30 January 2012

All Jobs are Service Jobs

I am trying to figure out (a) what a "manufacturing job" is, and (b) why many economists think that such jobs are in some way a special category of jobs.

My emerging view is that all jobs are service jobs and some such jobs involve the manipulation of tangible goods. In our economic accounting we classify some (but far from all) of those jobs that involve the manipulation of tangible goods (for instance, those that can be put into a shipping container) as manufacturing jobs, and others (such as in construction) as services. The distinction seems somewhat (entirely?) arbitrary to me and as apt to mislead as clarify our discussions of innovation and the economy.

Here is a specific example to discuss (Thanks AC!):
In this sprawling facility on Route 128, sporty Kia coupes and Volvo trucks are regularly taken apart and reassembled. Caterpillar tractors and Harley-Davidson motorcycles are put through exacting trials that test the latest advances in power steering and antilock brakes. Both Aston Martin Racing and the Penske Racing Team come here to shave seconds off their times.

But the 1,000-plus employees at PTC never touch a wrench or ball-peen hammer. Instead they develop and advance software that allows automakers to design, build, and service the latest automobiles rolling off production lines all over the world.

“The actual making of cars has moved to other parts of the world,’’ said Sin Min Yap, PTC’s vice president for automotive market strategy, “but the digital making of cars is thriving here.’’
Are the jobs at PTC "manufacturing jobs"? Are they "service jobs"? And, most importantly, why does such a distinction matter for our discussion of innovation, the economy and employment? (For initial background, here is how the North American Industry Classification System characterizes manufacturing.)

My view -- all jobs are service jobs. I will follow up on the consequences of such a view in subsequent posts.