jbooma Posted August 12, 2004 Share Posted August 12, 2004 Starting about maybe 5 to 10 years ago we started to change american economy. What I meant by this is we are going away from a manufacturing economy to a service one. This why you see a lot of people who are losing jobs in factories, and why they are closing. This process will take about 10 to 20 years maybe longer to be completed, and it is for the good of the nation in the long run. Because of this you will see many more resturants popping up and places that are there to serve the customer, not build something for the customers. It is more prevalent now in big cities, but soon will reach out everywhere. Link to comment Share on other sites More sharing options...
SnyderShrugged Posted August 12, 2004 Share Posted August 12, 2004 Originally posted by jbooma Starting about maybe 5 to 10 years ago we started to change american economy. What I meant by this is we are going away from a manufacturing economy to a service one. This why you see a lot of people who are losing jobs in factories, and why they are closing. This process will take about 10 to 20 years maybe longer to be completed, and it is for the good of the nation in the long run. Because of this you will see many more resturants popping up and places that are there to serve the customer, not build something for the customers. It is more prevalent now in big cities, but soon will reach out everywhere. This is true, but there are some concerns with the impact on GNP. It means we will move away from producing something on hand that can sell to offerring a semi-intangible purchase that could be easily avoided by doing it themselves (like I do when I cange my oil rather than Jiffy Lube) Just something to think about. Link to comment Share on other sites More sharing options...
jbooma Posted August 12, 2004 Author Share Posted August 12, 2004 Originally posted by skin-n-vegas This is true, but there are some concerns with the impact on GNP. It means we will move away from producing something on hand that can sell to offerring a semi-intangible purchase that could be easily avoided by doing it themselves (like I do when I cange my oil rather than Jiffy Lube) Just something to think about. very good point Link to comment Share on other sites More sharing options...
Riggo-toni Posted August 12, 2004 Share Posted August 12, 2004 I'm not even sure where to begin on this one.... We are not seeing the vanishing of our manufacturing base simply because it employs fewer people. That would be analagous to saying our agricultural industry has been wiped out because fewer people work on farms. Back in 1990 when I was getting my Master of International Business, a professor pointed out that Toyota was making half as many cars as GM, but with one tenth the workforce. The shedding of manufacturing jobs has more to do with increased productivity than anything else. (Remember all the record productivity increases in the 90s thanks to greater integration between industries and information technologies.) Productivity gains are also the only way to increase real wages. The most sweeping change in manufacturing now is that US manufacturers are largely "assemblers" as much as they are producers. We make the computer chips, but then import computer casings, memory, etc. from South Korea, Taiwan, etc. Caterpillar is a good example of this. Most of the parts for their tractor equipment are built overseas, while the final assembly (and thus, the greatest value-added portion of manufacturing) occurs here. (This is one reason why W's steel tariffs did so much damage to many areas of heavy manufacturing and cost a net loss of jobs). Lastly, the "information revolution", along with the dizzying array of financial derivatives spawned by its existence, has changed how the overall economy , or more specifically the business cycle, behaves. Barring unforeseen catastrophes, such as 9/11, recessions are not going to run as deep, nor will recoveries be as brisk, because companies can far better forecast inventory needs and protect themselves against fluctuations in the cost of capital. Link to comment Share on other sites More sharing options...
jbooma Posted August 12, 2004 Author Share Posted August 12, 2004 Originally posted by Riggotoni I'm not even sure where to begin on this one.... Riggo you are right, I didn't say we are eliminating factory's just changing the focus of the economy. One of the interesting things that has developed now is people that do work in the factories are specialist and hight educated compared to in the past when you didn't always need that. With computers and robots it is an amazing thing to see. However companies and factories that don't change will not be able to survive. Link to comment Share on other sites More sharing options...
FullbackIsKey Posted August 12, 2004 Share Posted August 12, 2004 yeah, i agree that we are moving towards a service based economy, but i can't agree that it's for the greater good of the country. I mean, services are expensive, and there's only so many things that a person can afford to pay other people to do for them. The service industry has limited potential, i think. Plus if the service industry takes over, people as individuals will become quite lazy and useless, which is already happening. We are also the world's (by far) largest supplier/exporter of entertainment. Hey, everyone wants to be a star, right? Link to comment Share on other sites More sharing options...
codeorama Posted August 12, 2004 Share Posted August 12, 2004 The economy is changing because all of us are out buying video games and football tickets... Link to comment Share on other sites More sharing options...
jbooma Posted August 12, 2004 Author Share Posted August 12, 2004 Originally posted by codeorama The economy is changing because all of us are out buying video games and football tickets... i used your quote in another thread Link to comment Share on other sites More sharing options...
Destino Posted August 12, 2004 Share Posted August 12, 2004 OFN Link to comment Share on other sites More sharing options...
jbooma Posted August 12, 2004 Author Share Posted August 12, 2004 Originally posted by Destino OFN is that all you could do Link to comment Share on other sites More sharing options...
Destino Posted August 12, 2004 Share Posted August 12, 2004 Originally posted by jbooma is that all you could do Clearly it's not. Link to comment Share on other sites More sharing options...
flashback Posted August 12, 2004 Share Posted August 12, 2004 Originally posted by jbooma Starting about maybe 5 to 10 years ago we started to change american economy. What I meant by this is we are going away from a manufacturing economy to a service one. This why you see a lot of people who are losing jobs in factories, and why they are closing. This process will take about 10 to 20 years maybe longer to be completed, and it is for the good of the nation in the long run. Because of this you will see many more resturants popping up and places that are there to serve the customer, not build something for the customers. It is more prevalent now in big cities, but soon will reach out everywhere. Just out of curiosity, jb, who wrote that? Link to comment Share on other sites More sharing options...
jbooma Posted August 12, 2004 Author Share Posted August 12, 2004 Originally posted by flashback Just out of curiosity, jb, who wrote that? a leprochan Link to comment Share on other sites More sharing options...
chiefhogskin48 Posted August 12, 2004 Share Posted August 12, 2004 Riggotoni, brilliant as always. If only most understood these things as well, or could articulate them in such a concise manner. :thumbsup: Link to comment Share on other sites More sharing options...
chomerics Posted August 12, 2004 Share Posted August 12, 2004 Originally posted by Riggotoni I'm not even sure where to begin on this one.... We are not seeing the vanishing of our manufacturing base simply because it employs fewer people. That would be analagous to saying our agricultural industry has been wiped out because fewer people work on farms. Back in 1990 when I was getting my Master of International Business, a professor pointed out that Toyota was making half as many cars as GM, but with one tenth the workforce. The shedding of manufacturing jobs has more to do with increased productivity than anything else. (Remember all the record productivity increases in the 90s thanks to greater integration between industries and information technologies.) Productivity gains are also the only way to increase real wages. The most sweeping change in manufacturing now is that US manufacturers are largely "assemblers" as much as they are producers. We make the computer chips, but then import computer casings, memory, etc. from South Korea, Taiwan, etc. Caterpillar is a good example of this. Most of the parts for their tractor equipment are built overseas, while the final assembly (and thus, the greatest value-added portion of manufacturing) occurs here. (This is one reason why W's steel tariffs did so much damage to many areas of heavy manufacturing and cost a net loss of jobs). Lastly, the "information revolution", along with the dizzying array of financial derivatives spawned by its existence, has changed how the overall economy , or more specifically the business cycle, behaves. Barring unforeseen catastrophes, such as 9/11, recessions are not going to run as deep, nor will recoveries be as brisk, because companies can far better forecast inventory needs and protect themselves against fluctuations in the cost of capital. Great post Riggo I agree with you on all accounts. One thing we are not taking into consideration is the advent of automation. The initial capital investment is large, but the return in productivity is off the charts. This is one of the areas where we've lost jobs, but bettered the economy. One more thing to add to your productivity argument, we've adopted many different Japaneese statistical analysis methods to increase productivity. Almost ALL comapanies are three sigma now and many are approaching six sigma (for those who don't know what that is, three sigma is I believe 3 defects in 10K and 6 sigma is 3 defects in 1 Billion or along those lines.) We've adopted the Taguchi approach to manufacturing where we run DOE's on the manufacturing process to increase efficiency, while decreasing defects. Thus our productivity increased exponentially, something else that helped fuel the 90's boom. Link to comment Share on other sites More sharing options...
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