Sustaining the Wealth of the Nation

 

We have all heard the phrase "manufacturing creates wealth." And everybody in the moldmaking industry knows that this is true. When you can take raw materials and manipulate them in a way that creates a product that is worth more than the sum of the cost of the materials, then you have created wealth. If you are able to do this over and over, create goods and sell them at a price that exceeds the cost of the inputs, you can create a lot of wealth. America built the biggest economy in the world based on this concept of creating wealth.

One reason for this is that the goods we manufactured in this country also made it possible for farmers, and construction workers, and doctors, and truck drivers to do their jobs better. But there is an even more important explanation for how America’s manufacturing sector built such a powerful economy. And that is because there is another type of wealth that is created by manufacturing. It is the most precious type of wealth there is. Manufacturing creates knowledge.

There is still a common misperception about manufacturing that it is a series of mindless tasks repeated over and over by low skilled workers. But the fact of the matter is that an increasing amount of manufacturing is knowledge work that requires very highly skilled workers. Very often, a crucial component of the engineering that is required to make and sell a product occurs on the factory floor. It is also true that many of the improvements in the product design or manufacturing process (a.k.a. innovation) can only be discovered during the manufacturing process itself. We learn a lot by doing.

Everyone agrees that if North America is going to compete successfully in the global marketplace, then we must continually innovate. And the capacity to innovate is directly tied to the ability to manufacture.

We all know that in sports there is no substitute for experience in the big game. Competition at the highest level brings out the very best in a competitor. And the very best competitors create the most wealth for their teams. The same is true in manufacturing. In order to create the most wealth, you must be the very best. The only way to be the very best over a long period of time is to innovate. And the best way to innovate is to maintain and expand the capacity to manufacture.