Reindustrialization: From Shoes to Ships to Sealing Wax

Abstract

The continuing shrinkage of the American industrial base has led to impediments to technological innovation, which consequently threaten the nation's international competitiveness and thus its living standard. The deindustrialization of the United States is examined, and the pivotal role that robotics can play in the reindustrialization of the country is discussed. A thorough quantitative investigation of the use of robotics for this purpose by a panel of experts is recommended. Key Words: Deindustrialization; Reindustrialization; Robotics; American manufacturing; High-tech manufacturing. Early in 2009 the FootJoy Company shut down its plant in Brockton MA, marking the closure of the last shoe factory in a city that once produced more than half of the shoes worn in America. Except for a few specialty footwear types, America now imports all its shoes from abroad. But shoes are merely one example of the demise of American manufacturing. From clothing to can openers, from screwdrivers to sewing machines, instead of producing goods within the country, the American economy has eliminated domestic factories, and a high fraction of the nation's goods are now purchased from foreign sources. America's manufacturing base, the foundation of its prosperity for most of the 20th century, has consequently dwindled away as the country has deindustrialized. As a result, since it now exports far less than it imports, the nation pays for its imports by borrowing huge sums from abroad. Years ago the leaders of American commerce recognized that they could realize large cost savings by importing goods from low-wage countries instead of utilizing domestic production. Their actions have indeed improved their companies' bottom lines, and have provided consumers with a large variety of inexpensive goods. However, it is widely understood that these advantages are accompanied by two serious disadvantages: First, widespread unemployment is caused by the loss of well paid factory jobs, including jobs requiring high levels of skill and education. Second, the country's huge foreign debt makes it economically and politically vulnerable, and in any case the continuing increase in foreign indebtedness is unsustainable. These problems seem to have temporarily faded into the background because of the devastating financial crisis now faced by the nation and indeed by the entire world. The resolution of this crisis will be painful and will take time, but the deep recession will surely end, and the financial markets will finally recover. But when stability returns America will again face-probably with increased urgency-the problems associated with the deindustrialization of the country. How can these deep-seated problems be resolved? It is often assumed that American innovation and traditional entrepreneurial spirit will save the day by restoring its competitiveness, thereby allowing the country to pay its way in the world. In this scenario large quantities of imported low-tech goods will be balanced by the export of unique high-tech, high-value products. Indeed, it is universally recognized that the ability to compete in the global industrial marketplace requires continual aggressive technology innovation; so should not American technological prowess give a major competitive advantage, and should not America continue to be far and away the world leader in technology innovation, from computer hardware and software to space exploration, from nanotechnology to genetic engineering? Unfortunately these assumptions, which underlie the high-/low-tech balance scenario, are unsupported by the facts. American exports of high-tech goods and services have not, in fact, been enough to pay for its imports. Even worse, since 2002 the high-tech account balance has been negative, i.e., America now actually imports more high technology than it exports.1 It is illusory to think that the country has a monopoly of bright, innovative technical minds, and that other nations cannot create