This morning I heard distinguished speakers once again repeat a questionable statement: that green technology will save American manufacturing.
Why do people think that the US is going to walk into the world market and outcompete everyone in a technology that is wide spread – and where, in some case, we are already behind?
Of course to revive manufacturing we will need to make products that the rest of the world wants to buy. Of course hybrid/alternative fuel vehicles and green technologies are important for both economic and environmental reasons.
But the ultimate question is not just what we make. It is how we make things. If we don’t change how we make things, all the green technologies we developer here in the US will be end up being made elsewhere. That is a topic that some on Capitol Hill and elsewhere are focusing on (see earlier posting).
Part of the answer to that question is production costs. And part of US production costs are health case costs. Solving the health care cost issue will help solve the manufacturing.
Another part of the answer is the production process (and issue of productivity). The production process has changed over the past few decades. It has become more knowledge and intangible intensive. It has become more collaborative. The old categories of manufacturing and services are becoming fused (see earlier posting).
On the issue of collaboration, new technologies (i.e. cloud computing and virtual worlds) and organizational structures are driving the changes. As we argued in Virtual Worlds and the Transformation of Business:
Government policy should focus on the fact that the U.S. will compete based on its ability to develop collaborative skills, not traditional business skills. Innovative policies should help corporations bring in social networking practices. Changes in the tax code could encourage investment in collaboration skills, networks of collaborative enterprises, and a new collaborative infrastructure. The federal government and states should also promote policies to promote faster development of cloud computing, scalable data storage, and open networks. They should also develop innovative training programs that educate businesses and employees about how to use collaborative technologies and integrate them into traditional disciplines.
In other words, we need a policy built on the new realities of the production process.