Entrepreneurial Observations . Copyright Wburnett LLC, 2016

A Matter of Facts or Facts Don’t Matter “One of the factors driving this economic devastation is America’s disastrous trade policies. Throughout history, at the center of any thriving country has been a thriving manufacturing sector, but under decades of failed leadership, the United States has gone from being the globe’s manufacturing powerhouse — the envy of the world — through a rapid deindustrialization.” - Donald Trump Donald J. March 14, 2016 USA Today editorial employment in manufacturing as a share of total employment has fallen dramatically in the world’s most advanced economies, a phenomenon widely referred to as "deindustrialization."

A Matter of Facts or Facts Don’t Matter “One of the factors driving this economic devastation is America’s disastrous trade policies. Throughout history, at the center of any thriving country has been a thriving manufacturing sector, but under decades of failed leadership, the United States has gone from being the globe’s manufacturing powerhouse — the envy of the world — through a rapid deindustrialization… of the workforce - Donald Trump Donald J. March 14, 2016 USA Today editorial employment in manufacturing as a share of total employment has fallen dramatically in the world’s most advanced economies, a phenomenon widely referred to as "deindustrialization."

USA Manufacturing Source: Federal Reserve Economic Data Source: U.S. Bureau of Labor Statistics

USA Manufacturing Source: Federal Reserve Economic Data Source: U.S. Bureau of Labor Statistics

Should Policy Reflect Reality Employment in manufacturing as a share of total employment has fallen dramatically in the world’s most advanced economies. The trend, particularly evident in the United States and Europe, is also apparent in Japan along with Hong Kong, China, Korea, Singapore, and Taiwan Advances in the service sector, rather than in the manufacturing sector, are likely to encourage the growth of living standards in the advanced economies in the future, leading, inevitably, to advances in service productivity as well. https://www.imf.org/EXTERNAL/PUBS/FT/ISSUES10/INDEX.HTM

Production Jobs Unlikely to Come Back The decades-long decline of U.S. manufacturing employment is an unmistakable source of the working class rage that helped get Trump elected. The the highly automated nature of the manufacturing sector’s recent revitalization is the main reason Trump won’t be able to “make America great again” by bringing back production jobs. Mark Muro Senior Fellow and Policy Director Brookings Metropolitan Policy Program

It’s not just the USA, it’s global! Source: The World Bank Group

It’s a different type of job today Manufacturing Employment, all employees (Nov 2016) 12.2 M Manufacturing production/nonsupervisory employees 8.6 M November Manufacturing Unemployment 3.9% ≈ 476,000 jobs Number of open positions highest in 15 years, with many workers not possessing skills to do today’s jobs For example, Indiana’s Carrier plant where 1400 workers were set to lose their jobs, Boeing Company in Seattle was offering $35 per hour for skilled tool and die makers and electricians, plus would help with relocation. Unfortunately, only about 60 of Carriers workers would qualify for Boeing jobs. Most Carrier workers are assembly line workers with no special skills and only a high school education.

Bottom Line Broadly trade enables both trading countries to become wealthier. Shifts in the economy occur both domestically, and globally and will always impact some jobs. Protecting some jobs, at the expense of the well-being of the nation as a whole, is a choice of policy. Fair trade advocates focus on the wages and working conditions of labor in developing markets. Fair Trade is about 1. moving small family from income insecurity and poverty to economic self-sufficiency and ownership (targeted mainly at the souther hemisphere). 2. Fair trading practices - transparency in commercial relations 3. Concern for the social, economic and environmental well being of marginalized small producers. e.g. Payments are made as agreed 4. Locally acceptable fair price. 5. No child or forced labor 6. No descrimination and freedom of association 7. Good working conditions 8. The trading organization develops the skills and capabilities of its own employees 9. Greater justice through fair trade 10.Respect for the environment

Services vs Manufacturing Services Innovations are realized through organizational change Manufacturing Innovations are primarily in product and process.

Services vs Manufacturing Services Innovations are sourced from customers. Manufacturing Innovations are sourced from employees.

Employees as Innovators Innovation is a voluntary contribution by employees. Employees need to feel both motivated to contribute innovations, and free from risk in doing so. Best companies do this. Morining Star Tomato Johnsonville Sausage Motorola (back in the day) Google Semco

Focus on Needs Operating System designed specifically for manufacturing. Creating tools to focus on creating productivity gains in service industries. Going international