To the typical citizen, the principle that “making things matters” probably seems self-evident. In a recent poll by my organization, American Compass, Americans agreed by more than ten-to-one that the nation needs a stronger manufacturing sector. But economists and policymakers long thought otherwise. For the past generation, believing that making things did not matter, they allowed and even encouraged the decline of the American industrial base. Offshoring was more efficient, they said. The services economy offers better jobs. We are paying a steep price for that mistake. I’ll be addressing this theme further as the keynote speaker at the San Joaquin Valley Manufacturing Alliance’s Valley Made Manufacturing Summit on Oct. 29, where I’ll share why rebuilding our manufacturing base is essential to America’s future prosperity.

Making things matters for at least three different reasons, as economists are belatedly admitting. One is that manufacturing and other physical-world industries are the anchor for local economies nationwide. No doubt, we are predominantly a services economy, but workers in local communities cannot thrive entirely on cutting each other’s hair. The goods-producing sectors are most often the source of the tradeable products that a local economy can sell to the rest of the world in exchange for the many things it cannot make itself. Manufacturing also provides what economists call a strong “multiplier effect,” generating greater employment and investment throughout the community for every job created and dollar spent in the factory.

Making things is also crucial for innovation and economic dynamism. Andy Grove, the legendary Intel CEO in its heyday, once observed, “Our pursuit of our individual businesses, which often involves transferring manufacturing and a great deal of engineering out of the country, has hindered our ability to bring innovations to scale at home.” He warned, “Without scaling, we don’t just lose jobs—we lose our hold on new technologies. Losing the ability to scale will ultimately damage our capacity to innovate.”

Economists Ricardo Hausmann and Cesar Hidalgo of Harvard University and the Massachusetts Institute of Technology have formalized that insight in their trailblazing research on “economic complexity.” They find that a nation’s economic performance depends upon its ability to produce sophisticated goods. “Countries grow based on the knowledge of making things,” says Hausmann. “It’s not years of schooling. It’s what are the products that you know how to make.”

Finally, making things matters for economic resilience and national security. As early as Adam Smith’s The Wealth of Nations, economists have allowed an exception to their free-market fundamentalism for the products necessary to defense. But in the 21st century, a technologically sophisticated military doesn’t just need sails and gunpowder, it needs the infrastructure and know-how to build fighter jets and repair submarines, which also requires leadership in advanced semiconductors and critical minerals. 

Whether it is a war or a pandemic that erupts, the home front also needs secure supply chains, for everything from energy to pharmaceuticals. These cannot be snapped into existence when a crisis strikes. They require a pipeline of skilled workers and a consistent flow of capital investment, which depend in turn on continual domestic demand. 

Few people realize that when Smith introduced his concept of the “invisible hand,” he emphasized that it would work, spreading prosperity widely, when businesses have a habit of “preferring the support of domestic to that of foreign industry” and “directing that industry in such a manner as its produce may be of the greatest value.” America’s manufacturers best embody this vision. Their success is vital to the nation. 

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Oren Cass is the keynote speaker for the San Joaquin Valley Manufacturing Alliance’s 10th Annual “Valley Made Manufacturing Summit” on Wednesday, October 29, 2025 at the Fresno Convention Center Exhibit Hall. Cass is the founder and chief economist of American Compass and author of The Once and Future Worker: A Vision for the Renewal of Work in America. A respected voice in economic and workforce policy, Cass is a contributing opinion writer for the Financial Times and The New York Times and a leading advocate for revitalizing American industry and labor. Cass previously served as Domestic Policy Director for Governor Mitt Romney’s 2012 presidential campaign and spent a decade as a consultant with Bain & Company. A Harvard Law graduate, Cass has testified before Congress, published extensive policy research, and regularly speaks on reshaping the future of work and economic policy. He founded American Compass in 2020 to champion policies that support a healthy labor market and resilient communities.