Editor’s Note: Reindustrializing Washington

It was three decades ago that
business magazines first started talking about the deindustrialization of
America. A tsunami of competition from Japan had devastated United States
industries such as steel, machine tools and consumer electronics, forcing
companies to slash hundreds of thousands of jobs.

U.S. companies responded by
cutting costs and improving quality only to face a second attack, this time
from the tigers: Taiwan, South Korea and Singapore. Now, the threat we face
is from the BRICs (Brazil, Russia, India and China).

Washington businesses also face
competition from fellow Americans. Attracted by generous state subsidies,
Boeing chose to build a second plant for its 787 airliners in South Carolina
while Dendreon opted to open a factory in Atlanta. Just as we adapt to one new competitor,
another wave follows. Its no surprise that many of our entrepreneurs simply
throw up their hands and dont even consider manufacturing here in our state.

They should. Nationwide, the
American manufacturing sector is far stronger than many people realize,
generating $3 trillion in value last year, making us the worlds largest
manufacturer. Here in Washington, manufacturing accounts for about a fifth of
the total gross business income. We have cutting-edge manufacturers in such
sectors as aerospace, shipbuilding and food processing.

We may even be gaining back some
consumer products businesses. David Giuliani, inventor of the Sonicare
toothbrush, made a conscious decision to manufacture his follow-up product, an
ultrasonic skin cleaner called the Clarisonic, in Bellevue. He says its a
decision that was good for his company as well as for the community.

Having a manufacturing base is
important to the state not least of all because of the many benefits it
provides in the form of jobs and economic infrastructure. Manufacturers
establish a foundation on which many other industries can develop. When Joe
Foggia of Vancouvers Christensen Yachts experienced declining demand for his
yachts, he began applying his composites expertise to building windmill blades,
establishing a new manufacturer in Washington.

Our universities and tech
companies do advanced research in areas like biotech, renewable energy and new
materials, certainly creating many important jobs for scientists, technicians
and others. But its when such research becomes a product that is manufactured
locallywhether its a biomedical device or a system for generating clean
energythat the research truly has a big impact on the economy.

Sure, our overseas competitors
have a large cost advantage as a result of low wages. But those advantages will
shrink over time. In China, for example, rising wages and an appreciating
currency should gradually erode some of its competitive advantages. Meanwhile,
new labor-saving technologies have reduced the relative importance of cheap
wages.

With the combination of technology
and ingenuity we have, Washingtons manufacturing sector has a great future.
But it may take a conscious effort on the part of state government, business
and consumers to keep it that way.

Leslie D. Helm

Editor