The share of an economy’s value-added that is generated by manufacturing has been on the decline in
the developed world for decades. In a nutshell, consumers increasingly demand services—often new
ones—and producers make the necessary accommodations. But manufacturing in the United States
plays a significantly reduced role in the economy relative to most of its industrial trading partners.
Today, Germany’s and Japan’s manufacturing output relative to GDP stands some 7-9 percentage points
higher than the American equivalent.
Such gaps call for political action. America can and should learn from its advanced peers. Whether it
is via vocational training, labor relations, or export promotion, government involvement has proven
supportive of the vibrant manufacturing tradition that all these countries share.