It could be a good moment to bring manufacturing back home: Overseas wages and employment costs are rising, as are long-distance shipping costs, and political instability and natural disasters have shown the weaknesses in long, complex, multinational supply chains. Perhaps it is easier, some companies now say, to have all your suppliers within driving distance, even if that costs more. That's what auto manufacturers have long done.
What is a job? What's a factory?
But this is not a simple or uncontroversial matter.
A big reason why manufacturing jobs and factories moved to the Far East was because Asia and the rest of the developing world have a very different definition of “job” and “factory.” Western manufacturing, by the end of the Second World War, had come to be based around what some economists called a Fordist model: After the innovations of Henry Ford and his industrial comrades, factory jobs became lifelong, secure relationships between employer and employee, and factories permanent features on the landscape.
When Mr. Dyson complains about the 25-year leases he is expected to sign on British factory land, or the employment laws that make it a big burden to hire an additional worker (in large part because it's so expensive to fire them), he is complaining about the legacies of Fordism.
Asian manufacturers work in a “post-Fordist” economy in which labour and capital are flexible and fast-moving. If he sets up a vacuum-cleaner factory in Malaysia, he can ask his aluminium-tube supplier to set up a parts factory down the road, and within a year it can be built, staffed and operational. If his sales fall, he can cut staffing levels quickly.
Millions of Westerners, perhaps the majority, live the post-Fordist life: the call-centre workers, the piecework food processors. But our governments and unions have spent generations making full-time industrial jobs secure and permanent. Changing that will be controversial and jarring. It's what the Detroit auto workers effectively did: In exchange for the Washington bailout, they and their unions agreed to sharp reductions in job security and benefits.
Some labour and political leaders argue that the sort of policies proposed by the Dysons of the world amount to the beginning of a levelling-down of Western standards to developing-world levels, when the opposite should be occurring.
Other economists argue that it isn't really about manufacturing: There is no reason, on paper, why a good is more valuable to the economy, more export-worthy or more productivity-enhancing than a service. Most employment takes place in services, and in many countries the lion's share of exports are services such as software, banking, consulting and things like waste collection. And the barrier between the two is breaking down: Is Amazon's Kindle operation really retailing goods, or are the readers themselves merely the physical front end for the much larger downloading service?
When people talk about using government to boost manufacturing, what exactly are they talking about subsidizing, and to what end? As Jared Bernstein, a former economic adviser to U.S. Vice-President Joe Biden, told a reporter after Mr. Obama proposed his industrial policy: “Every barbershop is now going to claim that they manufacture haircuts.”
Mr. Dyson and his allies dismiss such arguments. “It's a false view that services are just as good,” he says. “Services are very hard to export, and even if you do export them, they're very easy to copy. And manufacturing does provide a better living. The average salary at Rolls-Royce is £41,000 [$65,000]per year; the average salary at Lloyds Bank [Britain's largest service employer]is £17,500 [$28,000]per year. There's a very high standard of living in Switzerland and Singapore, and they're both manufacturing economies – the average salary in Singapore is $57,000 a year.”
He sees the source of salvation in Britain, Canada and similar countries in their universities – “our last remaining source of innovation and industrial leadership,” he says.
“It's always said about the British,” this quintessential Englishman says, “that we invent things and everybody else exploits them. And it's true. But I don't think it has to be that way, and now we have a grand opportunity to change it.”
It is perhaps fitting that this idea is being promoted by the man best known for reinventing the vacuum cleaner. This time, after all, what he is trying to fix is nothing less than a political and economic vacuum.
Doug Saunders is a member of The Globe and Mail's European bureau.Report Typo/Error