[amh]

Designs are easily copied, physical widgets are not (until we get nano-replicators anyway).

Innovations in design and manufacturing tend to dovetail and drive each other. Doing both under one roof reaps more of a benefit from that dynamic.

There is also a historical argument. The most prosperous, successful countries have had a large industrial base. That doesn't necessarily mean one requires the other, but it does suggest a strong linkage.

[SkyMarshal]

"Innovations in design and manufacturing tend to dovetail and drive each other."

That's Andy Grove's current argument too. I would have thought it to be obvious, self-evident even, but apparently not.