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May 11, 2020 06:44 pm

Why America Can Make Semiconductors But Not Swabs

U.S. factories are as productive as ever but they've lost the process knowledge needed to retool quickly in a crisis, writes Dan Wang, a Beijing-based technology analyst at Gavekal Dragonomics, in an opinion piece on Bloomberg. From the story: In China, a vast pool of experienced engineers and a culture of nimble manufacturing have allowed companies to quickly shift production to critically needed goods during this crisis. Manufacturers such as BYD Co.(an automaker) and Foxconn (an electronics assembler) have helped to quadruple China's mask production since the beginning of the pandemic. Taiwanese companies, which make machine tools and can draw on deep pools of manufacturing expertise, were reportedly able to increase mask production tenfold. Learning to build again will take more than a resurgence of will, as Marc Andreessen would have it. And the U.S. should think of bolder proposals than sensible but long-proposed tweaks to R&D policies, re-training programs and STEM education. What the U.S. really needs to do is reconstitute its communities of engineering practice. That will require treating manufacturing work, even in low-margin goods, as fundamentally valuable. Technological sophisticates in Silicon Valley would be wise to drop their dismissive attitude towards manufacturing as a "commoditized" activity and treat it as being as valuable as R&D work. And corporate America should start viewing workers not purely as costs to be slashed, but as practitioners keeping alive knowledge essential to the production process. The U.S. government has a crucial role to play. Bills winding through in Congress to re-shore some of the medical supply chain should be only the start. For too long, tax laws have encouraged offshoring; it's time for political leaders to remove the excuse for manufacturers not to bring production back home.

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