Essay Example on Manufacturing: Key to Reviving a Struggling Economy

Introduction

A country has minimal chances of growth if it does not embrace manufacturing activities. A country's gross domestic product survives through manufacturing. The national government earns its revenue from the tax on business and employed persons. Manufacturing companies can provide the federal government with a lot of income due to the high rate of employment opportunities. The wages paid to these workers enable them to spend in the economy hence boosting it. A country where taxpayers don't earn develops very slowly. Without employment, the spending power of citizens has weakened hence poor national economic development. Technology has, however, threatened manufacturing occupations in companies through automation of processes (Sorge & Streeck, 2018). When machines are employed to conduct works usually done by employees, it leads to reduced job opportunities. The quality of work will improve, but economic development through buying power will be negatively impacted.

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History of Manufacturing End Economic Growth

Manufacturing sectors deals with transport, trade, and financial intermediaries ever since the '80s. Individuals long ago used to create items for direct consumption; hence, products and currency never used to circulate in the economy. With this kind of economic situation, the national government developed slowly. With the absence of manufacturing centers, countries depended on government employees to circulate money in the economy. In the past, these individuals were few and hence could not make a significant impact on economic development. It, therefore, called for manufacturing companies to improve continually so that the national economy could grow. These companies could get their raw materials from familiar producers, then process them into finished products. They could afterward sell them at a profit to fellow countrymen or export leading to currency exchange. All these financial transactions helped grow the nation's economy. Individuals acquired employment opportunities in these companies hence improved living conditions. There are, however, countries that did not embrace manufacturing activities.

After the end of World War II, some counties embarked on forming trade ties, which were enhanced by manufacturing industries. Some nations, like Brazil, China, Japan, Indonesia, and Korea, among others, became very successful due to industrial penetration. There are those countries that did not acquire much success but currently are adapting to the trend. Countries realized that the quickest way to increase their economic growth was through employment (Nasution, 2019). Without labor, individuals have little to spend hence slow growth. There should be a constant flow of currency in and out of a country; thus, manufacturing provided job opportunities to individuals. Production covers all aspects of life, from consumables to equipment. In the past, the national economy was developing steadily, but currently, due to automation, it has stagnated. Machines replacing human resources reduces the cost of production; hence benefiting industries owners at the expense of everyday employees. For there to be economic growth, employment has to be preserved despite technology advancements.

Importance of Manufacturing to National Economic Growth

Manufacturing activities go hand in hand with employment. People are hired to work in these companies so that they can give quality output for some specified amount of consideration. Workers of these industries are the same people that help circulate money by spending on goods and services. When these individuals get their wages, they used it to purchase various items in the economy. Such circulation of finances helps improve economic growth (Haraguchi, Cheng & Smeets, 2017). As long as industries maintain labor, domestic economic growth will increase hence benefiting everyone. Poverty gets eliminated from a country by the adoption of manufacturing practices.

Through manufacturing, country resources are widely utilized hence enabling local trade. Raw materials used for processes can be acquired faster and at a reasonable price, thus promoting other forms of production. Farmers are more driven into food production since they know some industries require such raw materials. Those who work in the mines also have a more accessible place to sell their minerals. Local manufacturing areas hence enable unemployed individuals to earn a living through them indirectly. When everyone is making some income, they spend it on personal needs, thus contributing to national economic development (Keklik, 2018). In one way or the other, industries are essential to everyone directly or indirectly.

Exchange of currency is one way through which a county earns revenue. Nations do not only produce items for local consumption but also practice importation and exportation. What they do not create is imported, and products made by local manufacturers get exported. Such exchange leads to currency trade that highly benefits governments. The buying and selling of currency when trading with outside countries raise a lot of revenue, which is an indirect benefit from manufacturing activities. Currency trade happens during international purchases as buyers are trying to access goods from other countries. They are required to buy the other currency at some specific interest rates (Haraguchi, Cheng & Smeets, 2017). These interests accumulated lead to massive revenue; hence, economic growth.

Taxation is yet another way in which governments use manufacturing firms to collect revenue. The government has laws set that require individual firms to pay some specific amount for operations. They also stipulate some deductions be made in the accounts of all employed individuals. Individuals starting a manufacturing business require a lot of capital, which calls for loans. Therefore, these institutions offering such services apply some interests which are taxed by the government. With all the taxations going around manufacturing firms, the national government accrues enough to boost its economic growth. Without these industries, there would be minimal savings and spending. Employees to these firms save their income in financial institutions. These sectors then lend the money to others at an interest benefiting the national government. These industries have the flexibility to increase their output as they wish hence accelerating economic development.

The Future of Manufacturing

Technology advancement has profoundly impacted manufacturing activities. Industrial activities are more concerned with products and not services. The technology focuses more on services hence disrupting operations of manufacturing sectors. With the introduction of automated machines, human influence in processes is reducing such trends have seen multiple skilled experts become jobless. For the reduction of production cost, automation has been adopted at the expense of labor. Such advancements have put manufacturing at risk since, in case of failure, there are no experts left to manually solve shortcomings (Katialem, Muhanji & Otuya, 2018). Downtime will increase reducing output levels, which impact national economic growth. There will be a minimal contribution to the economic development from the manufacturing sector hence slow growth.

Most developed countries see no use for manufacturing sectors as they are more focused on service industries. They have relocated their industries to developing countries where they can acquire cheap labor to reduce production costs. Globalization, which has grown due to technological advancement, makes it easier to travel around the world and set up industries in the location of one's choice. Some follow natural resources, while others seek affordable labor. With this trend, enterprises will continue being undermined and seen investments for low-class people despite contributing significantly to the daily lifestyle (Katialem, Muhanji & Otuya, 2018). At long last, manufacturing will decline when all countries invest in service businesses that are overgrowing.

The future of manufacturing business is deeming, especially in developed countries. Few want to get their hands dirty hence looking for alternative means of economically boosting their countries. Manufacturing jobs are being associated with poverty; therefore, not many want to work there. However, the industrial sector cannot be replaced since food, and other substances are essential for life. There will always be a need for manufactures despite the level of technological advancements. Some things will have to change to accommodate machinery technology. The workforce will have come down in manufacturing processes. The number of products will increase, although quality will significantly reduce (Keklik, 2018).

Conclusion

The manufacturing sector has always been used by different countries to seek economic success. In the past, superior countries like the United States, China, and Europe majored in production to improve their financial status. Currently, third world countries are doing the same to boost their people's living conditions. The sector, however, is facing numerous changes, one of them being technological advancement. The future of the industrial sector is at risk as alternative ways of economic prosperity keep being invented.

References

Haraguchi, N., Cheng, C. F. C., & Smeets, E. (2017). The Importance of Manufacturing in Economic Development: has this Changed?. World Development, 93, 293-315. Retrieved from https://www.sciencedirect.com/science/article/abs/pii/S0305750X16302613

Katialem, I. R., Muhanji, S., & Otuya, R. (2018). Entrepreneurial Orientation and Small and Medium Enterprises Growth: Empirical Evidence from Smes in the Manufucturing Sector of Nairobi County, Kenya. International Journal of Entrepreneurship and Project Management, 3(2), 38-53. Retrieved from https://iprjb.org/journals/index.php/IJEPM/article/view/797

Keklik, M. (2018). Schumpeter, Innovation and Growth: Long-cycle dynamics in the post-WWII American manufacturing industries. Routledge. Retrieved from https://www.taylorfrancis.com/books/9781315192055

Nasution, A. P. (2019). Land Transportation Effects on Manufacture and Regional Economy of Sumatra of Indonesia. International Journal of Economics and Management, 1(3), 1-9. Retrieved from http://www.akkayapublish.com/ijem/index.php/IJEM/article/view/59

Sorge, A., & Streeck, W. (2018). Diversified Quality Production Revisited: It's Contribution to German Socio-Economic Performance over Time. Socio-Economic Review, 16(3), 587-612. Retrieved from https://academic.oup.com/ser/article/16/3/587/5056140/