There was a time when the U.S. was proud of its factories. From one state to the next, James Hurysz notes, factories were the badge of regional economic success. They provided jobs, income, careers, and stability for communities. In fact, the term “factory town” was a commonplace reference to many locations in eastern states where the entire town was made up of the factory employees and management. However, those days are long gone in the 2020s, everything seems to be imported and shipped in, and the great American manufacturing ethos now seems to be a footprint in history books.
We are Our Own Worst Enemy
Much of the problem that created the manufacturing exodus was consumerism, the need to buy more with cheaper prices that could be used temporarily and then thrown away. James Hurysz points out that the very thing that made U.S. culture unique and different from the rest of the world with its abundance of resources and choice has now been the very cause of losing many of the country’s factories.
As companies felt competitive pressure to produce more with less cost, they moved overseas. That in turn shut down domestic plants and replaced them with overseas facilities and shipping in. Eventually, that too led to outright contracting out and outsourcing, essentially doing away with any ownership of the manufacturing process altogether. Is it any surprise then, asks James Hurysz, that over 90 percent of American consumer goods are fabricated outside the country?
Small Business Development is the Key
Trying to bring back manufacturing will have to develop the same way it did hundreds of years earlier, at the grassroots level. Interestingly, that is exactly what is occurring. James Hurysz is seeing hundreds of small businesses and companies specializing in advanced, new technology generating the next wave of manufacturing in the U.S. However, that only works up to a certain plateau.
Then companies seem to be prone to repeating the same mistakes of the past, being bought out by bigger players who take their technology and ship it overseas for fabrication in assumably cheaper factories elsewhere.
Drastic Improvement Requires Drastic Change
For the U.S. to regain its manufacturing base, it will need to systematically support or push for three things to happen. First, in James Hurysz opinion, the U.S. has to establish itself as the premier leader in innovation. A clear cutting edge in market demand remains the player with the better mousetrap.
Second, a concerted effort has to be made at multiple levels to keep that innovation in the country versus shipping it out to cheaper labor factories overseas. Finally, markets need to be closed to outsiders penetrating with cheaper substitutes for new technology.
While the above might seem to be a throwback to isolationism and tariff strategies, James Hurysz believes these elements are essential to bringing back a broad base of manufacturing domestically. Without this dramatic paradigm shift, American manufacturing will continue to bleed overseas without the broad economic benefit it historically used to provide.