For the last century or more, the U.S. has been the world’s manufacturer of choice. Many manufacturing technologies and techniques were pioneered in this country. These led to a century of manufacturing power unrivaled around the globe. Yes, there were depressions and recessions along the way, but these were often the products of unregulated financial excesses and the cyclical nature of economic development. However, as tragic as wars are, they sometimes helped manufacturing emerge from the economic doldrums that plagued it.

Then came the 1970s, a decade in which the U.S. share of the world’s manufactured goods fell from about 26% to 23%. The U.K. and Germany also saw their shares of global manufacturers decrease during the period. More importantly, this is the decade in which the sleeping dragon that was to become China’s modern manufacturing juggernaut begins to awaken.

Between 1980 and 1990, as the U.S. fell from a 23% to 21% share of world manufacturers, the U.K. stayed flat and Germany fell from about 12% to 10%. Japan was the big winner of that decade, as its share of world totals jumped from 14-18%. China did well in the decade also, but even with the doubling of its manufacturing output, it still only controlled 3-4% of world output.

In the 1990s, the Chinese dragon not only opens its eyes but begins to stir. The nation’s economic policies promote its manufacturing capabilities, as its political leadership seeks to lure even more manufacturing to China’s economic mix. Between 1990 and 2000, China’s share of global manufacturing output rose from 3% to about 8% – a staggering increase in just one decade. And, for an encore, they repeated the performance again between 2000 and 2010, when production rose from 8-18% of the world’s total. In just 20 years, China’s manufacturing sector increased sixfold, primarily at the expense of global market share among the other leading global manufacturing countries.

As China has grown its manufacturing base, it has increased its manufacturing employment. Many jobs presently performed in China were once performed in Japan, Germany, the U.K. and the U.S. The relative importance of the service industries in countries that have lost manufacturing jobs has increased. Some economists say that service-sector jobs can pay, stimulate growth and spur innovation as well as manufacturing jobs can.

They may be right, up to a point, but what is not as arguable (to me, at least) is the fact that manufacturing activities are more likely to stimulate innovative and new product ideas that lead to economic growth and additional job formation. Also, global services are less likely to fall prey to political or religious ideologies that manipulate supplies, such as we have seen with oil supplies in the past.

About 50 years ago, we started to see what Earth looked like from space. Except maybe for their higher resolution, today’s images look about the same as they did a half-century ago. If space programs had cameras that captured economic shifts the way they captured light, however, the world’s image today would look quite a bit different from what it did just a few short decades ago. 

Dean M. Peters,

Editor