Fiscal and debt problems in the euro-zone -- Germany's biggest export market -- are crimping the country's growth. A recent Bloomberg News report noted Germany's exports have been falling as demand has dwindled in neighboring countries. One of the reasons Germany has been active in helping to bail out crisis-prone European Union partners Greece, Spain, and Italy, is because of fears the economic contagion in those nations could spill across its own borders.
I see the efforts to promote manufacturing in Germany as part of the country's response to the transfer of production to lower-cost countries. Local politicians and companies are teaming up to boost manufacturing in the country because of concerns about the possible negative consequences of rising unemployment if manufacturing continues to migrate outside the West. This goal is reflected in the agenda for the World Manufacturing Forum. Here are some of the topics scheduled for consideration. You may draw your own conclusion from these:
Manufacturing -- a solution to the economic crisis?
Why manufacturing is important -- a European view
Living and working in an urban environment
How can policies ensure resource use efficiency?
What does industry expect from policy makers?
Technological solutions supporting resource use efficiency
Are current policies able to guarantee a sustainable use of resources?
Speakers on the various panels are drawn both from government and the private sector and include Herbert Von Bose from the European Commission; Ingo Rust, State Secretary, Ministry for Finance and Economy, Baden-Württemberg; Carlos Costa, Governor of the Central Bank of Portugal; and Göran Ottoson, CEO, LKAB Schwedenerz GmbH.
If Europe is to have a viable future in manufacturing, all these folks will have to join forces. I wonder, though, if they are swimming against the current here. Has China completely cornered the manufacturing economy, meaning the rest of the world must scramble for leftovers? Or is there still a role for high-cost countries like Germany and the United States? I am open to be convinced and will share insight from the World Manufacturing Forum with EBN readers over the next few days. Let me know your particular concerns by leaving comments on this page.
Bolaji Ojo is editor-in-chief of EBN, an EE Times sister site. This article was originally posted on EBN.com.
The west has not given up on manufacturing and can still be competitive in many industries. In fact I thought that I had read somewhere not too long ago that Germany has a positive balance of trade with China?
A hundred years ago many of the headlines coming out of China / Foxconn and the like would have been coming out of the United States. Someday in the not too distant future such headlines will be coming out of some other part of the world.
We may not like what all of this economic evolution is doing. It's pretty nasty for a lot of the people involved, but like it or not, we really don't have much choice. We either find a way to adapt or we watch the world move on from the sidelines.
It seems like the smarter we get, the more we talk about issues and the less we do about them. Manufacturing will not bring back the number of good-paying jobs that we used to enjoy. In order to compete in this country the total cost will need to be less, which means more automation and a few good-paying jobs. Besides, where will the manufacturing expertise come from? Academia, business, maybe we will send our best people to China to be trained. This unemployment and economic malaise is not just a normal business cycle. Unemployment will continue because we are able to produce more than we need with fewer people. Besides, manufacturing would seem to be a controllable part of the business enterprise, but there are so many ways for things to go wrong. In Toyota's case, how hard is it to design an accelerator? My point is, companies don't like things that they don't understand and are suprised by.
I don't think there's any such thing as "completely cornered the manufacturing economy," as if this were a static, one-time event. I think we're dealing with a dynamic mechanism, very simply fueled in the west by the need to minimize production costs.
Companies do not deal with macroeconomics -- governments do. Companies deal in microeconomics only. If company A can make that wigit for less than company B, by offshoring, then it will do so. And that will force company B to do likewise.
The fact that in the macro sense, these two companies are going to reduce demand for their products, by helping to create job loss among their customers, never even figures in their thinking. It can't, really, if they want to stay in business until next month.
What do these conferences even accomplish? Nice words about manufacturing at home won't change the way the CEOs balance their books.
Would be nice to focus these conferences on real things. Such as, can manufacturing automation better be employed to compete against offshore labor? How, or to what extent? Also, what are wages and the standard of living doing in the Asian manufacturing countries? When is the flow of manufacturing to Asia likely to slow down?