Our economy is straining at the bit to grow out of the Great Recession. You wouldn’t know that from the dreary news on both the jobs and GDP growth front. The good news is found in the incredible potential for high-paying jobs, growth and wealth creation bubbling up in America’s manufacturing sector.
Manufacturing is hot, even though we’re supposed to be in a post-industrial economy. The transformation in American manufacturing today is redolent of a century ago when innovation and growth in the industrial landscape was blossoming in both big companies and start-ups.
On today’s start-up front we have emerging 3D printers – machines that ‘print’ parts and products direct from computer drawings — that promise to do for conventional manufacturing what PCs did for central computing. For investors, lucky ones at least, 3D printing is already changing some fortunes.
But it will be some time before 3D printing generates a significant boost in the nation’s economy or job numbers. Meanwhile there is another manufacturing revolution already underway that is at a GDP-moving scale. The American hydrocarbon energy boom is driving a massive resurgence in domestic manufacturing.
The dramatic growth in U.S. oil and gas production has not arisen from new discoveries or the opening of off-limits federal lands, but from new technologies and techniques that literally manufacture liquid and gaseous hydrocarbons from solid shale rock.Widely reported as “fracking” – hydraulic fracturing – the story is in fact one of deep industrial innovation, digital technologies and software. In other words, it is a secular shift in the industrial landscape.
The U.S. is the world’s fastest growing and now #1 producer of oil and natural gas. The shale hydrocarbon revolution has already driven a 45 percent reduction in oil imports, contributed over $400 billion a year to the U.S. economy, and attracted nearly $200 billion in foreign direct investment in America over the past five years alone. And America is now a net exporter of refined hydrocarbons — manufactured gasoline and diesel – for the first time since 1949 and on track to become a net exporter of natural gas. The EIA forecasts some $2 trillion in private sector investment in this sector in the coming decade.
All of this is doing more than eroding the trade deficit and roiling global energy geopolitics, as valuable as both those impacts are. And it is doing more than driving a renaissance in the manufacturing needed to build out the actual oil and gas extraction, transportation, and processing industries. Low-cost high-reliability supplies from the American hydrocarbon sector are also fueling a revival in the energy-intensive manufacturing sector from plastics to fertilizers.