From CNET: Former Intel CEO Andy Grove is dead on about the dire need to come up with policies to create more manufacturing jobs in the U.S. Look no further than the bustling economies in Asia if there is any doubt.
Here’s a key point Grove makes in the Bloomberg piece. “Our fundamental economic beliefs, which we have elevated from a conviction based on observation to an unquestioned truism, is that the free market is the best economic system–the freer, the better…So we stick with this belief, largely oblivious to emerging evidence that while free markets beat planned economies, there may be room for a modification that is even better.”
And, in a corollary, he says that the relentless push by U.S. companies to move manufacturing overseas breaks the innovation and job-creating chain, what he calls “scaling up” where companies “work out design details, figure out how to make things affordably, build factories, and hire people by the thousands. Scaling is hard work but necessary to make innovation matter.”
Grove continues. “Not only did we lose an untold number of jobs, we broke the chain of experience that is so important in technological evolution. As happened with batteries, abandoning today’s ‘commodity’ manufacturing can lock you out of tomorrow’s emerging industry.”
Grove is right. I lived in Japan for 10 years (until 1993). I worked mostly as a journalist, covering the Japanese high-technology industry. In one job, I translated and rewrote reams of articles from the Japanese industrial dailies (covering machine tools, cars, chemicals, computer components) over a three-year period (which, by the way, we sent to clients like AT&T, Motorola, and IBM), giving me pretty good insight into Japan’s vaunted manufacturing system.
The underlying philosophy–monozukuri (making things)–was so beneficial to the Japanese economy and Japanese employment that it was copied all over Asia. Taiwan, South Korea, and China, to mention a few. I don’t think I need to argue how successful those economies have become. In fact, the problem for Japan is that those countries have been so adept at aping monozukuri that they have become formidable Japanese manufacturing rivals and sucked a lot of the manufacturing out of Japan.
Witness Taiwan’s Hon Hai Precision Industry, Co., which seems to make everything under the sun including the iPhone and iPad. And Samsung, now the No. 1 manufacturer of LCDs and flash memory chips and the supplier of the core silicon in both the iPad and iPhone 4 (where Intel is conspicuously absent).
