US Manufacturing Productivity Compared to Other Countries

AUSTIN, Texas - Dec. 7, 2020 - PRLog -- To say this year has been a difficult year for the American manufacturing companies would be an understatement.

It wasn't meant to be this way.

According to the Congressional Research Service, China displaced the United States as the largest manufacturing country during the Great Recession years. The US share of manufacturing dropped from 28% in 2002 to a low point of 16.5% in 2011. By 2016, US manufacturing's share of world output was recovering from its decline during the Great Recession, reaching a 7 year high of 18%.

Things were looking so promising for a recovery in American manufacturing that consulting giant Deloitte forecast in their 2016 Global Manufacturing Competitiveness Index that the US would return to its number one global ranking by the year 2020, followed by China then Germany.

But that forecast was made before the disasters of 2020 unfolded, most notably before the global Covid pandemic, which has disrupted factory production and international supply chains around the world. But other factors are at work as well, such as the imposition of new emergency of new trade barriers as part of an attempt by Washington to decouple America from doing business with China.

The US response to the pandemic has also prolonged the difficulties for American manufacturing. At the moment, most of China's manufacturing workforce has been able to return to factory production, while here in the US, we appear to be on the cusp of a wintertime Covid-19 wave that may exceed the worst disease outbreaks of the spring and summer.

All is not lost, however.

As of November 2020, hope for a recovery is around the corner in the form of two promising vaccines (and possibly more) that could turn things around in 2021.

Now is a good time to reflect on where US manufacturing capabilities stand relative to other countries and what policy changes and investments we can make to support a continued renaissance in American manufacturing.

We'll look at three areas: the importance of developing an Innovative and Productive Workforce, the need to maintain a Favorable Business Climate, and the power of Super-charged Network Effects.

Competitive Advantage #1: An Innovative And Productive Workforce

The combination of leading-edge innovation and an educated, productive workforce (human capital) is widely seen as the most important factor in achieving long-term success in the manufacturing sector.

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