1 / The notion that manufacturing is a low-value-added activity outside of ‘knowledge work’ is a myth.
For decades following the Cold War's end in 1991, manufacturing has been widely perceived as a low-value-added, low-skill activity, detached from the innovation process. This widely promulgated perspective led companies to prioritize design and research & development, viewing these as intellectual 'knowledge work' involving complex problem-solving, analysis, and innovation, while dismissing manufacturing as merely following instructions. Throughout the 1990s, companies like Intel and AMD retained their design and IP in the U.S. while offshoring much of their semiconductor production to Asia. Similarly, automakers such as General Motors, Ford, and Chrysler began shifting production to Mexico during this period, a trend that accelerated following the implementation of the North American Free Trade Agreement (NAFTA) in 1994. Around the same time, major medical device OEMs like Medtronic, Johnson & Johnson, and Becton Dickinson shipped jobs and operations south of the border, attracted by lower labor costs and geographical proximity to the U.S.. The prevailing notion at the time was that, due to the presumed low-skill nature of manufacturing, workers in foreign countries with cheaper labor needed only to follow instructions and work orders from design files.
However, the bifurcation of R&D from manufacturing often obscures the critical interplay between these two areas, where innovations in one frequently depend on advancements and capabilities in the other. For example, Apple’s iPad, introduced in 2010, not only revolutionized tablet design but also demanded significant breakthroughs in precision manufacturing techniques. Factories needed to produce millions of units at an unprecedented scale while maintaining near-flawless quality — requiring innovations in laser cutting, glass forming, and heat treatment. Similarly, solar panels, now a cornerstone of renewable energy, required not only theoretical advances in photovoltaic materials but also innovations in manufacturing large, high-efficiency glass coatings. The commercial viability of these panels hinged on scalable, cost-effective production methods. This chicken-or-the-egg story is much the same for lithium-ion batteries, which powered the EV revolution, and ushered in new forms of flight (drones), mobility (micromobility), and more. While research into battery chemistry advanced, the practical success of these batteries relied on new metal forming techniques, such as castings, stampings, and cold forgings, allowing for mass production at competitive costs. These examples clearly illustrate that manufacturing is not a passive, low-skill endeavor but an integral part of the innovation cycle, where the refinement of production techniques is as crucial as the research behind the products themselves.
As a result, for many products, manufacturing is not merely the execution of pre-designed ideas, but a form of knowledge work integral to innovation. Within production lines and factories, groundbreaking ideas are translated into scalable realities, driving the American economy. Turning advanced research into commercially viable products — from chip fabs to EV assembly to medical hardware production — requires highly specialized knowledge and technical expertise. In turn, manufacturing is more than simply low-skill work and is knowledge work that accelerates technological progress and sustains U.S. economic dynamism.
2 / Much of manufacturing ‘knowledge work’ is trapped in tribal knowledge.
Much of the critical knowledge embedded in manufacturing processes remains trapped in tribal knowledge — information passed down informally rather than systematically documented. For example, in the early 1980s, the Big Three in Detroit (GM, Ford, & Chrysler) began intensively studying the lean production methods pioneered by their Japanese counterparts, particularly Toyota's just-in-time (JIT) system. As they rapidly lost market share, the American automakers had no other choice, it seemed, but to closely scrutinize (and replicate) what the Japanese companies were doing. At the time, Japanese carmakers were consistently putting out products that outperformed American cars in quality and cost. Despite thorough documentation of Toyota's techniques through plant visits and consultant reports, American companies struggled to replicate the same levels of efficiency. The key challenge lay in the tacit knowledge embedded within Japanese factories — on-the-ground expertise and a cultural mindset developed over decades, which included a deep-rooted culture of continuous improvement (kaizen), precise attention to standardized work procedures, long-term supplier relationships focused on incentive alignment and win-win outcomes, and shop floor problem-solving skills. Even in modern contexts, tribal knowledge remains critical, as seen with SpaceX’s development of the Raptor engine. In 2021, SpaceX faced significant challenges in scaling up production and improving the reliability of the Raptor engine for its Starship program, prompting CEO Elon Musk to bring back retired propulsion engineers who had previously led the development of the Merlin engine. These veteran engineers, with their decades of hard-won experience in rocket propulsion, provided invaluable insights that could not be easily documented or transferred. This included their deep understanding of combustion instabilities, materials behavior under extreme conditions, and intricate manufacturing processes, among other factors. Considering these examples, one can only imagine the extensive tribal knowledge accumulated since the zenith of American manufacturing, from the Second Industrial Revolution (1870-1914) through the Cold War era (1947-1991) to the present day, and how vital it is to manufacturing activities for advanced technologies critical to Pax Americana here.
3 / Yet, the tribal knowledge of the past has been and is in danger of being lost.
This vast repository of tribal knowledge is at risk, and we are in danger of losing it. The loss of tribal knowledge from off-shoring has significantly impacted various industries in recent years, creating challenges that hinder the revival of critical projects. In the maritime sector, the U.S. Coast Guard faced major obstacles in 2019 when attempting to rebuild its icebreaker fleet after a 24-year hiatus in heavy icebreaker construction from 1976 to 2000. This gap led to shipyard closures and a decline in specialized engineering expertise, resulting in a shortage of shipbuilders, engineers, and bare-metal bandits versed in icebreaker construction. Similarly, in the defense industry, Raytheon encountered difficulties in 2022 when staring down depleted Stinger stocks, and attempting to ramp up production of the missile, as war raged on in Ukraine. In response, Raytheon had to recruit engineers out of retirement, so that they could teach current workers how to manufacture the missiles…using blueprints from the late 1970s during the Carter administration. The semiconductor industry has also felt the effects, as Intel struggled since 2021 to expand domestic chip production after decades of offshoring to Asia, which resulted in a loss of nuanced, hands-on manufacturing knowledge. Consequently, Intel faced delays and setbacks in its efforts to regain leadership in chip manufacturing and enhance its U.S.-based production capabilities. As a result, Intel has faced delays and setbacks in its plans to regain leadership in chip manufacturing and expand its U.S.-based production capabilities.
Moreover, of those who continued to provide manufacturing services in the United States, many workers who possess this manufacturing expertise are approaching retirement age, with the U.S. Bureau of Labor Statistics reporting that, as of 2020, nearly a quarter (23.1%) of manufacturing workers were aged 55 or older. As these experienced workers depart, much of their critical know-how may disappear with them. This upcoming wave of retirements could create a significant skills gap in various industries, potentially impacting production quality, efficiency, and innovation across the manufacturing sector.
To give a better sense, America’s largest manufacturers are dependent on machine shops that look like the image below. These machine shops are mostly small businesses, run by folks in their 50s and 60s who have accumulated a wealth of technical tribal knowledge on how to design and manufacture parts.