By Roy Paulson
Contrary to popular belief, the USA is the world’s largest manufacturing economy and California is the largest manufacturing state in the union. The USA is the second largest exporter of manufactured goods in the world and should regain the fi rst place position over the next couple years. Manufacturing is directly responsible for about 12% of the US economy, yet the largest effect is associated with the job multiplier effect. The typical manufacturer has a 4 to 1 job multiplier ratio, that effect is a huge stimulus to the economy. There are an incredible number of people that are employed as a result of the manufactures in this country. This list includes accountants, consultants, suppliers, delivery personnel, etc., if you think about the range of goods and services that a manufacturers needs it encompasses a broad spectrum of society.
The ratio of 4 to 1 goes way up to 7 to 1 when you examine a high technology business. There are many manufacturers in our area that fit the profile of a 7 to 1 job multiplier and this type of business is exactly who the area needs to help our employment. When you add in job stability, and a higher average wage, compared to the service industry, you can see why cities compete to have manufactures move into their area. It is not just the cities that compete for manufacturers, the banks line up to provide services because the manufacturers need capital and financing for equipment.
The significant contribution to the economic recovery by the manufacturing community has been in the news and even in the speeches from the President. Why this is happening, and why it makes logical sense will be explored, along with a peek into the future of Advanced Manufacturing. We will explore the world of innovation, patents and the various inputs needed to drive the manufacturing engine of this country.
I will draw upon my personal experiences from my over 30 years of manufacturing and from other professionals in specialized related fields. As I have travelled around the world, I have seen manufacturers hard at work everywhere and in many countries. Yes, I have seen manufacturing in China and I know many organizations that build their products there. Once you can distill the information into patterns, it becomes apparent why success is due to a variety of factors, not just a low labor cost. I can personally attest to this in that I ship my USA product line to China and my business is expanding there and throughout the world.
The intent of the columns will be to bring awareness to the diversity of manufacturing in this area, highlight the incredible talent hard at work to create the things we all need and how the manufacturing community ties into our local and national economy. Many of you reading this may not realize how manufacturing is such a major direct and indirect employer for our area and how critical this portion of the economy is for everyone.
Roy Paulson has worked in manufacturing industry for over 30 years. Currently he is the President of Paulson Manufacturing in Temecula and Director of Paulson International in Germany. Participating in many national and local boards, he brings a broad experience to bear in his volunteer activities. He is currently serving on an advisory committee to the US Government and maintains a secret clearance in National Security for these activities.