The Impact of Manufacturing

From The New Industrial Revolution: Consumers, Globalization and the End of Mass Production by Peter Marsh - -

"The impact of manufacturing is manifested most graphically by economic data that compare what has happened in the world of making things with overall economic activity over the past two centuries.  Between 1800 and 2010, global manufacturing output rose by an annual average of 2.6 per cent.  This is well above the comparable 2 per cent annual increase in gross domestic product - measuring the productive effort of the entire global economy - over the same period.  It is also three times higher than the comparable 0.9 per cent average yearly rise in global population.  Between 1800 and 2010, output per worker in manufacturing increased by an average of 1.7 per cent per year.  Over the same period, the rate of increase of global gross domestic product per person - rose by just 1.1 per cent annually.  The figures indicate that output per person in manufacturing - representing productivity - has risen substantially more than living standards.  In other words, manufacturing has made itself more efficient at a rate above what has happened elsewhere in the economy.  As a result, prices of manufactured goods have tended to decline, at least in relation to costs in other parts of economic output.  At the same time, their sophistication has gone up.  This is another manifestation of the manufacturing experience curve, explaining how costs fall as experience, or learning, rises."

This is one of the very best books I have read on manufacturing.  We truly have entered a new industrial revolution - - the impacts are just starting to be felt.  Marsh explains the manufacturing employment fallout perfectly:

"Between 1900 and 1980, manufacturing employment in rich countries rose more than threefold to reach 71.5 million.  But from 1980, employment dropped by almost 7.5 million to 63.9 million in 2000.  After this came a still deeper decline, with the number of jobs plummeting 12.8 million by 2010 to 5.1 million, a 20 per cent fall.  The job reductions happened as Western manufacterers went to still greater lengths to make themselves more efficient and competitive."