Stagnation of Manufacturing Productivity in the United States - Research Paper Example

Stagnation of Manufacturing Productivity in the United s Contents of the Documentation: Abstract Introduction to Manufacturing Productivity Reasons for stagnation Measures for revival Conclusion References. Abstract The most important factor for any nation in today's scenario is to be world leaders in the Manufacturing economy and not mere survivors. To gain lead the various factors that are involved in manufacturing productivity play a vital role. Manufacturing productivity has become one of the important reasons for the nation's economic development. The best method to gain a lead is to rule the economic market in the international level. The following document presents a brief Introduction to the Manufacturing Productivity of America. It puts forth the various reasons for the cause of stagnation in the Manufacturing Economy. Later on it deals with the challenges faced by the economy and the probably solutions that were implemented in order to revive the Manufacturing aspects. Introduction to Manufacturing Productivity Unites states is considered to be one among the top ranking nations when it comes to Manufacturing Productivity. (Dept of Commerce, 2004). The citizens involved in the manufacturing production activities are considered to be the backbone of the American Economy to achieve a huge growth rate. An overall economic development can be achieved by good manufacturing productivity. Manufacturing productions is the major aspect of inventing and deploying the various technological trends, providing jobs to the numerous citizens of all ranges, and the developers usually end up investing a huge amount of resources in the economy depending on the market trends in the manufacturing sector thus forming the essential part of economic development aspects. Reasons for Stagnation: International trade can be always the major factor for the progress of global economy, and to overcome the extreme competitiveness the armaments utilized are manufactured goods. But the new technology trends involved with globalization have manifolds expanded the scope of competitiveness by demanding high rate of production to be the end result of minimized resources. The following have been quoted by (Kevin L. Kearns and Alan Tonelson, 2003) as the reasons for stagnation in the manufacturing economy. Inefficiency in introducing foreign consumption markets. The manufactured goods had not brought the expected profits to the nation as there was a lack of opening in the market. This did not consume the required goods in the apt amounts of productions thus bringing in huge losses to the manufacturing economy. Inability to meet the requirements of the home market. The required materials where not produced at the right time to the home market. As the manufacturers were short of the basic resources to produce goods with innovation it affected the home market drastically. Difficulty in managing the imbalances arising due to international debts. As the manufacturing economy was in running in losses due to lack of proper production of goods in demand; the amount of debts increased. These debts created huge imbalances at the international level. Downturn in the employment base. As the manufacturing units ran into losses; the inefficiency of providing proper wages and retaining the workers increased manifolds. This on a large scale affected the overall employment base of the entire nation. Manufacturing crisis leading to a dependable maintenance of world- leading military. The necessity to be the universal power had always demanded for high-tech military armaments. The secure military base was built by gathering the diverse technologies from the long-term allies. The dependency to gather technology from various other nations has also become a major factor. Threat to the industrial base due to an extreme loss in tax revenues. As the domestic taxes increased the economy had some manufactures losing their production activities in the market. This indeed has brought a loss to the amount of revenues that could be actually obtained. The development of the industrial economy could not be encouraged for an extensive end. (Joel Popkin and Company, 2003) Lack of agreeable terms in foreign trade leading to outsourcing. The lawsuit did not support many of the reasons to increase foreign trade. To overcome this problem most of the manufacturers adopted the concept of outsourcing, which was an overall loss to the entire economy. Loss of supply chains due to the migration of essential contractors. As the number of opportunities decreased due to the above stated factors the essential contractors preferred to migrate to other nations where they were offered supportive conditions for manufacturing. This definitely brought in a huge loss in the prime supplies. These supplies were the basic necessity for various manufacturers in the American economy. Public investments not being targeted to build a strong infrastructure. The manufacturers preferred to migrate and setup units in the nations that offered much supportive environments. This was the reason for the public to doubt their investment in the American markets and thus led to the downfall of the public infrastructure. Lack of incentives offered to the employers. The employers were not offered sufficient mount of incentives and this was an extreme task to overcome in order to retain the employees as their health insurances, maintenance of retirees and encouragement for the active workers was at stake. (aflcio.org) Measures for Revival The need for United States to be world class leaders in the manufacturing economy has been claiming for revival measures to implement immediately in order to reestablish it as the leading producer of manufactured goods. The following measures have been suggested over the various roundtables that were held in order to overcome the stagnation of American Manufacturing Productivity. (John & Taras, MARRV, 2006) The investments should be guided towards the Research and Development sector Research and Development center is the environment that brings the idea of an essential product to life. As the newer products based on requirements are developed the technology trends are always up high and acts as a major boost for the market value. Research & Development also provides job opportunities to skilled workers. As the Research and Development sector requires innovative brains to function together, it demands for skilled workers. Thus all the citizens who wish to implement their innovative ideas are provided with initiatives. Create opportunities in order to minimize the rate of contractors migrating to other nations. As new ideas are being brought up the scope for the contractors increases to invest their raw materials into the right manufacturing units. With the provision of necessary supplies the manufacturing production can enhance itself to higher standards by reducing the cost of resources and increasing the production rate. Reductions of domestic taxes such that they are affordable and encourage more number of manufacturers to invest in the market. As more number of public investors increase the market competitiveness increases and does not cause any erosion of the economy. The cost is also affordable and helps enhancing the home market. Provision of basic supplies such as energy and other resources at affordable prices.(Findarticles.com) This helps more number of manufacturers to establish their units and increase the production as well as the competitiveness in the market economy. Introduction of agreeable terms to establish excellent foreign trade activities, to develop the manufacturing economy internationally. Increase in foreign trade helps build a stronger economy internationally. This also plays a major role in retaining the leading position in the world market. Reduction of costs that deteriorate the Competitiveness in the market. Reduction in the costs of the prime elements of production increases the competitiveness in the market and does not support a single manufacturing unit in monopolizing the entire market such that the competitiveness deteriorates. Conclusion A $40billion investment to develop the American economy must be an essential initiative that should be taken up by the government ion a yearly plan. (Upjohn Institute Staff, 2003). 25% of the investment should be directed towards the federal resources and the other 75 % should be utilized in the optimistic economic development activities. These funds will definitely act as replacements to the significant investment from the outsiders and provides wider scope for public investments. The 75% investments that are directed towards the economic development will improvise the manufacturing economy and indeed increase the per capita income of the United States as well as the competitiveness turning it into a world leader. References 1. MANUFACTURING IN AMERICA - A Comprehensive Strategy to Address the Challenges to U.S. Manufacturers, U.S. Department of Commerce, Washington, D.C., January 2004 2. Kevin L. Kearns and Alan Tonelsony "To Save American Manufacturing", December 02, 2003 3. Joel Popkin and Company, "Securing America's Future: The Case for a Strong Manufacturing Base" 4. Aflicio.org, http:// www.aflcio.org/manufacturing 5. Rockford, "The Manufacturing Alliance of the Rock River Valley (MARRV) and Hamilton Sundstrand announce the presentation of a manufacturing revitalization symposium", February 22, 2006. 6. Findarticles.com, http://findarticles.com/p/articles/mi_qa3908/is_199811/ai_n8827175 7. Upjohn Institute Staff, "Thoughts on American Manufacturing Decline and Revitalization", Working Paper No. 03-96 Read More