John Kay has a thoughtful essay on what he calls “manufacturing fetishim” which defines as “the idea that manufacturing is the central economic activity and everything else is somehow subordinate .”

Kay argues, provocatively, that in some significant degree obsession with manufacturing is not an economic issue, but a social and political one:

The manufacturing obsession has no economic basis, but considerable social and political significance. Manufacturing was once a principal source of low-skilled male employment. But this can no longer be true in advanced economies. And much manufacturing was undertaken in large plants which dominated their communities, many of which have closed. The few service activities which are undertaken in large institutions which similarly dominate their communities – such as hospitals and universities – have shown more permanence and in any case employ high-skilled professionals. The decline of manufacturing is associated with the emasculation of labour. And the destruction of male social bonds and units of political organisation.

Back when I was working on the next book (after THB2) I made a related argument, in which I advanced the notion that there is actually no such thing as a “manufacturing job.”  Here is what I argued:

My emerging view is that all jobs are service jobs and some such jobs involve the manipulation of tangible goods. In our economic accounting we classify some (but far from all) of those jobs that involve the manipulation of tangible goods (for instance, those that can be put into a shipping container) as manufacturing jobs, and others (such as in construction) as services. The distinction seems somewhat (entirely?) arbitrary to me and as apt to mislead as clarify our discussions of innovation and the economy.

Here is a specific example:

In this sprawling facility on Route 128, sporty Kia coupes and Volvo trucks are regularly taken apart and reassembled. Caterpillar tractors and Harley-Davidson motorcycles are put through exacting trials that test the latest advances in power steering and antilock brakes. Both Aston Martin Racing and the Penske Racing Team come here to shave seconds off their times.

But the 1,000-plus employees at PTC never touch a wrench or ball-peen hammer. Instead they develop and advance software that allows automakers to design, build, and service the latest automobiles rolling off production lines all over the world.

“The actual making of cars has moved to other parts of the world,’’ said Sin Min Yap, PTC’s vice president for automotive market strategy, “but the digital making of cars is thriving here.’’

Are the jobs at PTC “manufacturing jobs”? Are they “service jobs”? And, most importantly, why does such a distinction matter for our discussion of innovation, the economy and employment?

Kay helps us to understand why such a distinction matters, and its not really about economics.

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