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Evolution: aerospace manufacturing, the U.S. economy, and MIT’s role By Olivier de Weck In 1989, MIT published the influential book “Made in America —  Regaining the Competitive Edge.” The book discussed the need for American industry to increase industrial productivity to better compete with international firms. At that time, Japan was successfully importing high-quality low-cost products in the automotive, semiconductor and consumer electronics sectors in the United States, and was rapidly gaining market share. The data, conclusions, and recommendations in the book were the result of a monumental three-year effort by the MIT Commission on Industrial Productivity. The response to the book was vigorous. It led to follow-on efforts such as implementing lean manufacturing techniques in many U.S. firms, increasing the output per worker; improving product design; and generally raising American manufacturing firms’ performance levels. Despite these successes, today, many of the same issues persist, and, despite gains in the 1990s, there has been a precipitous decline in the U.S. manufacturing labor force, especially since the year 2000. Overall manufacturing output value-added in the United States is still about $2 trillion per year and has also declined, but less dramatically. In part, the decline in the manufacturing laborforce is due precisely to the gains in productivity that had been called for in the 1989 report, but — and there is little controversy among economists about this point — much of the decline resulted from off-shoring of U.S. manufacturing activities to lower wage countries such as China and Mexico. Lower wage costs are not the only factor responsible for offshoring, others include better access to emerging markets, lower corporate tax rates, and targeted incentives and industrial policies by emerging producer countries. Evolution: Aerospace manufacturing, the U.S. economy, and MIT’s role 53

AeroAstro Annual 9

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