Shifting manufacturing

The Economist blog "FreeExchange" had an interesting musing last week on the role of manufacturing in the US -- The end of the revolution is nigh. The "revolution" referred to in the title is the Industrial Revolution. So the piece unfortunately it starts out repeating the myth of the shift to a "service" economy. However, it quickly moves on and ends on the right tone.

America's economic success has come from its dynamic economy, which is able to adapt to the changing global economy. Just as the role and nature of agriculture changed so will manufacturing. America will still continue to make things, but the role of manufacturing in the American economy may look very different. It will probably mean fewer low-skill manufacturing jobs, but that is exactly what the industry needs to survive.

I agree - at least in the general direction. I have often noted that just as industrialization changed but did not eliminate agriculture, the shift to a more knowledge- and information-intensive economy with reshape but not replace manufacturing. Our task is not to keep the manufacturing sector the same as in the past -- but to transform it (see earlier posting). The trick is making sure that we also create enough of the higher paying jobs in manufacturing and related activities to maintain a strong economy and prosperous society.