Do US corporations have a choice to help improve economic situation?

Intel’s announcement today (AP, 2010) to invest in US manufacturing should be exemplary for other US corporations to take note. The move to invest up to 8Billions USD$ in a new plant at Oregon and upgrades of existing plants in Arizona and Oregon will immediately create 8000 non permanent construction jobs and 1000 permanent placement.

Whether intentionally or unintentionally, US corporations’ frenzied appetites to outsource and satisfy shareholders’ demand of profitability has been detrimental to US progress. One can reasonably argue that outsourcing manufacturing and investing on plants in offshore have been detrimental to US global leadership and that of US corporations.

We have thus far confused corporate profitability and survivals with that of cheaper labor arbitrage but rather ignored long term consequence of breaking the “industrial symbiosis” and the compromise in trade secrets that results from offshore manufacturing. I am not prescribing that corporations should not take advantage of labor arbitrage but should weigh in the long term consequence of such consideration.

For those who prescribe on the benefit of labor arbitrage, perhaps a distributive approach to investing offshore manufacturing and plants considering geo-political and economic benefits are essential. A spread of such investments across few friendlier countries may work to our own advantage.

Nonetheless, US corporations should need to consider “corporate sustainability” in it’s holistic and organic form considering the triple bottom-line and how entity’s very survival is influenced by socio-economic and political upheaval of the country.

Manufacturing is essential element of “Industrial Symbiosis” and despite being post industrialized nation, US cannot ignore it’s importance in the very survival of corporations in the country.

Today, we need more investments in US based manufacturing initiatives than ever before as it will not only create jobs, the effort will help US economy grow restoring country’s global economic leadership.

Reference:

AP, 2010. Intel to spend up to $8B on US manufacturing. Associated Press. Available online at http://finance.yahoo.com/news/Intel-to-spend-up-to-8B-on-US-apf-2298150898.html?x=0&sec=topStories&pos=1&asset=&ccode=

Comments

Greg said…
There's always a choice. The choice between what degree of emphasis is placed on short and long term thinking is important. Once you've decided that, there is the choice of what is long term? Do the decisions I make today create value 10 years from now, 500 years from now? A leaders choice, to decide if it is their responsibility to be creating value beyond their lifetime.
October 21, 2010 at 2:34 PM
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