Wednesday, November 30, 2011

Electronics: So What Exactly Happened Circa 2000?

Herewith a graphic showing what has happened to the major components of our domestic electronics industry—thus semiconductors, computers, computer peripherals, and telephone apparatus. I’ve derived these data from the Economic Census conducted by the Bureau of the Census in years ending in 2 and 7—and for other years the Annual Surveys of Manufacturing also conducted by the Bureau. Thanks to the shift from the old Standard Industrial Classification (SIC) to the North American Industrial Classification System (NAICS), comparable data for some industries cannot be obtained for the pre-1997 period, but where available, I show them. Here is the graphic:

What happened, exactly, is that circa 2000 we reached what might be called Peak Electronics (on the analogy of Peak Oil). We stopped making most of the products we buy at home and began to consume the same products but made elsewhere in the world.

The only trend line still pointing up, but almost flat, is the trend associated with semiconductors, but that trend appears also destined to decline. The major product categories that depend on electronics are all headed for de facto extinction as domestic products—and the employment associated with them is therefore heading for what? Part time work in retail?

What is still climbing is software—and that with barely so much as a hiccup during the Great Recession. It’s the silver lining, you might say. And arguably technological innovation in electronics is also still firmly in our domestic grasp as well, but no sooner perfected on paper and in the lab, it gets shipped overseas for manufacturing. But here, as in other regions of our economic life, the beneficiaries are relatively small domestic elites while the ordinary people are sliding slowly toward the Third World.

I am a holdout. I am against globalism, for a National Economic Policy. We must protect jobs locally. And it won’t happen if we let whole industries just disappear without a single political murmur.


  1. You may be interested in this quote from "That Used to Be Us," by Thomas L. Friedman and Michael Mandelbaum. "...some very important trends in today's workplace become clear: the people on the bottom rung of the workplace are becoming more and more empowered, which means more innovation will come from the bottom up, rather than just from the top down. Therefore it is vital we retain as much manufacturing in America as possible, so our workers can take part in this innovation." Previously the authors were describing manufacturing plants where maintenance workers, line workers, and engineers all work together to solve problems and increase productivity. Because the workers in the plants themselves, those that work with the raw materials, have first-hand knowledge of what works and what doesn't they are increasingly asked to help increase productivity and make the manufacturing systems better. This is difficult to do if the manufacturing plant is half-way around the world.

  2. Thanks for the link. Yes. We need unity at all levels. One hears pious talk about People Come First, but actions suggests that this has become a platitude in some people's vocabulary.