Winter 2014 Journal of Economic Perspectives’ Symposium on Manufacturing: US Manufacturing: Understanding Its Past and Its Potential Future

THURSDAY, FEBRUARY 6, 2014

Winter 2014 Journal of Economic Perspectives is Live!

The Winter 2014 issue of the Journal of Economic Perspectives is now freely available on-line, courtesy of the publisher, the American Economic Association. Indeed, not only this issue but all previous issues back to 1987 are available. (Full disclosure: I’ve been the Managing Editor since the journal started, so this issue is #107 for me.) I’ll probably blog about some of these articles in the next week or two. But for now, I’ll first list the table of contents, and then below will provide abstracts of articles and weblinks.

Symposium: Manufacturing
US Manufacturing: Understanding Its Past and Its Potential Future
Martin Neil Baily and Barry P. Bosworth
The development of the US manufacturing sector over the last half-century displays two striking and somewhat contradictory features: 1) the growth of real output in the US manufacturing sector, measured by real value added, has equaled or exceeded that of total GDP, keeping the manufacturing share of the economy constant in price-adjusted terms; and 2) there is a long-standing decline in the share of total employment attributable to manufacturing. The persistence of these trends seems inconsistent with stories of a recent or sudden crisis in the US manufacturing sector. After all, as recently as 2010, the United States had the world’s largest manufacturing sector measured by its valued-added, and while it has now been surpassed by China, the United States remains a very large manufacturer. On the other hand, there are some potential causes for concern. First, though manufacturing’s output share of GDP has remained stable over 50 years, and manufacturing retains a reputation as a sector of rapid productivity improvements, this is largely due to the spectacular performance of one subsector of manufacturing: computers and electronics. Second, recently there has been a large drop in the absolute level of manufacturing employment that many find alarming. Third, the US manufacturing sector runs an enormous trade deficit, equaling $460 billion in 2012, which is also very concentrated in trade with Asia. Finally, we consider the future evolution of the manufacturing sector and its importance for the US economy. Many of the largest US corporations continue to shift their production facilities overseas. It is important to understand why the United States is not perceived to be an attractive base for their production.
Full-Text Access | Supplementary Materials

Competing in Advanced Manufacturing: The Need for Improved Growth Models and Policies
Gregory Tassey
The United States has underinvested for several decades in a set of productivity-enhancing assets necessary for the long-term health of its manufacturing sector. Conventional characterizations of the process of bringing new advanced manufacturing products to market usually leave out two important elements: One is “proof-of-concept research” to establish broad “technology platforms” that can then be used as a basis for developing actual products. The second is a technical infrastructure of “infratechnologies” that include the analytical tools and standards needed for measuring and classifying the components of the new technology; metrics and methods for determining the adequacy of the multiple performance attributes of the technology; and the interfaces among hardware and software components that must work together for a complex product to perform as specified. If the public–private dynamics are not properly aligned to encourage proof-of-concept research and needed infratechnologies, then promising advances in basic science can easily fall into a “valley of death” and fail to evolve into modern advanced manufacturing technologies that are ready for the marketplace. Each major technology has a degree of uniqueness that demands government support sufficiently sophisticated to allow efficient adaptation to the needs of its particular industry, whether semiconductors, pharmaceuticals, computers, communications equipment, medical equipment, or some other technology-based industry.
Full-Text Access | Supplementary Materials

Management Practices, Relational Contracts, and the Decline of General Motors
Susan Helper and Rebecca Henderson
General Motors was once regarded as the best-managed and most successful firm in the world. However, between 1980 and 2009, GM’s US market share fell from 46 to 20 percent, and in 2009 the firm went bankrupt. We argue that the conventional explanation for this decline—namely high legacy labor and healthcare costs—is seriously incomplete, and that GM’s share collapsed for many of the same reasons that many highly successful American firms of the 1960s were forced from the market, including a failure to understand the nature of the competition they faced and an inability to respond effectively once they did. We focus particularly on the problems GM encountered in developing the relational contracts essential to modern design and manufacturing, and we discuss a number of possible causes for these difficulties. We suggest that GM’s experience may have important implications for our understanding of the role of management in the modern, knowledge-based firm and for the potential revival of manufacturing in the United States.
Full-Text Access | Supplementary Materials

 

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: