Dean Barber

Waiting for a Renaissance (and My Smiling Robot)

In Uncategorized on March 10, 2013 at 6:36 am

Do you see the world as it is or how you want it to be?

Talk about a loaded question. If it makes you feel any better, we all see the world through very personal and sometimes even fractured lens. At any given time, each of us can be an optimist, a pessimist and occasionally, very occasionally, a realist.

Now I will admit that I get rankled with what I perceive as cheerleading talk about a wave of re-shoring that will spark a “manufacturing renaissance” in this country. As most of us are prone to do, the proponents of this notion cherry pick information (anecdotal evidence) to buttress their argument that this mega-trend is actually taking place.

This confirmation bias, also known as “my side bias,” is a tendency of people to favor information that confirms their beliefs. People display this bias when they gather or remember information selectively, or when they interpret it in a biased way. They also tend to interpret ambiguous evidence to support their existing position.

Now we are all guilty of this because we are human, but there are times when you really have to guard against it. For example, I would not be serving a corporate client very well on a site selection project if I allowed my personal biases to skew or interfere with my interpretation of data.

Strive to be Fair

Sure, there will be subjective decisions made during the process, but I should strive to be fair and balanced in my approach to essentially eliminate building/sites/communities from contention. After all, site selection has to be a winnowing process.

When I was a newspaper reporter, the creed within the profession of journalism was that I should be “objective” and not let any personal views creep into my reporting. As I am a bit of a traditionalist, I still believe in that approach, although it is impossible to be completely objective.

But by virtue of the fact that I would return to the newsroom with a notepad full of notes after covering, let’s say a trial, I had to pick and choose on what facts to report. I couldn’t just regurgitate all my notes.  Rather, I had to make subjective decisions on what to report and how to organize my story.

Later, as an editor, I would stress to my staff that they should strive to be accurate, fair and balanced and, of course, tough.  If we did those things, I figured, we would be doing our jobs.

As the business editor, I was frequently approached by business owners and corporate flacks to do “puff pieces,” that is favorable, cheerleading stories about their businesses. In essence, they were seeking free advertising in the guise of journalism. When we asked why we should do the story, more often than not the answer was that they were nice and had a swell business.

Beyond the Cheerleading

That in itself didn’t cut it. There had to be more. There had to be a compelling reason or news peg to do the story. We were always willing to listen and be convinced, but the cheerleading by itself was not enough.  Our credibility would surely have suffered had we cranked out puff pieces essentially promoting businesses.

To me, cheerleaders are pretty much just that, cheerleaders. They are proponents of something, often a feel-good notion that would make us feel better if it were only true. But too often reality sets in. Them durn facts get in the way.

If there is a re-shoring tidal wave to come with huge inroads in manufacturing job growth, please know that I am all for it but am just waiting for it to happen. I am willing to be convinced.

Since the 2007-09 recession ended, the economy has struggled to grow above a 2 percent annual pace. In the fourth quarter, output barely expanded.  The economy is forecast to yet again grow a modest 2 percent this year. Growth will likely be held back by uncertainty about the federal budget, higher Social Security taxes and across-the-board government spending cuts that kicked in March 1.

And unemployment remains high nearly four years after the end of the Great Recession. Roughly 12 million people remain out of work.

But I recognize progress when I see it. The breaking news on Friday that the unemployment rate had dropped to 7.7 percent, the lowest in four years, is certainly welcomed. But put it in context.

We Are Trudging Along

Of the 236,000 jobs created in February, 14,000 were in manufacturing, following the 12,000 factory jobs created in January. If we create 200,000 manufacturing jobs in 2013, I will be pleasantly surprised.

Industrial production is expected to rise by just 2.3 percent in 2013, even slower than 2012’s 3.8 percent growth rate, according to John Lonski, chief economist at Moody’s Capital Markets. The truth is we are trudging along.

A new Michigan State study said 40 percent of manufacturing firms surveyed believe there is increased movement of production back to the U.S. Conversely, that would mean 60 percent do not foresee that happening.

About 220 to 250 companies have brought some manufacturing operations back to the U.S., with the heaviest migration from China, according to Harry Moser, president of the Kildeer, Ill.,-based Reshoring Initiative. This represents about 50,000 jobs or 10 percent of job growth in manufacturing since January 2010.

And while that is all very good, it’s a gnat on a log when you consider the 5.5 million manufacturing jobs lost in the first decade of the new century.

So there you have it, I am trying my best to be a realist. I see positive signs but I am still waiting for a renaissance in terms of a job explosion in the order of a half  million manufacturing jobs. Let’s just say that I remain skeptical.

What Will the History Books Say?

Lord knows we live in a strange time. This past week, stocks surpassed the nominal record set in 2007, while the last recorded real median US household income was 8 percent lower than its 2007 peak. Is it just me or is something wrong with that picture? I only wish I could read the history books 100 years from now.

The last time the Dow hit a record, unemployment was 4.7 percent, George W. Bush was president, and Apple had just sold its first iPhone. From its peak in October 2007 to its bottom in March 2009, the Dow fell 54 percent.

That was far less than the nearly 90 percent drop in the Great Depression but still resulted in some $16 trillion in American household wealth being vaporized. There had been 11 previous bear markets since World War II and none had reached 50 percent.

Ascending stocks usually bode well for consumer spending, as there is the well-documented “wealth effect” that helps people feel better about spending. But the stock market, while a boon to Wall Street, cannot repair all the damage done to Main Street.

And while the US economy appears to be healing, workers’ pay has been a progressively shrinking piece of total GDP. Labor’s share of the economy is now at a 50-year low.  This is not just a U.S. phenomenon. The share of income going to workers is crashing worldwide.

Are the Machines Plotting Against Us?

I am wondering if the machines are not to blame. If there is a renaissance, a flourishing of knowledge, it would seem the case in the area of robotics and automation. Certainly, our machines make us more efficient and more productive at our jobs.

But it is also appears that there might be a sinister side to all this technological advancement at the workplace. How should I say this delicately? It would appear that the machines are making many of us, gulp, obsolete.

Recent technological advances have resulted in robots performing some higher cognitive tasks, which is both cool and scary. While it might initially be attractive to have a cyborg write this blog, I would soon tire of lying on a Mexican beach sipping from a glass with one of those little umbrellas.

Actually, the demise of mass labor is a sobering concept to say the least. I think it will be something the world will struggle with for decades to come and will only increase the inequities of wealth within societies. And I say that as true believer in capitalism.

Economists are increasingly pondering this trend “capital-biased technological change” — of machines essentially killing the need for people.  If the economists are offering solutions, I not sure I am hearing them. Maybe we should all be trained on how to program our own personal robots. 

If I could program mine with certain cognitive skills, certain human traits and attitudes, I think I would want it to be happy and optimistic. My smiling robot. I would want it to be my personal cheerleader, saying such things as, “Go Dean Go,” or “You can do it, Dean,” or “You the man, Dean.” Then again, I might hit the off switch after awhile.

I’ll see you down the road.

Dean Barber is the president/CEO of Barber Business Advisors, LLC, a site selection and economic development consulting firm in Plano, Texas — www.barberadvisors.com He can be reached at 972-767-9518 or at dbarber@barberadvisors.com

 If you are company seeking site selection consulting or an economic development organization in need of counsel, ask for our separate brochures outlining how we can help. All requests for information will be considered confidential.

© Unauthorized use of this blog is strictly prohibited. Excerpts and links may be used, provided that full and clear credit is given to Dean Barber and Barberbiz with specific direction to the original content.

Advertisements
  1. I agree that re-shoring is anecdotal. Also realize that most of the re-shoring is to North America, AKA Mexico, to existing site expansions already existing there and mostly by non-US companies. Be honest, how many of you would like to go to Mexico next week for a month to set up a new operation? I will let you line up in front of me as I am not going, period.

    I also agree that we will continue to improve productivity in this country by incremental process improvements, just like the Toyota Production System teaches us. Much more can be gained this way than waiting for the breakthrough gains. Just think how much further you will be as a business owner to adopt the TPS and then also take advantage of the “big breakthrough” when it comes. You will get to an even better productivity level and drive your cost per unit down further than your competitors who waited.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: