Apple Again
After reading my previous post on Apple, John Austin, of the State Board of Education and the Brookings Institution, sent me a terrific study. Its from the Personal Computing Industry Center at the UC Irvine. Its topic is job creation generated by the iPod. It is one of the best articles I have seen on how products are made in a flat world.
What the researchers found is that the introduction of the iPod created 41,000 jobs worldwide. (These are direct jobs – no trying to calculate multipliers.) Of those about 27,000 were outside the US, 14,000 here. But when it came to wages the proportions were reversed: $753 million earned by US workers, $318 million by workers from outside the US. You know the basic story: production done in Asia by low wage workers, knowledge work predominantly done in the US, retail done across the globe. Of the 14,000 US iPod jobs 6,000 were high paid engineers and other professionals, while about 8,000 were lower paid jobs in retail and other non professional occupations.
As I wrote in my previous posts about Apple and Bissell this is the new face of manufacturing in America (and other advance economies). Some products will continue to made in America. But increasingly by machines. About ten percent of American workers now work in a factory and it almost for sure will not go higher, most probably lower. But what America can be is the pre and post production center of manufactured goods. Everything from research, development, engineering, design, supply chain management, logistics to marketing, sales and service. These are the new high paid jobs. Where the 21st Century middle class will be centered. It will be the predominant way America exports to the rest of the world.
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You mentioned that some manufacturing would remain in the United States, but would be done mostly by machines. Could some of those jobs evolve into the highly skilled variety requiring a college degree? In addition to the research and development, could we see a significant amount of manufacturing remain here if manufacturing workers became more educated and more productive. I could see highly automated factories, still producing large amounts of goods. But these factories would be staffed by much fewer workers most of whom would have degrees in engineering, operations management or computer science to enable them to use sophisticated, highly productive, computerised machinery. Manufacturing would no longer need large numbers of low skilled workers, but it would need a moderate number of highly educated knowledge workers.