Mt. Vernon Register-News

Community News Network

December 12, 2012

6 things to know about the future of manufacturing

(Continued)

Moreover, as wages rise, manufacturers must increase productivity in order to sustain their profits. As a result, manufacturing's share of GDP peaks at 20 to 35 percent in middle-income countries and then falls, following an inverted U curve. Today, manufacturing represents 12 percent of GDP in the United States, 18 percent in Germany, and 33 percent in China.

As they recover from the Great Recession, some advanced economies may see a rebound in hiring in manufacturing. Some might even see moderate export gains. But because of continuing improvements in productivity, the faster growth of service sectors, and the focus on higher-skilled jobs, manufacturing's share of overall employment will remain under pressure.

2. Manufacturing still has a productivity and innovation edge

Even as manufacturing's contribution to growth slows in advanced economies, the sector continues to make outsize contributions in productivity, innovation and trade. In the United States, for example, manufacturing contributes more than twice the expected rate of productivity growth for its level of GDP and employment. One result of this productivity advantage is a massive consumer surplus. While services counted in the U.S. Consumer Price Index have risen by more than 150 percent over the past 25 years, prices of consumer durables (such as cars and refrigerators) have risen by one-tenth of that rate.

Even as advanced economies have shifted toward services, manufacturing continues to lead in innovation. In advanced economies, manufacturing companies fund as much as 90 percent of private-sector research and development. Finally, manufacturing continues to dominate global trade: 70 percent of global exports are manufactured goods. These contributions -- in productivity, innovation and exports -- strongly influence global competitiveness.

3. Manufacturing and services are more intertwined than you think

The notion that manufacturing and services are two completely different economic realms has become increasingly anachronistic. Much of what goes into getting a new kind of soap on the supermarket shelf or putting a new car in the showroom requires a growing number of services. Today in the United States, for every dollar of output, manufacturers purchase 19 cents of services -- everything from trucking and logistics to advertising.

Text Only
Community News Network
  • 072214 Diamond Llama 1.jpg Llama on the loose corralled in Missouri town

    A llama on the lam cruised Main Street Tuesday before it mistook a resident’s fenced backyard for a place to grab a meal and freshen up.

    July 22, 2014 2 Photos

  • Screen Shot 2014-07-22 at 2.00.42 PM.png VIDEO: Train collides with semi truck carrying lighter fluid

    A truck driver from Washington is fortunate to be alive after driving his semi onto a set of tracks near Somerset, Ky., and being struck by a locomotive, which ignited his load of charcoal lighter fluid.

    July 22, 2014 1 Photo

  • mama.jpg What we get wrong about millennials living at home

    If the media is to be believed, America is facing a major crisis. "Kids," some age 25, 26, or even 30 years old, are living out of their childhood bedrooms and basements at alarmingly high numbers. The hand-wringing overlooks one problem: It's all overblown.

    July 22, 2014 1 Photo

  • Malaysians wonder 'Why us?' after second loss of airline jet

    It was all too familiar. Grieving families rushing to airport. The flashing television graphics of a plane's last radar appearance. The uncomfortable officials before a heavy thicket of microphones.
    For many Malaysians, the disappearance of Flight 370 in March has been a long trauma from which the nation has not yet recovered.

    July 18, 2014

  • The terrible history of passenger planes getting shot out of the sky

    What is more clear is that, if initial reports are true, this would be the deadliest incident of a civilian passenger plane being shot down in modern memory. In some instances, the causes of the disaster are still shrouded in mystery. Here are some of the worst events.

    July 17, 2014

  • 130408_NT_BEA_good kids We're raising a generation of timid kids

    A week ago, a woman was charged with leaving her child in the car while she went into a store. Her 11-year-old child. This week, a woman was arrested for allowing her 9-year-old daughter to go to the park alone. Which raises just one question: America, what the heck is wrong with you?

    July 17, 2014 1 Photo

  • Screen Shot 2014-07-16 at 2.12.33 PM.png Gunshots narrowly miss TV reporter

    A reporter for a West Virginia television station narrowly escaped injury or worse Monday while covering a fatal weekend shooting in Beckley.

    July 16, 2014 1 Photo

  • 25 hidden secrets in "Weird Al's" "Word Crimes" video

    Yankovic's 14th album was released this week, and it warms my heart containers that he's kept up his geeky brand of humor for so long. While he has written so many incredible songs, none have spoken to my love of proper grammar.
    Until "Word Crimes."

    July 16, 2014

  • State lawmakers tweak gun regulations

    Obtaining a concealed carry weapons license within the Commonwealth of Kentucky is not a simple task.

    July 16, 2014

  • When your doctor commits suicide, things get complicated

    When they call for appointments, patients are told they can't see their doctor. Ever. The standard line: "We are sorry, but your doctor died suddenly."

    July 15, 2014

Twitter Updates
Facebook
Stocks