Only 3 Percent of What You Buy Is Made in China, But It’s the Most Important 3 Percent

For four decades, corporations have outsourced manufacturing operations to Asia, reducing costs. Shifting manufacturing off-shore eliminated jobs and also “sacrificed the know-how to think of new ways of manufacturing goods,” explains Greg Lindsay for Fast Company. In all, services represent two thirds of the US economy. Manufacturing’s role is small: San Francisco Federal Reserve economists report that “Made in China” products make up only 2.7 percent of US consumption. Yet manufacturing – inventions like the computer, iPhone, vehicles – make services possible; innovation emerges as in-house design engineers stroll factory floors, regularly interacting with workers to review methods. The US has lost its edge in cutting-edge technology, including thin-film solar cells, efficient windmills, and bio-tech. Taiwan is a high-tech powerhouse, Lindsay contends, because during the Cold War the US invested tax dollars in Taiwanese education, regulatory reform and development aid to thwart communism. Intent on austerity and reducing debt, the US now curtails similar investments on the home front, damaging prospects for future growth. – YaleGlobal