Domestic Production as an Essential for Stabilizing the Economy

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Table of Contents

Introduction
Discussion
Conclusion
References

Introduction

In the context of globalization and extensive supplies of goods from abroad, many production areas need more support and development. This applies not only to high-tech output but also to cheap disposable goods. Moreover, the pandemic, which began at the end of 2019, forced us to reconsider the priorities of state support, as many critical goods were literally at risk of disappearing from sale due to the disruption of supply chains.

Discussion

The production of semiconductors and chips and disposable medical products are fundamentally different enterprises, ranging from the cost of production to the required personnel qualifications. However, at present, these goods for the US market are united by one important factor: most of them are purchased from foreign suppliers. The manufacturers of masks referred to by the author of the article describe the difficulties that manufacturers of any other product, including semiconductors, can fundamentally face. Among them are non-systemic support from the state, the need for more demand among potential buyers during increased foreign supplies, and the impossibility of long-term planning in conditions of financial uncertainty and dependence on external random factors. The situation for mask manufacturers will differ from that for semiconductor ones. Government subsidies are more likely to concentrate on high-tech rather than financing local manufacturers of inexpensive disposable goods.

Conclusion

Support for domestic production is essential for stabilizing the economy and providing output necessary for the defense complex and technology development, causing a shortage of socially significant products. Moreover, if the import of goods from outside is hedged by domestic production, this will avoid the recurrence of dangerous situations in the future. Of course, relying only on subsidies is a potentially ill-conceived tactic for entrepreneurs, as it is unreliable and unpredictable. However, in this case, it may be helpful to establish strong supply chains of raw materials from local suppliers, cooperation with other similar industries, and a well-thought-out qualitatively and quantitatively production strategy to prevent overproduction and be ready to increase capacity if necessary.

References

Nocera, J. (2022). Why american mask makers are going out of business. The New York Times. Web.

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Domestic Production as an Essential for Stabilizing the Economy

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