Ideas worth spreading

The real reason manufacturing jobs are disappearing

1,874,283 views |

Augie Picado |

TED@UPS

• July 2017

We've heard a lot of rhetoric lately suggesting that countries like the US are losing valuable manufacturing jobs to lower-cost markets like China, Mexico and Vietnam -- and that protectionism is the best way forward. But those jobs haven't disappeared for the reasons you may think, says border and logistics specialist Augie Picado. He gives us a reality check about what global trade really looks like and how shared production and open borders help us make higher quality products at lower costs.

We've heard a lot of rhetoric lately suggesting that countries like the US are losing valuable manufacturing jobs to lower-cost markets like China, Mexico and Vietnam -- and that protectionism is the best way forward. But those jobs haven't disappeared for the reasons you may think, says border and logistics specialist Augie Picado. He gives us a reality check about what global trade really looks like and how shared production and open borders help us make higher quality products at lower costs.

If you're American, call your senators and representatives and let them know your opinion about trade. Currently, NAFTA is being renegotiated. In my talk, I show that automation is responsible for lost US manufacturing jobs, not NAFTA. NAFTA is, however, responsible for the efficient trade between our North American neighbors, enabling shared production processes which helps keep consumer prices down. But whatever your opinion, take the time to make it known to your elected representatives.

About the speaker

Augie Picado

Border specialist

See speaker profile

Augie Picado is the country manager for UPS Mexico.

The Woodrow Wilson International Center, 2011 | Article

"Working Together, Economic Ties Between the United States and Mexico"

Two years ago I had the pleasure to share the stage with the author of this paper, Christopher E. Wilson. He paints a vivid picture of how all trading partners are not created equal. In his paper, he explains how thanks to the shared production process the US and Mexican economies are tightly connected in a mutually beneficial relationship. Given the misinformation being shared today, this paper provides many concrete reasons for why maintaining an open border is important.

Michael Porter | Harvard Business Review, 1990 | Article

"The Competitive Advantage of Nations"

This article is a brief synopsis of Michael Porter’s book, Competitive Advantage of Nations. As I was researching and writing my talk, I remembered a few sections from the book and I made the connection between what Michael Porter wrote back in 1990 and the realities of shared production in 2017. Not only is it more beneficial for countries to focus on what they do best and trade for the rest, it is also more beneficial for companies to do the same. I see tons of evidence of this from my front-row seat in Mexico City and most importantly, we all benefit from it as consumers.

Ball State University, 2015 and 2017 | Book

"The Myth and Reality of Manufacturing in the United States"

Michael J. Hicks, PhD and Srikant Devaraj, MS, MBA, PMP do a wonderful job of explaining what is actually happening in the manufacturing sector in the U.S. This study quantifies what is driving the loss of US manufacturing jobs and it helped provide context for what I’ve seen first-hand in dozens of manufacturing facilities throughout the United States and Mexico.

About TED Institute

Every year, TED works with a group of select companies and foundations to identify internal ideators, inventors, connectors, and creators. Drawing on the same rigorous regimen that has prepared speakers for the TED main stage, TED Institute works closely with each partner, overseeing curation and providing intensive one-on-one talk development to sharpen and fine tune ideas. The culmination is an event produced, recorded, and hosted by TED, generating a growing library of valuable TED Talks that can spur innovation and transform organizations.

Read more about the TED Institute

If you're American, call your senators and representatives and let them know your opinion about trade. Currently, NAFTA is being renegotiated. In my talk, I show that automation is responsible for lost US manufacturing jobs, not NAFTA. NAFTA is, however, responsible for the efficient trade between our North American neighbors, enabling shared production processes which helps keep consumer prices down. But whatever your opinion, take the time to make it known to your elected representatives.