Two weeks ago, Steven. R. Schmid published a book entitled Expanding US Manufacturing: The Role of Technology, Policy, and Trade, which discusses and answers two important questions: 1. Why has the United States lost 33% of its manufacturing workforce (six million jobs) since 2000? 2. Why has Germany, a fellow high‑tech economy, avoided anything close to such losses?
His book provides honest, evidence‑based answers to these questions, illuminating the policy failures, structural weaknesses, and strategic gaps that have undermined American manufacturing. More importantly, they point directly to the steps required to spark a true revival of modern U.S. manufacturing.
When I spoke with Steven at the beginning of this month, I asked him, "What can spark a true revival of modern U.S. manufacturing?" Here is his complete answer:
This is more important than you may think. The United Nations Industrial Development Organization projected that China's share of global manufacturing is expected to reach 45% by 2035, while the U.S. share will drop to just 11%. A more important and frightening question may be: Can the U.S. have reasonable national security if China has over four times America's manufacturing capability?
Let's first recognize the scale of the problem. The manufacturing sector is enormous, with almost 13 million workers and contributing almost $3 trillion to the American economy, while enabling some of the most lucrative activities in other economic sectors. It is an energy-intensive, technologically advanced, complex activity. In the 1980s, manufacturing was labeled "Dumb, Dark, Dirty, Dangerous, and Disappearing." The media and education system accepted this description, and subsequent generations were encouraged to find other professions. As a result, the most technically skilled workforce ever seen in history, the Baby Boomers, are retiring without a sufficient cadre to make factories flourish. Deloitte says that around 3.8 million workers will be needed by 2033. This isn't low-tech manual labor; that is not American manufacturing. Human-centered manufacturing emphasizes properly trained and educated people making decisions to continually improve manufacturing performance; this is high-tech stuff. We don't have the people, the investment, or the proper government policy to secure a vibrant advanced manufacturing sector.
Expanding American manufacturing is not easy; there is no silver bullet or single action that can strengthen the manufacturing sector alone. My book Expanding US Manufacturing: The Role of Technology, Policy and Trade identifies the major issues, including population demographics, supply chain management and collapse, the importance of fair trade, global sourcing of materials, artificial intelligence and automation, the nature of the manufacturing sector, company management becoming ever more misaligned with American imperatives, and the proper and ethical use of tariffs. The importance of science and manufacturing infrastructure is shown, and strategies for providing the same support that other capitalist countries provide to their manufacturing sector are explained. Departures from capitalism by trade partners are also described, with remedial actions identified.
In benchmarking other nations, a similar and greatly expanded workforce development activity is needed, as is greatly expanded funding of basic and applied science as applied to advanced manufacturing. Fair trade should be encouraged; unfair trade, such as when market-altering subsidies are given to companies, should not be. Tax avoidance strategies and fanatical pursuit of short-term gain by management need preventative measures. General support of manufacturing, as championed by Germany in 1949 and duplicated around the world, is long overdue.
By understanding the nature of American manufacturing, the future of the United States can be profoundly affected. A transformation can occur, away from abandoned factories in the Rust Belt, closed steel mills, and a general sense of malaise in American cities. Instead, the United States can return to its roots as a wealth-generating, high-technology powerhouse, with a well-trained population and advanced manufacturing performed in state-of-the-art fabrication centers. As I explained many years ago, the nation we want for our children is not one where they can just get a job. They should have careers, with strong earnings, high work satisfaction, and live in a country with American ideals.
It's a great future. It's within our grasp. We just need to take it.
Do you agree with Steven's perspective? What do you think of his calls for expanded workforce training, greater investment in basic and applied science, fair-trade policies, and measures addressing subsidies, tax avoidance, and excessive short-termism?
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