Full steam ahead: the U.S. manufacturing and energy revival.

• Author: Pappas, Matthew D.
• Position: Money Talk

Two key themes are emerging in the United States: first, a resurgence in manufacturing, and second, energy independence. These two developments could singlehandedly send the United States into a new age of growth and prosperity.

Manufacturing Revival

In manufacturing, cheaper labor costs and new production capabilities are driving many businesses to expand and relocate plants back to America. In energy, new technologies allowed more reserves of oil and cleaner-burning natural gas to be discovered right in our own backyard. Combined, these two trends could create many new jobs and boost our long-term sustainability.

The U.S. manufacturing revival has already begun, and the data show that it's on an upward trend. China, with its longstanding perception of being a cheap labor hub, has seen labor costs more than double over the past decade, while labor costs in the United States have declined by more than 30 percent. And in 2012 alone, more than $9.5 billion was spent on new U.S. manufacturing plants by various well-known companies--this during a year when we had a polarizing presidential election, gridlock in Washington D.C. and a stubbornly slow economy. Those billions were spent despite the unease and uncertainty caused by those events and, in fact, most of it was spent before the outcomes of the elections were known.

More importantly, these plants are now able to adopt newer, more advanced technologies. Take 3-D printing for example--this could completely revolutionize the basic manufacturing process but it is very difficult to implement in older facilities. Newer U.S. plants, however, are being designed to incorporate 3-D printing, advanced robotics and Artificial Intelligence (A.I.). Once fully operational, they could effectively dwarf the productivity of their older counterparts that are located in areas like China and Korea. When you consider the costs of shipping internationally and the political risks of doing business in other countries, it becomes even more attractive to have these plants back in the United States.

Some claim that new robotics and A.I. will actually reduce manufacturing jobs instead of increasing them. I see it differently, as we've faced similar c, creative destruction" before. In 1869 for example, more than 46 percent of the U.S. population was employed in agriculture. Today that number is less than 1 percent, but the production level is 16 times higher. During that time we had many technological advancements with...