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Good OM Reading: Make It in America

Andrew Liveris’ new book, Make It in America (Wiley,2011) is certainly timely. The author, CEO of Dow Chemical, calls for  a national strategy to revive manufacturing, a plea repeated by President Obama in his State of the Union talk last night. Liveris wants the government to draw a  plan to encourage more manufacturing, to cut taxes, and to make regulations uniform, as in Europe and Asia.

No economy as large as the US can sustain itself without manufacturing, he writes. “Accepting such a future (as a nation of great innovations, and not as a manufacturing society), means accepting a level of joblessness that would make recent years look like a warmup”. This is a good point. If we look at a Top 10 of big time innovators (say Amazon, Apple, Dell, Facebook, GE, Google, HP, IBM, Intel, and Microsoft), we see they only employ an average of 61,000 workers. Since there are 29 people working at Wal-Mart and 2 at Disney for every one at a big time innovator, it becomes clear that we cannot count on innovators for job creation.

Being passive, as we have been for 4 decades, is not a growth strategy, Liveris adds. China has a strategy  to be more than the world’s low-cost toy manufacturer. Brazil is moving beyond its role as an agricultural leader. Some Americans imagine we can thrive by dreaming up new Kindles and iPods, while the Chinese make them. But when we move our capacity to make high-tech products overseas, we lose skill for whole sets of products.

Liveris gives the example of the Kindle. Amazon invented it, but couldn’t find the screen-making expertise and capacity to produce it in the US, so it went to Taiwan. He closes by writing: “Manufacturing is America’s future. Not just its past. Manufacturing is the foundation upon which our economic  prosperity, our growth and wealth and jobs depends.”

Click here to read excerpts of this excellent book.

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