The erosion of U.S. manufacturing isn’t a foregone conclusion. The decade ahead—with increased demand, new technology, and value chain optimization—will give the sector a chance to turn around. That’s the conclusion of a McKinsey Global Institute report released in November of 2017, titled “Making it in America: Revitalizing American Manufacturing”.
It quantifies the current state of American manufacturing, and makes recommendations that McKinsey says could boost the beleaguered sector 20% above current trends by 2025. McKinsey calls for increased capital investment, a more robust network of small- and medium-sized suppliers, and a transformative embrace of technologies like digital manufacturing, analytics, and IoT to help create value at different points in the production chain.
In 2010, China displaced the United States as the world’s leading manufacturing country, but the US still ranks second as measured by the dollar value of its annual output and by its global market share. US manufacturing is not what it was a generation ago. Its contraction has been felt by firms, suppliers, workers, and entire communities.
McKinsey says, “It is not hard to find industry success stories and promising initiatives in US manufacturing, but isolated examples have not created broad momentum. Revitalizing the entire sector will require dramatically scaling up what works—and the task is too big for any single entity. Manufacturing needs supportive government programs and policies with long-term certainty and funding. It also needs regional coalitions with everyone at the table: large and small manufacturers, workers, technology experts, educators, public officials, and investors.”
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