Saturday, January 28, 2017

Manufacturing fact of the day

The off-shoring wave and loss of jobs in manufacturing conceals important facts
The UN Industrial Development Organisation (UNIDO) reckons that, in 1991, 234m people in developing countries worked in manufacturing. By 2014 the number was 304m—and there were just 63m manufacturing jobs in the rich world. But the sixth of the workers in the rich world added two-thirds of the final value.

In terms of the perception that manufacturing moved to poor countries lock stock and barrel, it hasn’t helped that the low-value work which did go overseas often involved the final stages of assembly. Putting the components that make up a product together looks like the essence of the manufacturing process. But it often adds little to the finished product’s value. Even for as complex and pricey a machine as a passenger jet, assembly is a low-value proposition compared with making the parts that go into it. By some estimates, putting together Airbus airliners in Toulouse accounts for just 5% of the added value of their manufacture—even if ensuring the aircraft were put together in France has been a non-negotiable point of national pride for the French government. Similarly, assembly in China accounted for just 1.6% of the retail cost of early Apple iPads.
And on the growing importance of post-production services, 
A study published in 2015 by the Brookings Institute, an American think-tank, reckoned that the 11.5m American jobs counted as manufacturing work in 2010 were outnumbered almost two to one by jobs in manufacturing-related services, bringing the total to 32.9m. A British study conducted by the Manufacturing Metrics Experts Group in 2016 came to a similar conclusion: that 2.6m production jobs supported another 1m in pre-production activities and 1.3m in post-production jobs.

No comments: