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Does the Decline of U.S. Manufacturing Impact Opportunities for Low-Cost Startups?

March 22, 2010

It is a well known truth that Manufacturing has become the dinosaur industry of our land.  Men like my husband, a Mechanical Engineer who loves to work with his hands and can spend hours on end fixing things around the house, have a tremendous sense of the decline of U.S. manufacturing. He told me this Decline is a frequent topic of conversation among his colleagues. They lament that America is no longer a country that makes things.


These sentiments are not restricted to the engineering world. They show up in Pop Culture as well. Last Thursday’s episode of 30 Rock, (the Tina Fey sitcom of her experiences as a head writer for a live television comedy show) includes a great example.

Alec Baldwin’s character, Jack Donaghy is an executive of GE whose biggest claim to fame (he claims) is thinking up the rotating platform of the microwave oven.  In last week’s show, Jack learns that GE has been purchased by a cable television conglomerate. His first reaction to the news is that his career is over; he will no longer have the potential to ‘make things’. He says “Kabletown doesn’t make anything. ….

Today’s Quote:

American businessmen were born to make things.”

Jack Donaghy, TV Executive of NBC’s 30 Rock

But what about the art/skill/talent for repairing “things” – keeping them going, or as we like to say in CPA world “extending the useful life”?  Is this not a corollary to the Decline of American Manufacturing – that the potential for a respectable livelihood earned with highly skilled labor is rapidly fading?  Is it now true that using skilled labor as a basis for a low-cost small business startup is no longer a viable business concept?

Planned obsolescence is a concept I learned  from the Intro to Economics course I took at college.  As America  became a nation of insatiable consumers, it became acceptable to manufacture goods that simply wouldn’t last very long –reliability became less important than cheaper prices.  This was especially true for what was the Number One iconic industry in the U.S. – the manufacture of automobiles.  Over time we began to take it for granted that a car was meant to last only as long as it “looked good”, or was “in style”. Locally owned auto repair shops, with talented mechanics who kept our cars running for ten years or more slowly gave way to Convenience Stores.

Younger generations may not realize this but those of us who have been driving for 20 years or more appreciate the fact that we deal with much less car trouble than we did with our first cars, primarily because cars have become more disposable than they once were. Our passion for consumerism has prompted Americans to buy cars more frequently. It’s not uncommon to hear someone in the market for a new car explain that “they prefer to drive a car that is still under warranty”.

So the decline of manufacturing has been accompanied by the decline of skilled repairmen. Which made what happened on Day 3 of my recent road trip from LA to New Orleans the minor miracle of a lifetime.  And it includes answers, both pro and con, to the questions raised above -  How are opportunities for low-cost startups affected by this trend?  My road trip story, which continues here later this week, will provide some good discussion points for this question.

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