Following on from my recent blog about “Is Manufacturing Coming Back to the US?” one of Morgan Stanley’s Investment guys, Ruchir Sharma, (Managing Director and the head of the Emerging Markets Equity team) has a book out called ‘Breakout Nations’ and in it he says:
“Every Investment idea is right for a while”
He was talking to Fareed Zakaria on his GPS program. Fareed cited that in the 1980’s investing in Japan made you a big winner until the 90’s came around. In the 1990’s it was all about Tech stocks. Then the Tech bubble burst. The Fad for the 2000’s was emerging markets.
And he asked are emerging markets submerging? I was interested mainly because the discussion lead to which countries invest most in R&D, and that is a leading indicator of success for economies worldwide. In fact, the numbers don’t lie. It looks like we may be entering a new phase with different leaders of growth, and it may be the US that becomes the new focus of manufacturing and innovation.
Manufacturing Exports up over past 18 months for USA.
Douglas Burtnick of Aberdeen Asset Management was heard on NBR recently talking about how the US export story is really interesting, and often overlooked by those not focused on the manufacturing industry. He said…
“Companies are seeing external demand for anything from machinery, to electronics, to chemicals, and they’re starting to think about where they really want to manufacture those products. That’s a big deal, because this is the first time in several decades that we’ve actually thought about manufacturing coming back to the US.”
Clearly that affects Aberdeen’s investment philosophy, but he also points out how the phenomenon will affect different regions in the US, and the types of products that will be built here.
This is a significant change from companies going overseas to look for lower costs. So what’s caused the change? Most agree that there are three major reasons.
. US Manufacturing is humming
The first is to do with the issues of distance, communications and language. Transportation costs are significant. Whilst communication and collaboration techniques from companies like Cisco enable real time connected manufacturing, meaning that manufacturing is becoming more connected, this makes the US itself more connected. Overseas transportation costs of materials and goods themselves can still be significant, and a clear target for reduction.
In a time when the manufacturing industry is in dire need of new employees as more and more baby boomers move to retire, I find it interesting that more than 50 percent of 2011 college graduates are either jobless or underemployed (AP Report). To me the numbers don’t add up. Sure, at first glance, it’s easy to blame the poor economy for the unemployment rate, but try considering reasons beyond that. What are the real reasons many college graduates are unemployed? I don’t necessarily think it’s because there aren’t jobs, because in the manufacturing industry, there are plenty. Some have estimated there are hundreds of thousands of jobs that are going unfilled in manufacturing in the US alone; jobs that are good-paying and that can be the foundation and means for someone to attain their “American Dream”.
As I reflect on this information, a couple of things come to mind. Kids growing up today are expected to go to college and graduate. This is great, but over the past few years, we have seen more and more students going to college without a well thought out career in mind. They all have aspirations to be “successful” and have a “dream job” once they graduate, but many students are never really able to untangle what that dream job looks like. This can lead to four or more years of education along with college debt without a clear career path. Read More »
Helder Antunes is Managing Director, Smart Connected Vehicle, CIG . He is a 15-year Cisco veteran with a background in both network security and the automotive industry.
Helder is currently working closely with all the global automobile manufacturers, in order to explore a partnership between Cisco and the OEMs in defining the next generation Smart Connected Vehicle platform, a key initiative within Cisco’s “Internet of Things” strategy.
Outside of Cisco, Antunes is also a General Partner at Pereira Ventures and a counselor to the Regional Government of the Azores, Portugal.
Helder is no stranger to the cutting edge of the automotive industry. He raced cars for many years and designed some of the early data acquisition systems for race cars. On a personal level, Helder was born on the island of Terceira (Azores, Portuguese Territory) in the middle of the Atlantic Ocean, and traveled to Mozambique, Macau, and other former Portuguese colonies before his family settled in Rhode Island.
President Aníbal Cavaco Silva, Cisco CEO John Chambers, and Antunes at Cisco HQ, during the 2011 Portuguese Presidential Visit to California.
He has been published in many industry publications on Automotive and other topics including:
It is with great pleasure that I introduce another key member of IBSG’s Manufacturing Practice, Diana Huang. As a key Industry Thought Leader, Diana has had a distinguished career at Cisco to date and is currently leading the Greater China team in helping Fortune 500 CEOs address their most strategic issues—from growth strategy, global expansion, operational efficiency, and leadership development, to innovation, technology in management, corporate culture, and employee training.
Huang is an active member of the Cisco Greater China leadership team, focusing on go-to-market strategies with transformational efforts, and is also executive sponsor of the Cisco Greater China Smart Grid Virtual Team. In addition, she is a member of the Board of Trustees for the International School of Beijing, where she co-chairs the resources committee.
Huang has 19 years of management consulting and industry experience in the United States and China. Prior to joining Cisco, she was a vice president and partner at A.T. Kearney. As a strategic adviser to senior leadership, Huang led teams that assisted both Chinese and multinational companies with strategic direction, organizational transformation, and operational efficiency improvements.
Prior to consulting, Huang was a research chemist. She has written a number of papers, including “Decoding the Cisco DNA,” “Eco-City: Will China Lead the World?”, and “China’s Response to Global Meltdown.”