US Manufacturing decreases and possible Innovation Impact

A New York Times article (February 12, 2011) describes the drop in employment in US manufacturing – from 11.6 million in 1979 to 8.1 million in 2010, and worries about the consequent impact on innovation.  Some experts suggest that manufacturing spurs innovation – and that the increased in the imported fraction of components in US manufactured products from 17 % in 1997 to 25 % in 2010 will diminish product designs developed by US Engineers.  Susan Houseman from the W.E.Upjohn Insitute is quoted as saying “The big debate today is whether we can continue to be competitive in R&D when we are not making the stuff we innovate”.  Is the decline in US manufacturing a cause for concern for US product innovation ? Can the information regarding products and their performance enable innovation without the experience of manufacturing ?  If US companies own plants abroad as part of a global supply chain, would US innovation still be impacted ?

Advertisements

About aviyer2010

Professor
This entry was posted in Global Contexts, Operations Management, Supply Chain Issues and tagged , , . Bookmark the permalink.

One Response to US Manufacturing decreases and possible Innovation Impact

  1. Jan Fransoo says:

    In the studies that I have conducted with high-end equipment manufacturers, it is pretty clear that innovation and manufacturing operations need to be co-located. Only a very small number of companies succeed in keeping up the speed of transferring new innovations to manufacturing once manufacturing has been offshored. Once they face these difficulties, most companies then choose to also offshore their innovation departments (product R&D, production technology, etc). I would agree with Houseman that continually offshoring manufacturing will lead to offshoring of innovation, or losing the speed of innovation. However, this may be very different for relatively “simple to assemble” consumer products such as cell phones or computer game consoles. Manufacturing of these devices has bene very much commoditized and offshoring may be less harmful to keeping innovation on-shore.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s