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Archive for April 28th, 2016

What Really Caused Our Manufacturing Jobs to Move to China?

Posted by Bob Warfield on April 28, 2016

Every now and again, a good rant can be cleansing.  I mean that in the best possible way.

Today, for example, I had a good rant after reading that Fred Wilson, a Wealthy and Influential Venture Capitalist in New York, was “Bothered” by the “Losing Jobs to China Discussion.”

Fred’s not long enough on facts to do much more than be troubled and hand wave away the discussion.  In his mind, there won’t be any manufacturing jobs because automation is destroying them so quickly anyway.


It’s really the Robots that took all the jobs…

Fred doesn’t think it’s worth bothering with the Manufacturing Sector because soon there won’t be any jobs left after automation anyway.  Far better to make everyone an IT guy or some such.  We’re in a transition we should double down on be happy with.  Something like what he says here:

The US and a number of other countries around the world are building new information based economies. That is the long term winning strategy.

So while we can critique our leaders (business and political) for giving up on the manufacturing sector a bit too early, I think the US has largely played this game correctly and will be much better off than the parts of the world that have taken the low cost manufacturing jobs from us.

The thing is, most all of this is a lot of Lies, Half Truths, Myths, and general Bollocks that got started by people who would benefit from offshoring manufacturing and is maintained as a cherished belief as so many myths are just because it’s been a self-fulfilling prophecy. In other words, if we destroyed our manufacturing economy it must be because our manufacturing economy was doomed and not worth saving in the first place.

Take the Robot argument.  It’s uber-popular in VC circles because people like Andrew McAfee have made careers out of pushing this thesis.  Yet, if we actually look at the numbers (which I do in detail in the article below), it’s very hard to make the case that Robots have taken more than maybe 20% of the jobs away.  That’s a far cry from eliminating an entire market segment or deciding they’ll never be able to produce enough jobs to be worth considering.

The reality is the whole thing was manipulated by a variety of parties, is based on a large number of non-truths, and is relatively easy to reverse.  Moreover, it would be extremely valuable to reverse it.

For all the detail, check out my longer post with facts and figures over at CNCCookbook, my own Manufacturing-related company.

It may be that article hit a nerve, because Fred’s site deleted a comment wherein I referred to it as “spam,” LOL.

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