 77% of global firms say they plan to build their new research and development facility in China or India

Schultz goes on to highlight the challenges facing US manufacturers and why this sector is so important to our nation's future.

The Challenges:

  • 5.5 million - the number of manufacturing jobs lost in the last decade - roughly one-third of the manufacturing workforce.
  • 51,000 - the number of manufacturing plants shuttered in the last decade.
  • 2.4 million - the number of American jobs lost or displaced between 2001-2008 due to our massive and growing trade deficit with China.

Why manufacturing is important:

  • In 2008, manufacturing produced $1.4 trillion in national income, making it one of the largest sectors in the American economy.
  • Nearly 90 percent of all patents filed come from the manufacturing sector.
  • American manufacturers are the leading buyers of new technology in the United States.
  • American manufacturing directly employs roughly 11.7 million Americans and directly supports millions of additional jobs in other sectors.

In Yakima County manufacturing employment peaked almost a decade ago at 12,000.  Over the last ten years we have lost over 4000 jobs in this sector.  We sorely need to keep this sector healthy in our Valley and reverse the tide of plant closures and job losses.  This will not be easy though.  Some jobs will not come back because our companies are more efficient.  Investments in technology and process improvements typically translate into a smaller workforce.  Other types of goods that we have produced in the past are now more cost effective to manufacture elsewhere.

Let's not give us hope though.  We have a stable and successful family of manufacturers operating in the Valley and many of them have rebounded from the depths of our current recession.  Please make sure that we, as a community, appreciate these companies and work towards retaining them for the future.  The benefits of maintaining and growing this sector are enormous. To see Jack Schultz's blog, click here.   Before you get too daunted please see Jack's other post on manufacturing.  View the webinar within this blog and you may feel a little better.

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