When was the last time you got yourself a hold of a smartphone that had on it written “Made In America”? There are 307 million smartphone users in the United States alone as of 2022.
But how many of them do you reckon are manufactured in the US? With Apple being the world’s largest smartphone firm with billions of dollars in revenue and a market share of 23%, most of those phones are manufactured in China!
This brings us to the question as to why aren’t the USA manufacturing smartphones on their home ground rather than outsourcing them from outside of their territory. Despite owning such huge companies with massive revenue, was the idea doomed from the beginning, or is there something else?
The Challenges of Repatriating Manufacturing to the US
At present, more than millions of manufacturing-oriented jobs originating in the US have shifted overseas. Surprisingly true that many companies are hinging on factories that are a boat, a drive, or at least a long-haul flight away from their customers. Under the unfortunate crisis of Covid-19, society began to comprehend the tumultuousness of the whole manufacturing system due to shortages or blockage of supply of their desired products. This then led to a lot of factories in China being forced to shut down permanently or temporarily. This jeopardized the entire supply chain and manufacturing process so hard that, even when China started to fight back by re-starting the whole manufacturing process from the ground up, they paid the price for their sufferings. Among some of the common issues they faced were regarding shipping, trucking, and air travel where the massive replenishment was evident and the shelves began to run out of its stock due to an increasing demand.
According to experts and senior analysts in manufacturing, 2020 was marked one of the worst years, backed by the collapse of the Chinese manufacturer, the inability of American-based companies to cope with the market needs, and their unwillingness to enter the manufacturing industry despite scarcity. This is also another partial reason why the whole “Buy American” was an executive order from President Joe Biden, which encouraged the federal government to draw upon its multi-trillion dollar budget by purchasing materials that had been made in the US. He hoped that by boosting the demand for American-made products, companies would start to re-invest in manufacturing back home, which would then fill the gap.
However, Biden wouldn’t be the only person who wanted to see this issue solved. The successor of Steve Jobs and CEO, Tim Cook made a pledge back in April 2021 stating th at Apple will spend 430 billion dollars on US Investments in order to generate about 20,000 jobs in the United States over the next five years. These jobs will focus on employees who have a keen eye for working with 5G connectivity, artificial intelligence, and of course, silicone chips. However, as all things go, there ensues an uncertainty on how far things will go. It’s because – WITH that multi-billion dollar investment, it’s unlikely for Apple to shift to core manufacturing work in their own homeland any soon. Take the iPhone for instance. As Apple’s signature product, the iPhone will most likely continue to be assembled in China, NOT in the USA. In order to align with that change, the US might need ages to up the game with the latest manufacturing technologies, all while offsetting lower wages and other costs like transportation, supply chain and taxes. The US, for its own economic sake, will also need to turn its traditional education system into a more practical-based vocational course. By integrating this into its apprenticeship and education system from the ground up, the American workers involved in manufacturing jobs can finally secure an assurance that it’s a worthwhile career to pursue.
Not just smartphones, in order for the whole process to work, the global supply chain would tamper with other products like cars, computers, refrigerators, and silverware and the lot would also need to expand back to American shores. But among all these, perhaps the biggest challenge in this regard would be how Americans prefer to vote with their wallets. Besides buying into the “Buy American” concept, we all apparently are buying smartphones regardless of their place of origin. According to the research c and associate provost from the Massachusetts Institute of Technology, “Am I willing to do the legwork to find what’s made in the US or find what was made locally and purchase that to give my signal to the system? Consumers signal to manufacturers what consumers want, so we have a responsibility if we want this to change.”
Decades earlier, a lot of car companies, drug manufacturers, and even toy companies used to manufacture their products in the US, but nowadays almost all of the clothing you’ll find in your closet has the “made in Bangladesh/Vietnam/Columbia tag. Renowned toy company Mattel has its figurines and other toys produced in China, Indonesia, or Mexico. And as for tech like smartphones, it gets a lot harder as the gadgets have turned smaller and more advanced recently. You need minerals that have been mined from Africa, Australia, and South America, and then take those materials on worldwide trips to get them melted, treated, extruded, and shaped into microchips, sensors, batteries, or glasses. Kinda gives you an idea of why it’ll not be easy for the USA to leap over directly toward manufacturing. While it had a good thing going on, the Pandemic came in and changed everything, causing factory shutdowns in Asia and causing a global shortage of cars, drugs, and food. This shortage even impacted Apple, whereby they gave a heads-up on their limited number of iPads and Mac production.
Truth is, at this point while coming up with premium products through a domesticated method is possible, it’s not easy. Take a look around you. Things different from smartphones or tech that also require microchips are no longer made in a single town or factory. They are rather assembled from parts sourced from different countries of the world. Since China does it a lot cheaper, It won’t help United States to fit in big shoes
Our Takeaway
Now, how easy or difficult would it be to fix it? Well, considering the term “American-Made” is pretty vague in itself, it’s going to be complicated. What actually needs to happen next, is more investment and of course, more innovation in new types of manufacturing. One way could be to utilize the recycling process to recycle the older materials into new ones or cater to more advanced technology in general. The whole concept depends on technology, and technology demands investment.
