Why isn't technology-heavy production being done in the U.S.?
In Foreign Policy, Clyde Prestowitz makes the case for returning high-tech production to the U.S.
As an example, Prestowitz cites the varied production phases of Apple's iPhone. Essentially, the prevailing view is that iPhones are made in China. In fact, they are assembled in China. But their high-value, high-tech components (like signal processors, memory chips, and displays) are actually manufactured in Japan, South Korea, Taiwan, Singapore, and Germany.
So, while China may be the final assembly point, the value-added takes place elsewhere.
Prestowitz says that the capital-intensive and technology-intensive work to produce these components is "precisely the kind of production America is supposed to be good at." And in fact, countries like Germany are not low-wage. So the real question is why isn't the U.S. manufacturing these key components?
Losing such high-tech work is a real shame for the U.S. Prestowitz says that production of high-tech components "stimulates R&D, acquisition of high-tech education and skills, and innovation -- all things that economists and business and political leaders say are the keys to America's future."
Bottom line, according to Prestowitz: "America can and should make every effort to get more of this kind of production done in the United States."
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