US manufacturing has been some of the best in the world for decades. It’s one of the reasons this country has maintained its status as the biggest and richest for so long. But its dominance in this area is quickly fading, allowing some of its rivals to catch up.
In the 1990s, manufacturing was the dominant industry in 37 states, a few years ago that number dropped to just 7, and it has been on the decline ever since. Not only is America fading fast, but it’s not even considered to be the best in the industries it has historically controlled.
If you ask the average non-musician to name a quality guitar manufacturer they would likely say Gibson or Fender. And for a time, that was certainly the case, but not anymore. Gibson got a very bad reputation within the guitarist community because they were churning out overpriced under-finished guitars in order to try and save a company that was rapidly advancing towards bankruptcy.
They stopped making good choices and although it pains many experienced guitarists to admit it, they stopped making good instruments. As for Fender, they still make great guitars, but many guitarists prefer Mexican Fenders. They are made to a very similar spec and standard, but they retail for a third of the price.
One of the few major companies that honours the quality that “Made in USA” used to stand for is PRS. But they are far from cheap.
These days, Japan (the home of Ibanez) is considered to be the mecca of quality guitars, while many cheaper—but still high-quality guitars—are being made in South Korea, Mexico and Sweden.
The US used to be one of the most secure nations on earth. Citizens felt relatively safe online. It is the home of the biggest tech companies in history and a legal system that allows you to easily sue from injuries sustained in an incident resulting from negligent security. It holds the bad guys accountable for their mistakes and it limits these mistakes from happening by spending more on cyber security than any other nation.
The problem is that there are as many hackers and fraudsters working against the government as there are officials working for it and many have lost faith in the companies whose job it is to protect everyone. Businesses big and small are turning away from US security companies and looking instead to ones based overseas, with China, the Philippines, Korea and even Russia ending up with a lot of their business.
They charge less for a skill that is pretty much universal and it helps that the news is filled with stories of how Chinese and Korean hackers have outwitted American authorities.
Research and Production
For years now the United States has been pumping fortunes into creating new products, only for China to take their ideas, use them as a foundation and then improve them with their own research. Simply put, they wait for the US to invest most of their budget into getting a product past the early development stage, they take what the US created and then they use all of their own budget to better that product.
This was most notable with drone technology. The US were the ones to come up with the idea and the initial development, but it was China, and Da-Jiang Innovations in particular, that was able to refine these to the point they could avoid all obstacles and perform more efficiently. And the irony here is that Da-Jiang Innovations have been profiting by selling these drones to US companies, because those companies know that the Chinese versions are better and cheaper.
It has been a similar story with technology created for smartphones, computers and televisions, tech that the US paid all the money to create but eventually lost to China and Japan.
The problem here, however, is not that these other companies are unscrupulous, but that they are more efficient. They work more closely with private companies who can actually use the tech they create, essentially making a direct connection with the manufacturing industry to ensure they are optimized at the point of concept and are instantly commercialized for profit. It’s something China has perfected and something that has helped to make Japan a world leader in technology manufacturing, but something that the US has struggled with.
Americans love a little self-deprecating humour and you see a lot of that with cars. They love their cars, they are proud of their brands, yet they still make jokes like, How do you improve a Ford Focus? Put a Toyota engine in it (courtesy of The Best Jokes website).
It’s an American joke about an American car based on the premise that you can improve it by putting a Japanese engine in it. It speaks volumes for the issues with this industry in the US. On the one hand we rave about “real American” manufacturers like Cadillac and Chevrolet and we shed a tear when we hear about the decline of General Motors, but on the other hand we mock American-made cars for being considerably less reliable than foreign cars, and we buy more Hondas, Toyotas and Nissans than we do any American brands.
This is an industry that was born in Detroit, a city that would later power a country. It’s one that is close to every American’s heart, but the truth is that we just don’t have anything on Japanese or German manufacturers and probably never will.
The US has taken over from Japan to control the video game industry and along with its domination of the film industry, this has helped to keep the entertainment sector alive in the states. But it won’t last.
Hollywood producers are already changing their films to appeal to the Chinese market, knowing that they stand to make more money in the east than they do in the US. Chinese-made films have yet to truly take hold in the US, but if China continues to earn more for American-made films than America does, then it will surely be a matter of time.
Warcraft is a great example of this. It’s a huge special effects production filled with US stars and based on a game that has been popular in the west for years, yet it made seven times more money in China than it did in the US during its first five days at the box office. China actually saved this film from being a huge financial flop and turned it into a profitable one, the result of which was a huge surge in the Chinese film industry, with plans to double the amount of screens and potentially the amount of profit.
Video games could easily go the same way. The Chinese love them, as the success of Warcraft showed, but consoles were banned in the country up until 2015, severely limiting the chance this industry had of succeeding. Its PC game sector still managed to profit to the tune of $6 billion a year and with consoles now selling there too, it will be a matter of time before it makes more sense for producers to make their games in China rather than the US.
The post The Industries Where America Isn’t as Dominant as It Once Was appeared first on Home Business Magazine.
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