The importance of domestic manufacturing is drawing renewed attention as the United States faces challenges in economic resilience and innovation. A recent poll by American Compass found that Americans support a stronger manufacturing sector by more than ten-to-one. Despite this, for decades, policymakers and economists promoted offshoring and a shift toward a service-based economy, arguing it would bring greater efficiency and better jobs.
Oren Cass, executive director of American Compass, will address these issues as the keynote speaker at the San Joaquin Valley Manufacturing Alliance’s Valley Made Manufacturing Summit on October 29. He plans to discuss why rebuilding the nation’s manufacturing base is crucial for future prosperity.
Cass outlines three main reasons why manufacturing remains essential. First, he argues that physical industries serve as anchors for local economies across the country. While services dominate much of the economy, goods-producing sectors generate tradeable products that communities can sell globally in exchange for needed imports. These sectors also have a “multiplier effect,” spurring employment and investment beyond factory walls.
Second, Cass highlights manufacturing’s role in driving innovation. He quotes former Intel CEO Andy Grove: “Our pursuit of our individual businesses, which often involves transferring manufacturing and a great deal of engineering out of the country, has hindered our ability to bring innovations to scale at home.” Grove warned: “Without scaling, we don’t just lose jobs—we lose our hold on new technologies. Losing the ability to scale will ultimately damage our capacity to innovate.”
Research from Ricardo Hausmann and Cesar Hidalgo at Harvard University and MIT supports this view. Their work on “economic complexity” shows that national economic performance depends on producing sophisticated goods. According to Hausmann: “Countries grow based on the knowledge of making things… It’s not years of schooling. It’s what are the products that you know how to make.”
Third, Cass points out that domestic production is critical for national security and resilience. Citing Adam Smith’s The Wealth of Nations, he notes even classical economists recognized exceptions to free-market rules when defense needs are at stake. Modern militaries require advanced infrastructure—from semiconductors to critical minerals—making robust supply chains essential not only during crises but through continuous investment in skills and capital.
Cass concludes by referencing Smith’s idea that prosperity spreads when businesses prefer supporting domestic industry over foreign alternatives: “America’s manufacturers best embody this vision. Their success is vital to the nation.”
