Manufacturing has long been an important part of the American economy. Often, experts link the success in the manufacturing industry to how well the economy is doing. What makes it so important?
1. The path to development
Over the years, manufacturing has become the key to development for many countries. Nations that have created a high-quality manufacturing sector have done so to develop national wealth and power.
2. The foundation of global “Great Power”
The countries that are considered the “Great Powers” not only produce more goods, they build the machinery that makes the goods. They gain considerable strength by controlling the means of production.
3. The most important cause of economic growth
When technical improvements are made within the manufacturing sector, it drives economic growth. As these machines advance, so does the society and the economy. It makes sense, that when the manufacturing sector is doing well, so is the economy.
4. Global trade is based on goods
When it comes to world trade, 80 percent is merchandise trade, while only 20 percent is services. Countries in need of goods can’t trade services for most of their needs. This lowers the value of their currency and their overall economic status.
5. Services depend on manufactured goods
A majority of services include selling or using manufactured goods. Services such as real estate, are all about selling and purchasing a manufactured good. Without manufactured goods, it’s hard to have a variety of services.
6. Creates jobs
Most jobs depend on manufacturing in some way. Each manufacturing job supports, on average, three other jobs according to the Economic Policy Institute.
Thriving, powerful nations have built themselves up using manufacturing and creating the machines for the industry. That’s why manufacturing has become so important in the American economy, and continues to be a huge sector for jobs, exports and more.