Reading Make It in America, Chapter 1 The Rise and Fall

A few months ago, we started to read more about a book with some strange peripherals. For one, the book advocated strengthening American manufacturing, a sector thought dead by many. Secondly, the author, Andrew Lieveris, was an Australian arguing for American investment in advanced manufacturing. Finally, Make It in America is penned by the CEO of Dow Chemical, one of the largest companies in this country. We decided to read the book and share our thoughts on its connections to urban manufacturing.

The first chapter, tells the story of Amazon's Kindle and the company's difficulty in manufacturing the device in the United States. This opens the door to talk about how the economic trajectory in the US led people away from careers in manufacturing and toward the service sector. Liveris makes an argument that the multiplier effect of manufacturing is much greater than that of the service sector, meaning that $1 of GDP from the manufacturing sector supports an additional $1.40 in other sectors while the same dollar spent in the service sectors generates only an additional $0.71 of additional output. If any creative economics students out there want to do the research, we'd love to see how the multiplier effects differ between urban manufacturing and suburban manufacturing.

Further, manufacturing drives the innovation sorely needed to remain competitive in a modern global economy. Thus, Liveris contends that we should build an advanced manufacturing sector with a focus on high technology, rather than the basic production of the past. Two points on this for urban manufacturing: 1) We know that cities are existing hubs of innovation. Building those advanced manufacturing centers in urban environments plays on an existing strength. 2) The diversity and richness of cities can support both advanced manufacturing for export and basic manufacturing for local and hyperlocal markets.

As a matter of comparison, he compares the economic fortunes of the UK and Germany, suggesting that Germany's relative strength is a reflection of its investment in advanced manufacturing. From what we've seen, Germany has similarly invested in its cities that had existing strengths in manufacturing (i.e. Leipzig). He recommends that the USA follow the path of Germany rather than that of the UK. "Globally, manufacturing isn't dying. It's evolving."