To maintain and strengthen the country’s manufacturing base and to ensure its remaining competitive surely deserves high priority. But this means accepting that manual labour in making and moving things is rapidly becoming a liability rather than an asset. Knowledge has become the key economic resource and the dominant–and perhaps even the only–source of competitive advantage. Creating traditional manufacturing jobs – as the Americans, the British and the Europeans are doing – is, at best, a short-lived expedient. It may actually make things worse. The only long term policy which promises success is for developed countries to convert manufacturing from being labor-based into being knowledge-based.