Dan Wang, Why America Can Make Semiconductors But Not Swabs, Bloomberg Opinion, May 7, 2020. Much critical knowledge cannot be written down. It exists only in the minds of practitioners. Decades of offshoring have left America bereft of people, and their networks and relationships, with process knowledge.
Learning to build again will take more than a resurgence of will, as Andreessen would have it. And the U.S. should think of bolder proposals than sensible but long-proposed tweaks to R&D policies, re-training programs and STEM education.
What the U.S. really needs to do is reconstitute its communities of engineering practice. That will require treating manufacturing work, even in low-margin goods, as fundamentally valuable. Technological sophisticates in Silicon Valley would be wise to drop their dismissive attitude towards manufacturing as a “commoditized” activity and treat it as being as valuable as R&D work. And corporate America should start viewing workers not purely as costs to be slashed, but as practitioners keeping alive knowledge essential to the production process.
The U.S. government has a crucial role to play. Bills winding through in Congress to re-shore some of the medical supply chain should be only the start. For too long, tax laws have encouraged offshoring; it’s time for political leaders to remove the excuse for manufacturers not to bring production back home.
The U.S. should also learn from China’s playbook. The U.S. is a major market for many of the products it would like to make more of, such as jets, medical equipment and high-end electronics; it should leverage its enormous domestic market as an incentive for firms to localize production.
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