U.S. Manufacturing Is Important to the Global Economy

U.S. Manufacturing Slipped to #2 Globally

The United States is no longer the world’s largest manufacturing nation. According to UN data, China boasts the biggest slice of global value-added generated by manufacturers, with 23% of the total in 2013 compared with 17% for the United States.

China’s manufacturing base keeps growing at the expense of many other industrial powers. From 2000 to 2013, the U.S. share declined by 11 percentage points while China’s share increased by 16.2 percentage points. Further, our domestic share of manufacturing value-added in GDP fell from 20% in 1980 to 12.1% in 2013. Virtually the entire manufacturing base of developed countries lost ground to services—the demand for services grows in line with income, so the richer a country becomes the more services it consumes.

Keeping U.S. plants humming will require unobstructed access to foreign markets, a favorable tax burden, a light regulatory touch, and an educated workforce. We should not fear innovation and competition since they drive creative destruction. Computing and telecommunications thrive on risk-taking and frequent churn of ideas and companies.