[Editor’s Note: This post was co-authored by Brian Patrick Quinn, Patrick Connelly, Patricia Hurter, John Condon, Peter Mueller & Joshua Boger of Vertex Pharmaceuticals.]
American companies, in recent years, have developed a massive appetite for foreign labor. The shirt you’re wearing, the cell phone you’re using, and even the medicine you’re taking might have been designed in Massachusetts or California, but odds are that they were made, in part or in full, by low-cost labor in emerging countries. This “offshoring” of manufacturing is widely known throughout the government, academic, and business sectors. Apart from scattered outcries when American factories go dark, the practice is widely tolerated, and at times celebrated as a paragon of modernization. Public policy has rarely stepped in to restrain it.
However, for most people, “manufacturing” brings to mind the low-skill labor of armies of workers in vast, loud factories. This stereotype belongs to the 19th century, not the 21st – but, dangerously, it is allowed to guide policy even today. To the contrary, modern manufacturing is often a high-precision, highly-skilled process that Charles Dickens or Sinclair Lewis would have a hard time recognizing. It serves as the sharp tip of our innovation economy – not only by incarnating ideas as products, but also by generating important ideas of its own that filter into the rest of the economy. For the private sector, then, strengthening manufacturing in America is smart business. For the public sector, it would prove farsighted and beneficial to society.
Offshoring does have immediate allure and, in some cases, makes good sense. The case of low-skill, high-volume labor is an obvious example, but high-tech manufacturing – of consumer electronics, solar panels, pharmaceuticals, batteries for hybrid cars – is now commonly offshored as well. One of greater Boston’s most technology-intensive industries, pharmaceuticals, illustrates how this comes to be. Simple attention to the bottom line is sometimes what prompts companies to consider a move offshore: if we can outsource our manufacturing to foreign suppliers that cost a fraction of the competition in America, well, why wouldn’t we? However, according to some seasoned pharmaceutical executives, price is not the only factor driving a manufacturing decision – or even the most important. A foreign manufacturer may offer a lower price, but the pharmaceutical environment is so
