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American Manufacturing Skepticism The American optimist might argue that the United States with less total manufacturing jobs is a good thing – an indicator that the United States has evolved to a “post-industrial” economy (ITIF, 2012, pg. 5). But that’s a tough pill to swallow when manufacturing output from 2000-2010 has fallen 11% in the United States (ITIF, 2012, pg. 5). Meanwhile, manufacturing output in Germany, Finland, China, Japan, Korea, the Netherlands and in other countries has remained stable or has increased (ITIF, 2012, pg. 4). The U.S. has seen the closing of 66,486 manufacturing establishments since 2000 (ITIF, 2012, pg. 6), and has 6,000,000 less manufacturing jobs since 2002 (Deloitte, 2013). The United States is suffering from a high-skilled worker shortage wherein 600,000 high-skilled manufacturing jobs are left vacant (Deloitte, 2013). Essentially, the American optimist is missing it – American manufacturing is in decline while countries like Germany are seeing an increase (ITIF, 2012, pg. 5). To the point, a thriving manufacturing sector in Germany has resulted in an equally thriving economy. German Manufacturing Operations’ Profile: Innovation and Specialization “The strength of Germany’s economy ‘lies in its manufacturing sector,’ says Klaus Abberger, senior economist at the IFO Institute for Economic Research in Munich (Bolgar, 2010).” The German economy has a manufacturing foundation that is comprised of 1,200 “hidden champions”, specialized small and medium enterprises or “SMEs” (Bolgar, 2010). These companies are not large enough to engage in economies of scale, but instead, they specialize in extremely specialized products that are almost custom made for the client (Bolgar, 2010). The specialized process for developing the BMWi3 is especially noteworthy. The BMWi3 will be the first mass-market, all electric car made from lightweight components; the process for making them includes a new technology that slashes the production time of complex parts such as the car’s side frame to as little as two minutes (Theil, 2012). The reduction in time-per-part for complex composite parts makes them affordable for mass production for the first time (Theil, 2012). A BMW Project Manager replies on the subject, “The knowledge we have in bringing all these elements together isn’t something our competitors can easily copy.” Also notable, German textile firms have shifted from industrial textiles to developing innovation in aerospace and automotive industries (Theil, 2012). The national textile industry is now at the forefront of composites research using the same techniques that were used to weave and braid clothing to braid carbon fibers into strands, albeit with the latter on a microscopic scale (Theil, 2012). Of course, these innovative and sophisticated manufacturing practices aren't without extensive research and development and a strong partnership with higher education. German Manufacturing and Education As general practice in Germany, manufacturers’ partner with universities, fund research, and give universities real problems they want solved (Theil, 2012). German vocational education and training is deeply embedded and widely respected in German society (OECD, 2010). Germany’s “dual system” of vocational education and training (VET) is the central source of high skilled labor (Deutsche Welle, 2013). This system combines education in vocational schools and practical work experience in companies where training takes place (Deutsche Welle, 2013). At RWTH Aachen University, more than 20 university institutes focus on state-of-the-art production techniques, cooperating with machinery makers, robot companies and software developers to make manufacturing processes so efficient that a high-wage country such as Germany can compete with the likes of China (Theil, 2012). Other partnership examples include The Karlsruhe Institute of Technology partnering with BASF, and Technical University of Dresden partnering with chipmakers (Theil, 2012). With manufacturing as the driving force, high-skilled employees are developed in vocational schools and highly technical solutions and technology are developed in universities. Ultimately, the result of this is a resilient economy. Thriving Manufacturing Sector and Thriving Economy With a strong partnership between Industry and Education and with an emphasis on innovation and specialization, Germany has capitalized on sophisticated manufacturing processes with high-skilled workers. The result: Germany exports have held their global market share against China and other emerging countries even as the U.S. share has plummeted (Theil, 2012); Germany manufacturing came out of the financial crisis without a dent in profits or employment even though its workers make 10 times what their Chinese counterparts make (Theil, 2012); and perhaps most relevant to the United States at the moment, Germany has rising industrial employment and an unemployment rate of just 5.6 (Theil, 2012). Works Cited: Atkinson, R.; Stewart L.A. (Mar. 2012). Worse than the Great Depression: What experts are missing about American Manufacturing Decline. The Information Technology and Innovation Foundation. Web accessed 7/20/13. http://www2.itif.org/2012-american-manufacturing-decline.pdf Deloitte. (2013). Why Manufacturing Matters. Web Accessed 7/20/13. http://www.deloitte.com/assets/Dcom-UnitedStates/Local%20Assets/Images/Infographics/us_pip_da_why_manufacturing_matters_10082012.pdf Bolgar, Catherine. (2010). “Foreign Investors Flock to Europe’s Economic Motor”. The Wall Street Journal. Web Accessed 7/20/2013. http://online.wsj.com/ad/article/germany-economy.html Theil, Stephan. (Sept. 2012). “The U.S. Could Learn from Germany’s High-Tech Manufacturing”. Scientific American. Web accessed 7/20/2013. http://www.scientificamerican.com/article.cfm?id=us-could-learn-germany-high-tech-manufacturing&page=2 OECD. (2010). “Vocational Education and Training in Germany Strengths, Challenges and Recommendations”. Web accessed 7/20/2013. http://www.oecd.org/edu/skills-beyond-school/45938559.pdf Deutsche Welle. (2012). “Vocational Education and Training – Germany’s Dual System as a Role Model?”. Web accessed 7/20/2013. http://www.dw.de/vocational-education-and-training-germanys-dual-system-as-a-role-model/a-15782050
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