The gain in U.S. factory output last month was the largest in a year, and Bloomberg describes the sector as “at the center of the expansion.”
Yet a new government report finds that the United States has lost more than a quarter of its high-tech manufacturing jobs in the past decade. The report by the National Science Board doesn’t explain how the jobs were lost, but the Chicago Tribune quotes Rolf Lehming, program director, as saying:
We don’t have any data that says these jobs were outsourced.
Manufacturing methods that bring greater efficiency and higher productivity from fewer workers have been cited before.
Among the report’s findings:
- 28 percent, or 687,000 jobs, have disappeared since a peak of 2.5 million in 2000. In some states, the rate was higher, such as 31 percent in Illinois and 29.2 percent in Ohio.
- “Substantial and permanent” losses have taken place in such sectors as aerospace, pharmaceuticals, telecommunications equipment, computer and office equipment, and scientific instruments.
- U.S.-based multinational companies are creating research-and-development jobs abroad at a much higher rate than at home. Since 2004, about 85 percent of all R&D job growth has taken place at those companies’ locations outside the United States.
- China has more than doubled the number of doctoral degrees granted in engineering, now far exceeding the number awarded in the United States.
- In 2009, the United States spent $400 billion on R&D, while Asia spent $399 billion. However, with wages rising in China, the report noted that ““China’s overwhelming manufacturing cost advantage over the U.S. is shrinking fast.”
It warns that the United States is in danger of losing its position of leadership in this area.
Through its Advanced Manufacturing Partnership announced in June, the Obama Administration has pledged to collaborate with private-sector partners to boost innovation and the job skills needed for next-generation manufacturing. Those jobs increasingly call for computer, math and communication skills — and increasingly some college education. GE organized a media junket, covered by Forbes back in July, to explain its vision of the higher skills needed in advanced manufacturing.
And a new report by the Brookings Institution credits the strength of manufacturing for boosting the long-depressed cities of Detroit and Buffalo. That report, though, illustrates how the recession has sapped the economic strength of North America and Europe and accelerated a shift in economic power to Asia.