Advanced Economies Must Still Make Things
Manufacturing has become both bigger and smaller. During the past 10 years the worldwide value of manufactured products has grown, in inflation-adjusted terms, by more than 60 percent, surpassing US $12 trillion in 2015.
Meanwhile, the relative importance of manufacturing is dropping fast, retracing the earlier retreat of agriculture (now just 4 percent of the world’s economic product). Based on the United Nations’ uniform national statistics, the manufacturing sector’s contribution to global economic product declined from 25 percent in 1970 to about 15 percent by 2015.
The decline has registered in the stock market, which values many service companies above the largest manufacturing firms. At the end of 2015, Facebook, that purveyor of updated selfies, had a market capitalization of nearly $300 billion, about 50 percent more than Toyota, the world’s premier maker of passenger cars. And SAP, Europe’s largest software provider, was worth about 75 percent more than Airbus, Europe’s largest maker of jetliners.
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