Revitalizing US Manufacturing - An Urgent Call

Very few (if any) countries won't be touched by the novel Coronavirus (COVID-19).  It has changed our world forever. 

And while we are still in the trenches of fighting this battle, we are far enough into it that we must now begin to consider how we are going to exit.  Surely, things will not simply "return to "business as usual" with the snap of a finger once the Shelter-At-Home orders are lifted.   Nor should it. 

But what might a post-COVID world look like?   And how, if at all, will it reshape US manufacturing?

I found some thought provoking observations in a 2017 report by McKinsey & Company (@McKinsey) entitled "Making It In America: Revitalizing US Manufacturing"   Unless otherwise noted, all quotations referenced in this article are from this report.  You may download a copy of the full report here.

In the past two decades, output growth in US manufacturing has been concentrated in only a few industries, including pharmaceuticals, electronics and aerospace. .....  the lack of a healthy domestic base of small firms exposes larger firms to global supply chain risk and limits their agility and innovation.  More broadly, the decline of manufacturing has diminished prospects for the US middle class, contributing two-thirds of the fall in labor's share of US GDP"  

"US manufacturing is not what it was a generation ago.  Its contraction has been felt by firms, suppliers, workers, and entire communities.  Today the prevailing narrative says that nothing can be done to stop its ongoing decline at the hands of globalization and technology. ...... But it is worth fighting to retain a healthy production base, which is closely linked to the nation's ability to bring new innovations to market.  The erosion of manufacturing has been a major factor driving down labor's share of national income and hollowing out local economies.  No other sector fills manufacturing's traditional role in providing middle-income jobs across a wide swath of the country."

I suspect that we are months, if not years away from fully comprehending the impact COVID-19 has had on the global economies.  

Loss of lives.
Loss of livelihoods.
Small and Large Businesses that never recover.

My sincere hope is that from the ashes of COVID-19, we begin to make a shift to revitalize manufacturing in the USA so that we are not so utterly dependent upon other countries (and most especially, China) going forward.

May this be our wake-up call.  

I highly encourage you to read the full 2017 report (link provided above).  There is a lot of data included, which might prove helpful to future risk mitigation plans.

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