The Industrial Sector

In recent years, the industrial section has had a major shift, particularly in the United States. The United States and other developed nations are currently undergoing a post-industrial shift where economic priority is changing from manufacturing-based to service-based. Production of goods such as steel and clothing is currently declining, whereas production of services such as investment advice is currently increasing, relatively. According to George Ritzer of the University of Maryland, these changes may include an emphasis on services such as health and education; a de-emphasis on blue-collar workers and a greater emphasis on professional workers such as lawyers, engineers, and scientists; a greater valued placed on theoretical knowledge rather than practical knowledge, since theoretical knowledge leads to greater innovation; a greater control and development of newer technologies; and finally, an established relationship between scientists and newer technologies, leading to a stress placed on university-level education.

In line with the post-industrial economic and social shift, the industrial sector has been doing quite poorly recently along with the rest of the American economy stuck in the current recession. The Dow Jones Industrial Average, a stock index which measures the performance of the 30 largest public companies in the United States, has been consistently dropping since the recession. During the black week of October 6th, 2008, the DJIA fell 18%. On March 2, 2009, the DJIA dropped below 7,000 points for the first time since 1997. Although the term “industrial” is largely historical, since many of the thirty companies in the DJIA are unrelated to the industrial sector, it is still an accurate measure of the industrial sector. Focusing solely on the industrial sector, MarketWatch has a list of major indices for the industrial sector. These indices include the Pharmaceutical Index, Amex Natural Gas Index, and the Phlx Utility Index. Currently, almost all indices are recording losses, without much prospect for gains in the near future.

Additional statistics also illustrate the declining industrial sector. According to the Bureau of Economic Analysis, in the year 2007, the finance and insurance sector recorded a decline for the first time since 1992. Also for 2007, the construction industry has recorded a slowdown of 12.1% and the growth rate of the mining industry has been lower than 0.1%. However, there has been a good amount of growth as well. Relative to all the other areas in the industrial sector, the IT and technology sectors have been performing fairly well for the year 2007.

Nevertheless, in spite of all the current downturns in the industrial sector, it is still a very formidable sector. With a history of innovation and technological advancements, this sector still maintains a significant position in the American economy. It has completely changed Western history, economics, and society. Some of the largest companies in the world are industrial companies and some of the key innovators in our history participated in the growth and evolution of the industrial sector. Perhaps, its future, a future dominated by information and the services, may not be too bright. Perhaps, it is not what it used to be, given the current economic crisis and the losses in the industrial sector. Whatever the case may be, it will continue to play a key in the present and in the future.