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Suggested Citation:"5. Conclusion." National Research Council. 1990. The Internationalization of U.S. Manufacturing: Causes and Consequences. Washington, DC: The National Academies Press. doi: 10.17226/1573.
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Page 57
Suggested Citation:"5. Conclusion." National Research Council. 1990. The Internationalization of U.S. Manufacturing: Causes and Consequences. Washington, DC: The National Academies Press. doi: 10.17226/1573.
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Page 58

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Conclusion Internationalization is creating fundamental changes in the nature of the U.S. manufacturing base and the criteria for success in manufacturing businesses: · The domestic market is shrinking relative to total world demand. · Technology sources have multiplied in number and sophistication around the world. Cost priorities have shifted as labor content declines and manu- facturing systems emphasizing total quality control become essential for world-class production. · Political changes fostered by both governmental initiatives and increasing business integration are forcing critical adjustments in global manufacturing strategy. In certain ways, U.S. companies have an advantage in this shifting landscape. They have a greater production presence in foreign markets than non-U.S. firms and have the largest domestic market on which to build the basis for a global assault. On the other hand, that domestic market has fostered a provincial attitude that has made U.S. manufacturers less interested in foreign markets and less in touch with technological developments globally than they might otherwise have been. Though U.S. multinationals have retained their global competitiveness very well, as measured by world market share, the bulk of domestic manufacturers face a range of new challenges as internationalization continues. Building the capabilities needed to prosper in the new manufacturing environment 57

58 is a long-term process aimed at a moving target. What it takes to be competitive has changed and will change ever more rapidly, placing a premium on strengthening core capabilities and emphasizing learning and adaptability. Pursuing such efforts at the national level can assure the success of the nation in the midst of the internationalization process. More than ever be- fore, manufacturers have a choice of where to perform high-value functions because the requisite resources are available globally. Both implicitly and explicitly, countries compete for manufacturing investment. Creating an attractive, superior environment for conducting high-value manufacturing activities in the United States is the long-term key to national competitive- ness. That requires a strong industrial infrastructure, including favorable conditions for long-term investment in R&D, technological innovation, and production; a strong supplier base; and well-educated workers, engineers, scientists, and managers. To maintain long-term advantages, policymakers must not only recognize the criticality of a strong infrastructure and the environment conducive to one but also must have appropriate information to anticipate, guide, and adapt to changes in the global market. With these prerequisites in place, retention and continued growth of high-value manufacturing as a national competitive capability should be assured.

Next: Appendix: Indicators of Internationalization »
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On the basis of discussions and analysis of the current environment for international competition, this book was written to dispel misconceptions regarding the motivating forces behind internationalization and, therefore, to improve understanding of both the challenges and the opportunities of a global market and production base. Important consequences of internationalization for both manufacturers and national policy are described. The volume provides an assessment of what it takes to be successful as manufacturers and as a nation in the international competitive environment.

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