At one of the companies, at EMC, where I went today -- wonderful company, passed on through generations -- they have hung on with their precision manufacturing, high value added.
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What began as an outsourcing of manufacturing to low cost countries has evolved as China and India have moved up the value-added manufacturing curve.
This is mainly the case in low value added manufacturing sectors.
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Behind this, says Mr Spence, is the trend of American multinationals to keep the highest value-added activities at home while shifting lower value-added activities, such as manufacturing, abroad.
Value added in manufacturing accounted for almost 16% of GDP in 2002, on figures from the OECD, down from 32% in 1970.
The new policy is designed to boost income for the government (though the value isn't known yet) and create better jobs, especially high-tech manufacturing jobs that produce value-added tax revenue--not low-cost textiles.
In Germany, for example, famous for its carmakers and capital-goods exporters, value added in manufacturing in 2002 was not much bigger than in Britain: just under 22% of GDP, down from 36% in 1970.
Low-value-added manufacturing that tends to be more labor intensive are the most likely industries to shift some of their operations outside of the established manufacturing zones within China or move their operations to another country, although that usually entails having to contend with a lack of developed infrastructure and a smaller, less skilled workforce.
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They account for only 6% of non-oil-and-gas exports and 14% of the value added by local manufacturing.
China already dominates both production and capacity at the low-value-added assembly end of manufacturing.
America is going through the same process of decline and denial that Britain went through in the 1950s and 1960s, the authors argue: rather than freeing people to move to more value-added activities, the loss of manufacturing jobs can lead to the loss of entire ecosystems of innovation.
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In manufacturing, foreign-owned companies accounted for 36% of value added and 27% of employees.
Our calculations are based on the value-added in industry (which extends beyond manufacturing) and the wage bill of urban factories, which does not count the town and village enterprises that employ over two-thirds of China's metal-bashers.
They also missed the potential added value to customers that could be generated by designing and manufacturing things differently.
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With the exception of the recession of 08-09, when all U.S. economic sectors took a hit, U.S. manufacturing has been breaking its own record, year after year, with respect to output, value-added, profits, returns on investment, exports, and imports.
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