Manufacturing in the 1980s

Manufacturing In The 1980s

Katelyn Zorek

Silicon Valley is the best known of the new spaces created by high tech industries along with Route 128 outside of Boston, San Diego La Jolla complex (electronic innovators). Area around Irvine, California, is typically full of new spaces created by High Tech industries. The University of California stretches for miles across land that was used for ranching and farming. The stereotype of suburban life and is based on consumerism, suburbia and professional occupations. The countries growth is based off the economic success of the high tech growth poles. Intel introduced in the 1980’s the transistors which was performing 20 million instructions per second. Silicon Valley’s industry was logistical. In 1985, Morris Chang enhanced the use of outsourcing of semiconductor manufacturing by our companies to companies like Taiwanese. Taiwanese conductors were able to drain costs using cheap labor. This led to “fabless” semiconductor companies.

Software for manufacturing became a huge hit. Big corporations could make their entire business run on procurement to sales. David Dufficid introduced PeopleSoft. This idea started taking a human resource management system and put it into the client server architecture. PeopleSoft made everyone else not stand a chance in competition. They has a revenue of 1.9 million that raised to 6.1 million in 1990. They eventually overtook JD Edwards. Silicon Valley didn’t have to depend on the military industry because its financials made a new business model that had progressed many questions about the way they did things in the old world. Money from the military helped with hardware that now has made small software industries like Apple, Oracle and Intel which has created a status in Silicon Valley. The ambition of these companies and the charisma had an effect on the youth of Silicon Valley.

Economists classified economy activity into three groups: agriculture (forestry and fishing), industry (mining, construction, and manufacturing) and services (all activities not included in either agriculture or industry). The decline in manufacturing output and employment is a long run phenomenon. Due to this, policies need to be created for long term problems. Manufacturers had opposed CER (which is the closer economic relations agreement) because the trade balance had moved from almost four to one in Australia’s favor to near equality. Manufactured goods were the most important part of this increase. Many manufacturers whose business model relied on the ability to pass costs on the buyer faltered which included clothing, electrical goods and home appliances went out of business. Between 1987 and the 1990’s Northland lost 18% of its manufacturing capacity. This imposed a deep recession which lasted from 1987 to 1991.

This chart shows the decline in manufacturing especially during the 1980’s when the downfall becomes more significant.  Many problems that occurred due to the decline in the 1980’s included contractionary monetary policy undertaken by the Federal Reserve to combat double digit inflation and residual effects of the energy crisis. Credit became really hard to obtain for cars and home loans. Manufacturing shed 1.1 million jobs. The automotive industry shed 310,000 jobs. There was a huge impact on high inflation and high interest rates on savings and loan industries. This led to frequent account withdrawals.

                 

http://www.brookings.edu/~/media/research/files/papers/2011/6/manufacturing%20job%20loss/06_manufacturing_job_loss.pdf

https://www.youtube.com/watch?v=4EMQRO5yp8Q