This is slightly toungue-in-cheek but why can't all of the actual manufacturing be outsourced? Why not? Corporations do it successfully, why can't countries specialize in design just like they used to specialize in certain crops?
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.
