No doubt about it, the Internet is a fabulous tool for sharing information. Just being able to send and receive workpiece geometry files as attachments to e-mail messages saves lots of time and avoids critical misunderstandings, for example. That's scratching the surface of how the Internet will facilitate business-to-business transactions.
But a tool is a tool—an instrument to do work. What counts in the long run is the work, getting things done, getting things made. That's why a lasting preoccupation with information technology may not be best for the American economy in the years ahead, if it means a diminished emphasis on "hard" industries such as manufacturing. The countries that are best equipped to generate wealth through advanced manufacturing (using the latest information technology as a vital tool, of course) are likely to have an advantage over countries that neglect this priority.
Manufactured goods, especially the high tech variety, are highly exportable, whereas the international appeal of information products may be limited by language or cultural differences. National economies that support a strong manufacturing sector will create more jobs and have jobs for workers of a wider range in skill and knowledge levels. Currently, the United States enjoys this advantage. Its manufacturing sector has undergone a resurgence in the last ten years—largely because it implemented information tools to enhance productivity so well in its factories.
And that's the point. This is not the time to "deindustrialize" and move to a service economy based on information technology. We must maintain our leadership in both "soft" and "hard" sectors of the economy by staying ahead in the development of information tools such as the Internet as well as by staying ahead in the implementation of these tools in manufacturing.
Of course, we've all heard about those Internet companies starting up on a shoestring, going public with a stock offering that quadruples in value after the first day of trading, and winding up with a market capitalization exceeding some blue chip corporations.
Ironically, it turns out that many Internet companies have yet to turn a profit. Meanwhile, manufacturing, the business of making money by making things, stands to gain tremendously from the new information-sharing tools emerging on the Internet. Investors and policy makers should take note.