Up….Down…..Up…..Down…..NO..UP! This is the rhetoric that has been plaguing the manufacturing sector for years. Are media sources so desperate for something to say about American manufacturing that the roller coaster of negative and positive is created, or do we have a basic misunderstanding of how to measure manufacturing growth?
In his book, Industrial Shift: The structure of the New World Economy, Joe Atikian addresses the some of the popular theories regarding the world’s economy. In an interview with Tia Nowack, Atikian states that, “The main focus is on the continuing shift between industry sectors: agriculture, manufacturing, and services. The lines are blurry, but the trends are clear. In the most advanced economies, the share of agriculture has stabilized, the manufacturing share is declining, and the services share is rising. The biggest surprise to most people will likely be that all three sectors have always been growing and continue to grow today. It is only the relative proportions that shift.”
Not the sort of analysis that you see on the evening business news is it?
The world’s population has steadily increased, and Atikian has taken a concept that has been complicated by statistics, and stated the obvious. The services industry had no where to go but up, and the impressive rate of growth in that industry by no means has ended the need for manufacturing or agriculture.
In fact, an arguement could be made that the increase in the services industry has actually provided more opportunity for the manufacturing industry. Somebody has to create and build the hardware that is propelling the services industry forward.
Basic economic concepts begin to prevail when you look at growth in the agriculture, manufacturing, and services logically. As the demand for services increases, the need for innovative and technologically savvy workers increases. As jobs increase in the services sector, the demand for products also increase. And as the world population increases there will naturally be an increase in agricultural products.
So what does this have to do with ERP and manufacturing? Simply, that as the services industry has evolved, manufacturing has evolved with it. Innovation out of necessity. Manufacturers now have ERP Software that gives them the ability to communicate with customers and suppliers on a higher, more effective realm. With the introduction of products like, Infor’s Ming.le, the social media experience is transformed into a powerful tool that facilitates communication and engagement with customers and their needs.
So, to put it simply, manufacturing isn’t a dead industry that is barely getting by, it is the muscle behind a services industry that has grown exponentially in the last 50 years.