Manufacturing is production of goods in an industrial setting, usually a factory. Production in a centralized and specialized location such as a factory was originally required in order to use machinery powered by some source such as water power. Later steam power came into general use for manufacturing, mining, and transportation. The introduction of electricity mitigated that need for centralization but the manufacturing process itself requires a central location where inputs can be gathered and fashioned, using a variety of machinery and skills, into useful products.
In addition to small scale manufacturing by craftsmen, industrial production on a large scale has a history extending to antiquity, particularly in mining and construction of public works such as The Pyramids Wp→. Mobilization of large masses of men has an equally long history in war. Organizational discipline is necessary when efficiency is required, as in war, thus development of a culture of cooperation and solidarity is vital for optimum success; an advantage that is lost when compulsion is employed as in slavery.
Rise of the working class
The spread of manufacturing created a demand for workers, a new social class, the working class, who were dependent on sale of their labor. Workers formed labor unions as they attempted to negotiate contracts determining the terms of employment: their wages and working conditions. Class consciousness emerged and the dynamics of capitalism formed the material basis for the economic theories of Karl Marx and the communist movement.
Increasing efficiency and skills are central to the industrial revolution. Machines are constantly being improved and the skills of workers required to invent, maintain, and operate them are constantly increasing. The need for labor-saving technology is to a certain extent dependent on the price of labor, wages, but as production processes become more sophisticated, the price of labor used in actual production of the product becomes a smaller and smaller portion of the cost of production, thus there is a tendency for relative cost of labor to increasing become less of a factor in making decisions regarding location of production. Lax environmental and labor regulations and the amenability of local government officials to accept bribes or forgive taxes and other expenses may be far more important as may governmental stability and the prospects of being able to retain investments and profits.
Due to increasing efficiency the number of people required to manufacture an increasing amount of goods in decreasing. In the United States the average manufacturing worker produces about $180,000 of goods each year, a substantial increase from the past; in 1978 each American worker produced goods worth less than $60,000. In developed countries such as the United States or Germany the number of workers engaged in manufacturing is stagnant or declining. Only in low-wage markets such as the People's Republic of China where disciplined skilled labor that will live in regimented conditions and work for extremely long hours can be obtained at low wages is manufacturing growing rapidly. Even there, in the 2010s, rapidly increasing wages and labor shortages are developing. There are a few outliers such as Bangladesh where low skilled workers are sweated for next to nothing, but even there mass movements are developing which offer resistance to extreme exploitation.