Several studies in recent years have tracked a narrowing manufacturing cost-gap between China and the United States. A recent analysis by the Boston Consulting Group and Michael Porter at the Harvard Business School finds that overall this gap is now within five percent. (Wider gaps exist between the US and other developing economies, eg Indonesia or Vietnam.)
When combined with much lower US logistics cost, there is now a comparative advantage for many products to be made-and-delivered in the United States, This advantage is amplified for innovative products where speed-to-market is a crucial competitive factor.
But is the US on the edge of forsaking this advantage? As previous posts suggest, even as density and increasing fidelity of demand signals enhance the potential for supply efficiency, outdated infrastructure and underdeveloped human capital complicate what could be the foundation for a renaissance in US manufacturing. The visual above, comparing US attributes to other advanced economies, situates US logistics infrastructure as a "strength but deteriorating."
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