Manufacturing Is Not THE Answer to Increasing US Economic Competitiveness

There is an old an adage in the halls of the Pentagon that goes “Defense is always fighting the last war”. In other words, after a military engagement is finished DoD attempts to restructure itself so that its capabilities are more effective for the last engagement. This is an adage that is very true in the history of DoD and today many in DoD work very diligently to ensure that it is no longer true.

In many ways when it comes to rebuilding America’s economic competitiveness, many have fallen prey to this time old adage. And as DoD has found on repeated occasions, fighting the last war can be very deadly for the military and the country.

The US has divested itself, both by design and by default, of its manufacturing base creating a weakness that China and others have exploited for a competitive advantage. This weakness has now been exploited to the level that its adverse impact on the economic health of the US is so pronounced, that it can no longer be denied by anyone except the most nave or out of touch pundits.

In response, there is a growing call-to-arms across the US private and public sector to rebuild the US manufacturing base to its past glory. The strongly inferred, but not always stated premise is that rebuilding the US manufacturing base is guaranteed to rebuild America’s economic health– in other words the manufacturing base of a country is the foundation of a country’s economic competitiveness.

It is the case that the Chinese saw and exploited the weakness presented by America’s declining manufacturing base but by just removing this US weakness does not equate to a US strength–it just eliminates a US weakness that could be exploited by China and others for a competitive advantage. In effect, removing the US weakness by rebuilding the US manufacturing base is just fighting the last war.

With this US weakness eliminated, China and others will just shift the fight to another battlefield.

To rebuild the economic health of the US we must acquire and maintain a competitive advantage, not just eliminate a US weakness that provides China with the opportunity to acquire a competitive advantage relative to the US. Rebuilding the US manufacturing base can eliminate the US weaknesses so that it can no longer be exploited by China or others to the detriment of the economic health of the US, and it is the case that the US manufacturing base could be rebuilt in a manner that provides the US with a competitive advantage and thereby increase the economic health of the US. But, contrary to what is being maintained in the press and by a growing number of experts, the US manufacturing base is not the foundation of America’s economic competitiveness–the exploitation of technology is the foundation of America’s economic competitiveness as well as the foundation of all of our competitors’ economic competitiveness.

To rebuild America’s economic competitiveness, and thereby the country’s economic health, and not just eliminate a weakness or build a limited fleeting competitive advantage in one area, we must out maneuver our competitors in the exploitation of the worldwide technology which is the foundation of all competitive advantage.

The problem is that at the end of World War II, decision-making in the US for the most part, abandoned technology-based planning and adopted economic-based planning. In economic-based planning the foundation of all decision-making is the effective utilization of the funds to accomplish a function where, within a company in most cases, the function is to maximize profits. In other words, the funds are what are being manipulated and the measure of success is how efficiently the funds have been manipulated. Adoption of economic-based planning is the root cause of America’s loss of its manufacturing base.

In contrast, in technology-based planning the foundation of all decision-making is the effective acquisition and utilization of the technology to generate a competitive advantage. It is the technology not the funds that are being manipulated as the foundation of decisions. Keeping in mind that technology is correctly defined as any application of science to accomplish a function.

The problem is that after the US adopted economic-based planning after WWII, the rest of the world continued using and refining technology-based planning. China and India have been using highly refined, very aggressive technology-based planning to rapidly transform their perspective countries into economic superpowers.

Within the US intelligence community under the Reagan administration, I directed a program the Socrates Project, that determined that the underlying cause of America’s declining economic competitiveness was the country’s switch from technology-based planning to economic-based planning. The Socrates Project also developed a highly advanced form of tech-based planning–automated innovation–that would enable the US and all its private and public organizations to consistently out maneuver all competitors worldwide in the acquisition and utilization of technology to acquire and maintain the maximum competitive advantage.

So instead of the US just eliminating the present weakness caused by the country’s waning manufacturing base, the US and its organizations would be in a position to be the dominant competitor in all present and future industries—to include manufacturing.

Michael Sekora

Past Director of Socrates Project under President Reagan where sources of US declining competitiveness were determined and required solutions developed.