Abstract

A great contest is changing the industrial foundations of the world economy and the U.S. is losing. Once the chief industrial state, the United States is ceding its supremacy, at least in industrial competitiveness to Japan and West Germany and a flock of other sovereignties on down to the city-state of Singapore. The decline in American industrial productivity is both absolute and relative and is not attributable in any fundamental sense to the 1981-1983-world recession. Cheaper labor and low tariffs are factors, but so are hard work and skill and ingenuity. The U.S. is losing to professional superiority. All the indicators show that American businessmen are losing our competitive advantage. It does mean that they must do something or they would have lost. They can catch up by recognizing again that a manufacturer has a fundamental reason for existence to produce a product that has economic value. If they turn their backs on this fundamental value, competitive forces will ultimately foreclose. They must refocus their attention on the broadly defined manufacturing function and learn how to use it in a strategic way. The Japanese have become competitive largely through their superior production systems, by producing a quality product at a low cost. Their production systems are the difference.