The issue of "process knowledge" and early-on Silicon Valley calls to mind the founding and building out of Hewlett-Packard, Fairchild, Varian Associates, Intel itself, Apple, amongst many other companies, both large and small. All profited immensely from a tightly-packed, innovative environment centered about Stanford University as the intellectual inspiration, thence translated into physical plants producing cutting-edge products, and where engineers of varying disciplines moved between companies, or started their own firms based upon accreted knowledge gained.
Now, mostly gone, scattered to the winds, and replaced by parasitic predators such as Facebook/Meta, Google, AI, and their ilk. Much has been lost, and few prospects of regaining that once world-class edge.
A core underlying part behind this transition is our values as a society. We are an individualistic society that values freedom, autonomy, and optimizing return on capital and have turned our decision-making over to the market. Individuals out-source their decision-making around the success of projects due to market returns. The offshoring of America's manufacturing capacity overseas to create cheaper products were rewarded by customers buying cheaper goods even though local industries and shop-owners were punished. As a society we regularly make decisions that reinforces this system by the individual decisions that we make based primarily on market price. The market has shifted and started producing cheaper goods that will often break and require replacement resulting in increased life-time costs to customer, but increased profits to the producer.
Underlying this decision-making is our own in how we make decisions. Industries, companies, and business schools now spend big money understanding the psychology of decision making to identify every bias that we have to gain a competitive edge in the market.
Changing this dynamic will require a fundamental shift at the consumer level where we begin to shift our identity from consumers to people who have agency and autonomy over our lives. Individuals need to shift and recognize the impact of our decision-making and how our individual decisions create our life, our communities, and our political environment. The system is responding to a market and we need to start shifting the market.
Dan Wang did us a great service. Everybody: read his book, and also "Apple in China."
The elephant in the American room, not to mention the Trump in the room, is the fact that the American economy for decades has had one purpose only: to increase the return on capital. This it has achieved.
We can barely make planes that fly anymore, but stock prices are as high as the stratosphere. The DJIA in real terms is 10 times what it was 40 years ago, when the "deregulation" era was getting going.
This rising tide left everybody but the yacht owners behind, and with no means of ever catching up. This is what happens when you "optimize" outcomes for one thing only, and thereby one group of people only. If you are one of these people you get free money. Free money unattached to reality, unattached to doing anything worthwhile. Merit-less money. Crypto being the ultimate expression of this. Just declare yourself rich, and get people to invest in your "brand."
So: the predators have been having a ball. They feel entitled now. And one of their own is in charge. I am referring to the USA, not Russia.
However, the natives are restless, as the health care monopolists are already beginning to discover.
I’m going to throw this in quickly because I need to get outdoors and build something. The US still has some of this. Check out Fine Homebuilding, the magazine and podcast. These are carpenters and other trades people working with inspectors, builders, manufacturers, architects, building science people trying new products, providing instruction, reporting back on the performance of the products and processes. They aren’t just reporting on new builds but also advising on how people can upgrade the enormous existing housing stock. They have exactly the kind of process knowledge you are describing. I don’t think this just applies to construction or manufacturing. We don’t talk nearly enough to the people who are actually doing things.
One pioneer in the industrial-district literature of the 1980s and '90s that you don't mention is Charles Sabel, a theorist of industrial organization, initially at MIT (where he was Anno Saxenian's dissertation advisor), currently at Columbia Law School. His first book Work and Politics told the history, if I'm remembering correctly, of the Italian textile-industry industrial districts in Prato, near Florence. And his book with MIT economist Michael Piore, The Second Industrial Divide, imagined a "post-Fordist" American economy that drew lessons from the industrial-district model. I'm curious whether Sabel's more recent work which, as I understand it, focuses on distinctive modes of participatory decision-making and regulation in the European Union and other governance entities might represent a particular kind of, let's call it, "administrative process knowledge" that would have useful lessons for addressing the limitations of the administrative-law formalism characterizing US industrial policy. A kind of "meta" process knowledge, if you will.
One issue that you hint at is the difficulty of getting investment capital to start a small factory. As long ago as the early 1980s in the UK, I was told by a commercial banker that they did not want to lend money for a business model with high upfront capital costs and low variable costs. They preferred minimal startup costs with high variable costs. So much for encapsulating process in machinery! In teh US, where VC investment is very important in some industries, the model is to take more risks than banks, and hope that a portfolio of risky investments will have a winner, preferably a "unicorn". VC's also want a quick ROI, often with deleterious effects on a company.
A least a decade or two ago, there was a worry that offshoring manufacturing would result in the loss of manufacturing expertise and thus manufacturing innovation. To this day, you can see the shoddy imports of Chinese consumer goods with a US brand name. Is there anyone in those US companies with any manufacturing knowledge left? Do they even care?
I am reminded that in WWI, Britain supposedly had to import dyes for the military uniforms from Germany. If the US ever goes to war with China, is there enough manufacturing expertise to convert factories to build war materiel, as was done in WWII?
"did not want to lend money for a business model with high upfront capital costs and low variable costs." A contributing factor as to why transitioning from burning fossil fuels to 'free' renewable energy is painfully slow.
Chinese state also acts like a VC. How many car companies tacitly backed by the Chinese state went splat in order to produce BYD?
In his book, Seeing Like a State (see ref. below from G. Shriver for more), James C. Scott talks about "metis" (vs. techne) in much the same way process knowledge is described here. Metis is local, it is ancient, it is experienced more than it is learned. Tragically, it is ignored when large scale bureaucracy imposes itself on the locals with physical and political "scientific" revolutions promising progress. Techne is the Yin to Metis' Yang. (See also, Jaques Ellul's "The Technological Society) Scott also mentions the Reggio Emilia region in Italy and notes that its resilience to war, famine, and plague are emblematic of how process learning/metis are highly valued and evident in socio-economic and political will.
Where I see the Metis/Techne tension daily is in public education and it's unfortunate marriage to academic and instructional standardization. My concern is not with the standards, per se, but with the belief that they can do what they say. Or that along with "best" teaching practices, they could make schools better, which would mean at least that students were learning deeply, while being deeply engaged and curious, and teachers stayed in the game longer and with more vitality. I work in schools and love it, but we are currently a less deep and less engaged institution than we might have been, and certainly could be. The imposition and implications of standardization represent a narrowing of who students are, how human's learn, what is ethically/morally/psychic-ally important and meaningful in life, and how to best foster that learning in a classroom. A lot of other things we do in schools work to counter this loss, but the dour experience of students intellectually (+cellphones,+Covid,+AI) indicates that our classrooms have been scoured of some of the brilliance that probably emerges from process knowledge and its community kin.
I'm retired. One of my current passions is 3-D printing - creating objects using software and realizing them on a piece of hardware and software called a "3-D printer". Before I retired, I began exploring 3-D printing as a tech journalist. At the time the field was a mess. Printers were very touchy and regularly failed, and the object being printed failed. I finally gave my printers to my grandson who had the patience to make them work. Recently I read a review article from the New York Times "Wirecutter" about a printer from a Chinese company called "Bambulab". The review made the printer sound like a wonder of the modern age. It fully and automatically took care of all the problems that haunted the printers I had worked with and more. So, I bought one (the Bambulab A1 for $499 with 4 color printing capability). That was 6 months ago. Since then I have been happily printing single and multi-color objects with only a couple of easily resolved issues.
Why all this about 3-D printing. Bambulab designs and builds all of its hardware and software products in Shenzhen and Shanghai China. They also have an office in Austin, TX, but all products are built in those two parts of China. Local process knowledge development cycles clearly play a part in the quality and functionality of the products. Aside from in the products themselves, you can see this in the many social media sites dedicated to 3-D printing where you can literally feel the local process knowledge loops in action. What you can also see is that Bambulab listens to its customers. There is no way a company like Apple and its Chinese fabricators can benefit from process knowledge in the way Bambulab does. And, I would guess this is part of the reason Apple is struggling with the development of AI. Software is developed and built here, but hardware is developed and built outside the US. Can we ever expect the US to return to total local development? Probably not. Our industries have lost the ability to appreciate such development processes, and they prefer the cost savings available to them, at least for now, from using foreign fabricators.
"for decades, American policy makers sat back as manufacturing moved overseas, not understanding what the long term consequences for process knowledge might be."
Hell, they facilitated this with free trade agreements and off-shoring manufacturing labor costs on the premise that we were moving up the value chain of global development. I mean, they didn't fully appreciate the consequences of what they were doing, sure, but policy makers were hardly innocent bystanders. This was part of the neoliberal plan since Reagan or Volcker.
I don’t know whether this was the neoliberal plan, but having worked recently in startups that have a manufacturing component, they don’t even try to develop the manufacturing expertise in-house any more. They just assume that China knows how to do it better and cheaper and treat manufacturing as a supply chain issue rather than a core competency.
The most important process China took from the west was a monetary system, and thus a banking system, since only banks create money, via loans. The Chinese monetary, banking and financial systems mimic Capitalism's. Mimic in every way except the absolute direct party (government) control of the banking and credit system. Unlike our 1 or 2 degrees of separation. Well no longer. We are now adopting Chinese State Capitalism, with American characteristics
China's rise is a monetary phenomena. A credit phenomena. Industrial processes just followed. China has the exact problem we have. Vastly inflated asset markets which require more credit, then more again, and again and again.
China's building of whole cities, vast transpiration networks, industrial plants and on and on and on, were all made possible by credit. A credit system and a monetary system based upon credit creating money is the mother process.
We’re seeing this in the Russia-Ukraine war. Despite all their technical ingenuity, firing hundreds of missiles every night, at $100K a pop, to shoot down $20K Russian drones, is not financially sustainable for the Ukrainians. So they’ve turned to tactics last used against German V-1s: scrambling WW2-era prop trainers with a pilot and a gunner, getting close to the drone and either downing it with a shotgun from the open cockpit or tipping its wing with theirs.
This may be the reason behind current public transit builds in Ontario, Canada that are costing 10 times what they do in other jurisdictions. Outsourcing much of the planning (10% "in house" vs. 30% to 40% in most jurisdictions that do it well) has been a costly mistake.
It strongly echoes Switzerland’s longstanding focus on early apprenticeships, a key source of its ingenuity and practical innovation. Roughly two‑thirds (about 65–70%) of young Swiss immediately enter vocational education and training (VET) through apprenticeships after compulsory school!
Having lived in Switzerland and seen that, I enthusiastically directed my son into a millwright program here in Ontario, Canada. Industry is so desperate for the trade that they are paying students to take the course. He'll be well employed for life and, if he changes his mind and pursues engineering in some form, he will always be the most useful person on the shop floor.
Fascinating post and a great comment thread too. There's something about this topic that speaks to the personal experience of a lot of us. I've been in the vicinity of this issue too. For one thing, I might have crossed paths with you (HF) during the years in the 90s when I was the US "rep" to EUNIP, the European Network on Industrial Policy. My one and only paper for them was on the theory of industrial districts.
And in my case, I guess it's a looks-like-a-nail for the hammer. The tool for me has been the economics of interactive nonconvexity (sorry), the way complexly interactive processes yield multiple equilibria, strategy, planning across local structures. This applies across firms as well as within them, which is the point of ID's. A lot of process knowledge is exactly this, generating understanding how different operations benefit or conflict with one another. To take a large chunk of them and send them away for reasons of insufficient profitability on their own is self-defeating. The OP mentions the decline of apprenticeships, and the same points apply. Workers who can develop or alter routines, production software etc. on their own initiative have an important role to play.
The big question is *why* process knowledge is insufficiently valued or even ignored altogether. That's another post.
Looking forward to that post but I'll make a guess that financialization has a lot to do with why we're here. Selling off process knowledge can, in the short term, boost capital efficiency. Assuming they cared about the future of their business (note that I would not take this as a given for non-founders), how would a CEO with a strong finance background who's obsessed with ratios and getting those dreaded costs down recognize when they've trimmed too much fat?
Short answer: employees are not valued. They are an "expense."
It's called capital-ism because the theory of it puts capital first. Whereas communism puts the state first.
Did you see the news in January about the ski patrollers strike at Park City Utah vs the Vail Resorts ski conglomerate? The patrollers are out there on the slopes, sensing the snow with their skis, keeping an eye on conditions, putting their bodies at risk, and can't afford to live anywhere near where they work....while the management sits in a shiny multi-story office building surrounded by a parking lot in Denver, far from the mountains. Google map it to see. They are focused on The Street, not The Rockies, or the skiers. Sadly, they recently sacked, I mean "transitioned" their CEO out of the company. Try not to choke on the BS:
Henry Farrell: "The current approach of the United States government is more focused on ripping out America’s existing knowledge advantages in cutting edge research and innovation without any very coherent plan for creating new ones."
The dangerous war on universities can permanently damage America.
In the 19th century, academia required knowledge of the German language, because the whole of Middle and Eastern Europe used German as a lingua franca, and the great fields of learning were populated by German-speaking scholars. W.E.B. Du Bois obtained a doctorate from Heidelberg.
Hitler committed war on the Universities, with brownshirts pummeling non-Aryan professors.
Hitler YELLED at Max Planck, a founder of Quantum Physics. President Tramp sues Harvard, UCLA, Columbia.
Although Germany repented of the war crimes, the damage done to German academia was PERMANENT.
Many, many fields LACK German experts.
Most of the great historians, for example, have come from Great Britain, France and the United States, with a notable ABSENCE of German scholars.
I know, because I am bilingual, and seek scholarly books in German, the few of which in history exist are usually translations from English.
Now turn to the United States.
With the war on Yale, the University of Toronto has taken some of our Ivy League's best scholars.
French universities are hoping to skim the best from the American brain-drain.
Even if we elect liberal minded leaders soon, the damage may be permanent.
Way back in the late 70's the long late Digital Equipment still had some pilot lines of manufacturing running at the "Mill" headquarters even though the bulk of the work was done at other sites. Seemed like a good model. I also heard stories of Ken Olsen, the founder and then CEO, wandering the cubicles at night and asking random employees how they were doing.
That was when "managing by walking around" was still a thing. It has been replaced by Zoom calls and algorithms. Mill towns are now upscale housing and micro-breweries for desk workers.
Do read "The Soul of a New Machine."
People lose sight of everything but the gold in a gold rush.
One of my first jobs fresh out of college was working as a draftsman under a engineer who told one of his first jobs was working under an engineer designing tea bag filling machines. 1959. I was just pondering the little paper bags holding the sweetener I put in my morning coffee. Thinking all the people who think they can solve any problem by the force of their will.
If you read the above you will find that the "loyalist" Massachusetts Governor Thomas Hutchinson was literally being paid by the Crown, to preserve his loyalty, and his sons were tea importers. I see no evil, do you?
The sage Groucho Marx said:
"Politics is the art of looking for trouble, finding it everywhere, diagnosing it incorrectly and applying the wrong remedies."
The issue of "process knowledge" and early-on Silicon Valley calls to mind the founding and building out of Hewlett-Packard, Fairchild, Varian Associates, Intel itself, Apple, amongst many other companies, both large and small. All profited immensely from a tightly-packed, innovative environment centered about Stanford University as the intellectual inspiration, thence translated into physical plants producing cutting-edge products, and where engineers of varying disciplines moved between companies, or started their own firms based upon accreted knowledge gained.
Now, mostly gone, scattered to the winds, and replaced by parasitic predators such as Facebook/Meta, Google, AI, and their ilk. Much has been lost, and few prospects of regaining that once world-class edge.
A core underlying part behind this transition is our values as a society. We are an individualistic society that values freedom, autonomy, and optimizing return on capital and have turned our decision-making over to the market. Individuals out-source their decision-making around the success of projects due to market returns. The offshoring of America's manufacturing capacity overseas to create cheaper products were rewarded by customers buying cheaper goods even though local industries and shop-owners were punished. As a society we regularly make decisions that reinforces this system by the individual decisions that we make based primarily on market price. The market has shifted and started producing cheaper goods that will often break and require replacement resulting in increased life-time costs to customer, but increased profits to the producer.
Underlying this decision-making is our own in how we make decisions. Industries, companies, and business schools now spend big money understanding the psychology of decision making to identify every bias that we have to gain a competitive edge in the market.
Changing this dynamic will require a fundamental shift at the consumer level where we begin to shift our identity from consumers to people who have agency and autonomy over our lives. Individuals need to shift and recognize the impact of our decision-making and how our individual decisions create our life, our communities, and our political environment. The system is responding to a market and we need to start shifting the market.
Dan Wang did us a great service. Everybody: read his book, and also "Apple in China."
The elephant in the American room, not to mention the Trump in the room, is the fact that the American economy for decades has had one purpose only: to increase the return on capital. This it has achieved.
We can barely make planes that fly anymore, but stock prices are as high as the stratosphere. The DJIA in real terms is 10 times what it was 40 years ago, when the "deregulation" era was getting going.
TEN TIMES!
https://www.macrotrends.net/1319/dow-jones-100-year-historical-chart
This rising tide left everybody but the yacht owners behind, and with no means of ever catching up. This is what happens when you "optimize" outcomes for one thing only, and thereby one group of people only. If you are one of these people you get free money. Free money unattached to reality, unattached to doing anything worthwhile. Merit-less money. Crypto being the ultimate expression of this. Just declare yourself rich, and get people to invest in your "brand."
So: the predators have been having a ball. They feel entitled now. And one of their own is in charge. I am referring to the USA, not Russia.
However, the natives are restless, as the health care monopolists are already beginning to discover.
Don't built your house on quicksand.
I’m going to throw this in quickly because I need to get outdoors and build something. The US still has some of this. Check out Fine Homebuilding, the magazine and podcast. These are carpenters and other trades people working with inspectors, builders, manufacturers, architects, building science people trying new products, providing instruction, reporting back on the performance of the products and processes. They aren’t just reporting on new builds but also advising on how people can upgrade the enormous existing housing stock. They have exactly the kind of process knowledge you are describing. I don’t think this just applies to construction or manufacturing. We don’t talk nearly enough to the people who are actually doing things.
One pioneer in the industrial-district literature of the 1980s and '90s that you don't mention is Charles Sabel, a theorist of industrial organization, initially at MIT (where he was Anno Saxenian's dissertation advisor), currently at Columbia Law School. His first book Work and Politics told the history, if I'm remembering correctly, of the Italian textile-industry industrial districts in Prato, near Florence. And his book with MIT economist Michael Piore, The Second Industrial Divide, imagined a "post-Fordist" American economy that drew lessons from the industrial-district model. I'm curious whether Sabel's more recent work which, as I understand it, focuses on distinctive modes of participatory decision-making and regulation in the European Union and other governance entities might represent a particular kind of, let's call it, "administrative process knowledge" that would have useful lessons for addressing the limitations of the administrative-law formalism characterizing US industrial policy. A kind of "meta" process knowledge, if you will.
One issue that you hint at is the difficulty of getting investment capital to start a small factory. As long ago as the early 1980s in the UK, I was told by a commercial banker that they did not want to lend money for a business model with high upfront capital costs and low variable costs. They preferred minimal startup costs with high variable costs. So much for encapsulating process in machinery! In teh US, where VC investment is very important in some industries, the model is to take more risks than banks, and hope that a portfolio of risky investments will have a winner, preferably a "unicorn". VC's also want a quick ROI, often with deleterious effects on a company.
A least a decade or two ago, there was a worry that offshoring manufacturing would result in the loss of manufacturing expertise and thus manufacturing innovation. To this day, you can see the shoddy imports of Chinese consumer goods with a US brand name. Is there anyone in those US companies with any manufacturing knowledge left? Do they even care?
I am reminded that in WWI, Britain supposedly had to import dyes for the military uniforms from Germany. If the US ever goes to war with China, is there enough manufacturing expertise to convert factories to build war materiel, as was done in WWII?
And not just VCs, but monopolized investor-focused industries in general.
Cross out "USA" in favor of "ROI."
"did not want to lend money for a business model with high upfront capital costs and low variable costs." A contributing factor as to why transitioning from burning fossil fuels to 'free' renewable energy is painfully slow.
Chinese state also acts like a VC. How many car companies tacitly backed by the Chinese state went splat in order to produce BYD?
In his book, Seeing Like a State (see ref. below from G. Shriver for more), James C. Scott talks about "metis" (vs. techne) in much the same way process knowledge is described here. Metis is local, it is ancient, it is experienced more than it is learned. Tragically, it is ignored when large scale bureaucracy imposes itself on the locals with physical and political "scientific" revolutions promising progress. Techne is the Yin to Metis' Yang. (See also, Jaques Ellul's "The Technological Society) Scott also mentions the Reggio Emilia region in Italy and notes that its resilience to war, famine, and plague are emblematic of how process learning/metis are highly valued and evident in socio-economic and political will.
Where I see the Metis/Techne tension daily is in public education and it's unfortunate marriage to academic and instructional standardization. My concern is not with the standards, per se, but with the belief that they can do what they say. Or that along with "best" teaching practices, they could make schools better, which would mean at least that students were learning deeply, while being deeply engaged and curious, and teachers stayed in the game longer and with more vitality. I work in schools and love it, but we are currently a less deep and less engaged institution than we might have been, and certainly could be. The imposition and implications of standardization represent a narrowing of who students are, how human's learn, what is ethically/morally/psychic-ally important and meaningful in life, and how to best foster that learning in a classroom. A lot of other things we do in schools work to counter this loss, but the dour experience of students intellectually (+cellphones,+Covid,+AI) indicates that our classrooms have been scoured of some of the brilliance that probably emerges from process knowledge and its community kin.
I'm retired. One of my current passions is 3-D printing - creating objects using software and realizing them on a piece of hardware and software called a "3-D printer". Before I retired, I began exploring 3-D printing as a tech journalist. At the time the field was a mess. Printers were very touchy and regularly failed, and the object being printed failed. I finally gave my printers to my grandson who had the patience to make them work. Recently I read a review article from the New York Times "Wirecutter" about a printer from a Chinese company called "Bambulab". The review made the printer sound like a wonder of the modern age. It fully and automatically took care of all the problems that haunted the printers I had worked with and more. So, I bought one (the Bambulab A1 for $499 with 4 color printing capability). That was 6 months ago. Since then I have been happily printing single and multi-color objects with only a couple of easily resolved issues.
Why all this about 3-D printing. Bambulab designs and builds all of its hardware and software products in Shenzhen and Shanghai China. They also have an office in Austin, TX, but all products are built in those two parts of China. Local process knowledge development cycles clearly play a part in the quality and functionality of the products. Aside from in the products themselves, you can see this in the many social media sites dedicated to 3-D printing where you can literally feel the local process knowledge loops in action. What you can also see is that Bambulab listens to its customers. There is no way a company like Apple and its Chinese fabricators can benefit from process knowledge in the way Bambulab does. And, I would guess this is part of the reason Apple is struggling with the development of AI. Software is developed and built here, but hardware is developed and built outside the US. Can we ever expect the US to return to total local development? Probably not. Our industries have lost the ability to appreciate such development processes, and they prefer the cost savings available to them, at least for now, from using foreign fabricators.
"for decades, American policy makers sat back as manufacturing moved overseas, not understanding what the long term consequences for process knowledge might be."
Hell, they facilitated this with free trade agreements and off-shoring manufacturing labor costs on the premise that we were moving up the value chain of global development. I mean, they didn't fully appreciate the consequences of what they were doing, sure, but policy makers were hardly innocent bystanders. This was part of the neoliberal plan since Reagan or Volcker.
I don’t know whether this was the neoliberal plan, but having worked recently in startups that have a manufacturing component, they don’t even try to develop the manufacturing expertise in-house any more. They just assume that China knows how to do it better and cheaper and treat manufacturing as a supply chain issue rather than a core competency.
The most important process China took from the west was a monetary system, and thus a banking system, since only banks create money, via loans. The Chinese monetary, banking and financial systems mimic Capitalism's. Mimic in every way except the absolute direct party (government) control of the banking and credit system. Unlike our 1 or 2 degrees of separation. Well no longer. We are now adopting Chinese State Capitalism, with American characteristics
https://asiatimes.com/2025/08/chinas-mao-has-nothing-on-chairman-trump/
China's rise is a monetary phenomena. A credit phenomena. Industrial processes just followed. China has the exact problem we have. Vastly inflated asset markets which require more credit, then more again, and again and again.
China's building of whole cities, vast transpiration networks, industrial plants and on and on and on, were all made possible by credit. A credit system and a monetary system based upon credit creating money is the mother process.
> There are aspects of context that simply cannot be represented well by quantitative data
This ties well to this post about state failure:
https://open.substack.com/pub/hollisrobbinsanecdotal/p/seeing-like-a-state-university
> algorithms don’t win battles
We’re seeing this in the Russia-Ukraine war. Despite all their technical ingenuity, firing hundreds of missiles every night, at $100K a pop, to shoot down $20K Russian drones, is not financially sustainable for the Ukrainians. So they’ve turned to tactics last used against German V-1s: scrambling WW2-era prop trainers with a pilot and a gunner, getting close to the drone and either downing it with a shotgun from the open cockpit or tipping its wing with theirs.
We went through all this 30 years ago in the public sector with New Public Management and "steering not rowing" which I wrote about here,
https://www.themonthly.com.au/september-2021/essays/dismembering-government
Key quote
"Much of the knowledge required for policy management is tacit and shared by the professional and vocational employees who actually do the work."
This may be the reason behind current public transit builds in Ontario, Canada that are costing 10 times what they do in other jurisdictions. Outsourcing much of the planning (10% "in house" vs. 30% to 40% in most jurisdictions that do it well) has been a costly mistake.
It strongly echoes Switzerland’s longstanding focus on early apprenticeships, a key source of its ingenuity and practical innovation. Roughly two‑thirds (about 65–70%) of young Swiss immediately enter vocational education and training (VET) through apprenticeships after compulsory school!
Having lived in Switzerland and seen that, I enthusiastically directed my son into a millwright program here in Ontario, Canada. Industry is so desperate for the trade that they are paying students to take the course. He'll be well employed for life and, if he changes his mind and pursues engineering in some form, he will always be the most useful person on the shop floor.
Fascinating post and a great comment thread too. There's something about this topic that speaks to the personal experience of a lot of us. I've been in the vicinity of this issue too. For one thing, I might have crossed paths with you (HF) during the years in the 90s when I was the US "rep" to EUNIP, the European Network on Industrial Policy. My one and only paper for them was on the theory of industrial districts.
And in my case, I guess it's a looks-like-a-nail for the hammer. The tool for me has been the economics of interactive nonconvexity (sorry), the way complexly interactive processes yield multiple equilibria, strategy, planning across local structures. This applies across firms as well as within them, which is the point of ID's. A lot of process knowledge is exactly this, generating understanding how different operations benefit or conflict with one another. To take a large chunk of them and send them away for reasons of insufficient profitability on their own is self-defeating. The OP mentions the decline of apprenticeships, and the same points apply. Workers who can develop or alter routines, production software etc. on their own initiative have an important role to play.
The big question is *why* process knowledge is insufficiently valued or even ignored altogether. That's another post.
Looking forward to that post but I'll make a guess that financialization has a lot to do with why we're here. Selling off process knowledge can, in the short term, boost capital efficiency. Assuming they cared about the future of their business (note that I would not take this as a given for non-founders), how would a CEO with a strong finance background who's obsessed with ratios and getting those dreaded costs down recognize when they've trimmed too much fat?
Short answer: employees are not valued. They are an "expense."
It's called capital-ism because the theory of it puts capital first. Whereas communism puts the state first.
Did you see the news in January about the ski patrollers strike at Park City Utah vs the Vail Resorts ski conglomerate? The patrollers are out there on the slopes, sensing the snow with their skis, keeping an eye on conditions, putting their bodies at risk, and can't afford to live anywhere near where they work....while the management sits in a shiny multi-story office building surrounded by a parking lot in Denver, far from the mountains. Google map it to see. They are focused on The Street, not The Rockies, or the skiers. Sadly, they recently sacked, I mean "transitioned" their CEO out of the company. Try not to choke on the BS:
https://news.vailresorts.com/2025-05-27-Vail-Resorts-Announces-Leadership-Transition?submitted=1
https://www.powder.com/news/ski-patrol-strike-movement
Henry Farrell: "The current approach of the United States government is more focused on ripping out America’s existing knowledge advantages in cutting edge research and innovation without any very coherent plan for creating new ones."
The dangerous war on universities can permanently damage America.
In the 19th century, academia required knowledge of the German language, because the whole of Middle and Eastern Europe used German as a lingua franca, and the great fields of learning were populated by German-speaking scholars. W.E.B. Du Bois obtained a doctorate from Heidelberg.
Hitler committed war on the Universities, with brownshirts pummeling non-Aryan professors.
Hitler YELLED at Max Planck, a founder of Quantum Physics. President Tramp sues Harvard, UCLA, Columbia.
Although Germany repented of the war crimes, the damage done to German academia was PERMANENT.
Many, many fields LACK German experts.
Most of the great historians, for example, have come from Great Britain, France and the United States, with a notable ABSENCE of German scholars.
I know, because I am bilingual, and seek scholarly books in German, the few of which in history exist are usually translations from English.
Now turn to the United States.
With the war on Yale, the University of Toronto has taken some of our Ivy League's best scholars.
French universities are hoping to skim the best from the American brain-drain.
Even if we elect liberal minded leaders soon, the damage may be permanent.
Not to be missed: an eyewitness account of the Nazi takeover of a university.
https://www.theatlantic.com/magazine/archive/1978/12/the-monster-and-the-lamb/662832/
John Harvey: Whew! Very moving eyewitness account!
Thank you so very much.
That was something, wasn't it? Also found in Peter Drucker's autobiography, "Adventures of a Bystander."
Way back in the late 70's the long late Digital Equipment still had some pilot lines of manufacturing running at the "Mill" headquarters even though the bulk of the work was done at other sites. Seemed like a good model. I also heard stories of Ken Olsen, the founder and then CEO, wandering the cubicles at night and asking random employees how they were doing.
That was when "managing by walking around" was still a thing. It has been replaced by Zoom calls and algorithms. Mill towns are now upscale housing and micro-breweries for desk workers.
Do read "The Soul of a New Machine."
People lose sight of everything but the gold in a gold rush.
Tea Bags!!!!
One of my first jobs fresh out of college was working as a draftsman under a engineer who told one of his first jobs was working under an engineer designing tea bag filling machines. 1959. I was just pondering the little paper bags holding the sweetener I put in my morning coffee. Thinking all the people who think they can solve any problem by the force of their will.
Funny you mention tea. An inconvenient historical fact:
Tea Made in China + Tariffs/Taxes + a Very Large Monopoly Corporation + No Say in the Matter = enraged Americans.
Has even the Former Elephant Party totally forgotten about our Boston Tea Party? That didn't end well for the British.
???????
https://en.wikipedia.org/wiki/Boston_Tea_Party
If you read the above you will find that the "loyalist" Massachusetts Governor Thomas Hutchinson was literally being paid by the Crown, to preserve his loyalty, and his sons were tea importers. I see no evil, do you?
The sage Groucho Marx said:
"Politics is the art of looking for trouble, finding it everywhere, diagnosing it incorrectly and applying the wrong remedies."