Facebook has accomplished the surprising feat of angering both the political right and left. The right is unhappy with Facebook’s newsfeed, which it sees as having a distinctly progressive bias. The left sees Facebook as the primary social media tool by which Russian operatives attempted to influence U.S. voters.
Trying for damage control, Facebook recently announced funding for a study on income inequality. It’s a nice gesture, but Americans will recognize this as mostly a public relations effort. A much more meaningful approach would be to help reinvigorate the U.S. information technology manufacturing industry.
Facebook’s budget this year includes $14 billion for capital spending. That’s a huge sum of money — and double the amount for 2017. The vast majority of it is being spent on the construction of new data centers in the U.S. and worldwide. But most of that budget will go toward purchasing new servers, data storage units and networking gear manufactured in Asia, not the U.S.
America was and is an IT innovator. We were an advanced manufacturing powerhouse, but our high-tech manufacturing sector is in decline. Employment dropped from 1.8 million workers in 2000 to 1 million today. These are skilled and semiskilled, solid, working-class and middle-class jobs with good wages and benefits. Unfortunately, every advanced manufacturing plant that moves offshore also moves future innovation offshore.
In sharp contrast to America's struggling tech equipment producers, China employs 12.9 million workers in high-tech manufacturing, according to a 2014 figure from the Chinese government. That is more than 12 times the number in the U.S.
Facebook could declare that it will spend a quarter of its data center budget on U.S.-manufactured equipment and not send its dollars to Asia. Walmart previously broke ground in this regard by declaring it would substantially increase its purchasing from American producers.
If Facebook committed to spending one-quarter of its IT budget on American-made equipment and was joined by other internet giants, the effort could mean some 3 million U.S. workers manufacturing exactly the products that make the internet hum.
Like Facebook, Google also spends about $14 billion a year on capital expenditures, and again, most of it goes to products manufactured in Asia. If both companies started to build a loyal workforce in the U.S., they would quickly improve their public image.
Their action would incentivize the leading makers of servers, storage and networking gear (Hewlett-Packard Enterprise, Dell-EMC, and Cisco Systems) to invest in plant capacity and workers to build more of their products in the U.S. market.
Ideally, such a gesture would have further repercussions. Apple, for example, has announced that it is increasing the size of its Advanced Manufacturing Fund in the U.S. to $5 billion. But it has yet to follow-through on expanding any of its manufacturing in the U.S. A nudge from Facebook could help spur a real commitment.
The United States leads the world in designing software, social media, storage and networking gear, but we don’t manufacture enough of the high-tech equipment people need to use this technology. If the U.S. wants to continue as a world leader in technology, it needs to grow its domestic high-tech production. And two of its biggest U.S. customers, Facebook and Google, have the ability to help make that happen.