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Measuring New York State’s Manufacturing Capabilities

Written by: Steve Melito, Industry Blog Writer for FuzeHub

Image Credit: World Economic Forum
Image Credit: World Economic Forum

In The Future of Manufacturing: Driving Capabilities, Enabling Investments, the World Economic Forum analyzes trends in global manufacturing from a value chain perspective. This 40-page report asserts that although developed countries have seen significant declines in manufacturing employment, improvements in manufacturing capabilities have “counterbalanced” this trend.
As evidence, the report’s authors cite the resurgence of the U.S. apparel industry. In the past, clothing manufacturers focused on competitiveness, which emphasizes cost reductions. Today, the emphasis is on capabilities instead. Because the apparel industry is in an “advanced stage” of economic development, innovation and added value are now the key differentiators between places like New York and Nanjing.
Global value chains (GVCs) are “relatively standardized”, the report continues, and are therefore “subject to lower economic returns”. For developed countries then, pre-production capabilities such as research and development and post-production capabilities such as marketing and logistics can provide “relatively high levels” of added value.
Finally, the World Economic Forum report proposes creating a Global Manufacturing Capability Indictor (GMCI) that would assess national manufacturing abilities from conceptualization to fabrication to logistics. Developing countries continue to capture the majority of manufacturing job growth, but they lag behind Germany, Japan, and the United States in capabilities-based performance.
If the World Economic Forum developed a capabilities index just for the U.S., how would New York compare to states that have higher rates of manufacturing job growth, but that deliver less added value? Would such a study provide a more accurate picture than other measures, which focus mainly on employment?
Read original story: The Future of Manufacturing: Driving Capabilities, Enabling Investments
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