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June 22, 2010 02:00 AM

110-year streak over for US manufacturing?

Don Loepp
Editor
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    Reports that China will overtake the United States as the largest manufacturing nation in the world are getting a lot of attention this week. And why not? The U.S. took the No. 1 spot from Great Britain in the 1890s, and has held the top position ever since, according to this story from the Financial Times. 110 years sounds like quite a streak, but the FT story points out that prior to Great Britain taking the crown in the 1850s, China had probably held the title for 1,500 years! "If you have a country with four times the population of the U.S. and a tenth of the wages, it is fairly obvious they will pull ahead at some time in productive capabilities," economist Hal Sirkin told the Daily Mail. Put into that perspective, the U.S. loss doesn't seem as significant. Still, it's no surprise that the data from IHS Global Insight is getting attention. There are plenty of experts lamenting the weakness in the U.S. manufacturing sector, and the fact that it's China taking the crown will feed the complaints that China doesn't play fair on the global stage. On the subject of boosting U.S. manufacturing, Andrew Liveris, chairman and CEO of Dow Chemical Co., has a column in USA Today headlined "How U.S. can launch a manufacturing renaissance." Liveris calls for:

    • New infrastructure that leverages private investment in plant and equipment, and modernizes our nation's communication networks, electric grids and air, sea and land transportation systems.
    • R&D that's cutting edge.
    • Education that leads the world, especially in science, technology, engineering and mathematics.
    • A "pro-trade" policy that creates a "level playing field" with limited tariffs and barriers to entry.
    • An alternative energy strategy that will secure the abundant energy that industry needs to stay competitive.
    • Regulatory reform, "especially as concerns the environment. Regulation is necessary, but smart regulation isn't always practiced. All too often, we see rules that bog down product innovation or that lack a solid scientific basis."
    • A tax policy that supports manufacturing.
    • Tort reform.
    "America needs an integrated and strategic approach that will incentivize manufacturers to create the jobs of the future," Liveris wrote.
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