Should Americans make stuff? Do we really need to ask?

John Henry. Paul Bunyan. Rosie the Riveter. Many of the American icons of the past have something in common: they made things. And for a long time, the rest of the country followed suit, becoming the world’s leading producer of manufactured goods throughout the 20th century.

Rosie the RiveterToday, the story has changed. Manufacturing jobs are increasingly being outsourced—and not just because other countries offer cheaper labor. Positions requiring both high and low skilled workers have flowed steadily out of the country for the last few decades, to the point that China and Germany have recently surpassed the U.S. as the world’s top exporters.

An argument can be made that there is nothing fundamentally wrong with having less domestic manufacturing. Indeed, American corporations like IBM are often applauded for transitioning from manufacturing to services because of the opportunity to earn higher profit margins. This sentiment is even more visible at the level of individuals: doctors, lawyers and movie stars are among the wealthiest members of society, even though they don’t make anything tangible. If providing services works for individuals and corporations, it would seem that the U.S. could likewise pay its bills (and then some) as a global service provider in return for manufactured goods.

But that argument is incomplete and gets it plainly wrong: it is crucial for America to remain a global manufacturing leader. The problem is that while having healthy software and financial services industries may give us the next Google or Facebook, they won’t give us the next Internet. Manufacturing drives technological innovation, to the extent that two-thirds of private-sector R&D investment comes from manufacturing companies. If America wants to continue to develop cutting-edge technologies—the kinds that create new industries and generate demand for new services—we need to start by supporting our manufacturing capabilities.

Examples of industries where America has lost ground in both manufacturing and innovation include laptop computers, solar cells, flat panel displays, and lithium-ion batteries. Even technologies that were originally developed here are being produced and improved elsewhere, so American firms must play catch-up to compete. Not only does this diminish our innovation opportunities but also hinders job growth and is a threat to our national security.

The bottom line is that America’s economic future is not secure if we rely on other nations to invest in our service offerings, especially if we continue to lose our innovative edge.

Tesla roadster

The U.S. no longer leads the world in automobile production, but perhaps a breakthrough in zero-emissions vehicles will give us a second chance

To help rekindle our manufacturing sector, the White House recently announced the Advanced Manufacturing Partnership, a $500 million program that will fund research into high-tech manufacturing at six of the nation’s top scientific institutions (UC Berkeley included). The funding will largely be applied towards high-risk, high-reward projects such as biomanufacturing, nanoscale medical devices, low dimensional carbon materials and flexible electronics. The program is one of a series of recommendations by the Presidential Council of Advisors on Science and Technology, which, in addition to providing funding for research projects, seeks to stimulate manufacturing growth through tax policy, infrastructure, and education.

All of this means our heroes of the past need a bit of a makeover. Rather than John Henry building tunnels for steam railways, his job is now to oversee the adoption of high-speed train lines and zero-emission vehicles. Rather than Paul Bunyan chopping down trees to build timber frame homes, he is now trying to discover nanotechnology-enabled building materials for smart homes. And rather than Rosie the Riveter piecing together World War II bombers to drop nuclear weapons, she now aims to build aircraft from ultra-light carbon-based materials and use nuclear physics to generate electricity in a clean, safe manner. The good news is that we’re off to a good symbolic start: the factory where the real life Rosie the Riveter once worked was recently converted into offices for Sunpower Corporation, a leading U.S. solar manufacturer.