Over the years, different countries have led the world in manufacturing. Interestingly enough, China was the leader in global manufacturing in the early 19th century, producing about a third of the world’s output. India was second with a quarter, and Russia a distant third with 5 percent. Britain’s share was under 2 percent.
Since then, China dropped sharply to only about 5% of the total and Britain became the leader in the late part of the 19th century with 20% of the total. Then in the early 20th century, Britain’s share dropped and the U.S. took over the lead, which by 1950 had climbed to over 40%. Now, China is back, having a slight lead over the U.S. at about 20%, and many other countries, such as Germany, Japan, South Korea, and Brazil are playing a major role. He mentions that in 2010, 41% of the world’s production took place outside of the conventionally defined “developed” nations.
Historically, China went through a long slump in manufacturing, and is now rapidly increasing its global role. The U.S., for a number of reasons, is going in the opposite direction. But overall manufacturing in the world is increasing, so the overall share a country may have does not tell the whole story. Even though manufacturing levels are now down due to the economy, in general manufacturing in the U.S. has continued to increase, even though it has a lower share than in the past and is changing its nature (more automation and global involvement). Marsh feels that in the long run, manufacturing output is somewhat related to population, and that China, India, and other developing countries will continue to increase their global position, although less rapidly than in the past few years. But he feels there will be plenty of room for manufacturing in the presently “rich” countries.
Marsh sees major changes in the processes of manufacturing and the nature of products in the future. He sees not only mass customization, but more individualization of products, more mechanization of production, and new types of hybrid businesses and closer relations between companies in “rich” countries, and companies in “poor” ones, since each have unique strengths and goals. He sees a continued increase in globalization, and increasing specialization between companies that do mainly research and design and those that focus on production. He points to companies such as Apple and Cisco, that contract out their production, except for prototypes for use in design and testing, and companies such as Foxconn, that specialize in production. But he acknowledges that all companies will seek to add more value by moving toward product ownership through owning intellectual property and hiring increasingly sophisticated people.
Although, like many, Marsh is excited about flexible manufacturing and customization of products, I was happy to see that he admits that this is not the answer for all products. In the 1940’s and 50’s, much effort was put into the standardization of products. This was not only to take advantage of mass production, but also to make products easier for people to use. We seem to be losing sight of this with our present products and our emphasis on innovation.
Products are to serve us, not challenge us. One of my favorite radio stations in our area just changed frequencies. I am not enjoying changing the presets (buttons) in the receivers I own, because each requires a different ritual. I am not impressed by the designers who undoubtedly thought they had a cleverer way to do so. One of my friends recently mistakenly turned off the sound on his cell phone, and could not figure out how to turn it back on. Although it was a strange phone, I volunteered to help him. This took much longer than it should have, since his phone has a very different menu layout than mine. As a consumer, my life would be easier if, displays and maintenance and operating procedures were standardized as much as possible, even though the producers might have to give up a bit of their individuality. But I look forward to more customization of “off-the-shelf” bicycles.
I will talk a bit more about Marsh’s projections for the future of manufacturing in my next post, but again, I think his book is a good general read for anyone. It is published by Yale University Press.