Is Manufacturing a Key Enabler of Innovation?

Over the years I have listened to the discussion about America having to transition from a focus on manufacturing to a focus on innovation. Here are some of the more recent things I have been exposed to. Getting a masters in design engineering helps one to focus on the production market with the designing of products the main agenda of the program. Formation of products is the goal of the program and graduates are expected to gain the relevant skills to be able to compete favorably in the product markets. 

Gary Shapiro (President and CEO of the Consumer Electronics Association) wrote an article for Forbes Magazine entitled “Innovation, Not Manufacturing, Will Bring Jobs”. He claims most of the manufacturing being outsourced abroad requires little education or skill and is a bad fit for educated, bright people. He argues highly skilled, highly educated Americans should put their high-cost knowledge to good use.

Andrew Liveris (CEO of Dow Chemical) recently authored a book entitled “Make it in America” that discusses the unexpected implications of an interdependent global economy and concludes America needs to be both a service AND manufacturing economy to create sustainable health in the economy. He claims that countries with large populations cannot thrive on service industries alone and must have a robust manufacturing base to ensure broad employment.

Over breakfast yesterday, while on our family vacation, my oldest son who is pursuing a career in the fine arts, shared a link to testimony (short video) Discovery Channel’s Mike Rowe (star of the series “Dirty Jobs” and “Mike Rowe Works”) gave to Congress on the need to support manufacturing. He called for a paradigm shift on the need to promote skilled trades as a respectable profession and a realization that not all Americans want to (or should) pursue four-year degrees.

And this morning I read an article on the Brookings Institute’s Hamilton Project .  The Forum generated 12 interesting facts about innovation that are worth considering.

  1. Innovation drives economic growth and raises wages.
  2. Innovation improves U.S. life expectancy.
  3. Innovation makes technology affordable.
  4. New organizational structures lead to rising standards of living.
  5. New household technologies allow for more time for family and leisure.
  6. The pace of American innovation has slowed during the past four decades.
  7. Innovation has failed to increase wages for a substantial number of Americans.
  8. Significant barriers to innovation exist in the government and private sectors.
  9. Federal support for R&D has declined in recent years.
  10. Relatively few U.S. college students study fields critical to innovation.
  11. American women are less likely to continue in STEM fields than men.
  12. U.S. policy makes it difficult for international students to stay and work.

My Opinion

I am beginning to believe manufacturing is actually a key enabler of, not a competitor to innovation. I think the saying “Necessity is the mother of invention” has merit. If you make things, you can more readily see the opportunities for practical innovation and are more likely to find innovative solutions to immediate problems that can have reapplication potential in other industries. I also think manufacturing helps create a culture that encourages and fosters innovative thinking and behavior.

I don’t believe the discussion should center on manufacturing OR innovation. I believe it should be focused on creating an economy that values manufacturing AND innovation. I also worry that other countries are sharpening their innovation skills by embracing manufacturing as a key driver.

To me innovation is rooted in a need and passion for problem solving. Manufacturing is a perfect (although admittedly not the only) functional area for problem solving behavior to be nourished and flourish. I learned a lot from my manufacturing colleagues at P&G about Total Quality methods that were invaluable help to me in diagnosing and solving management problems. The applied mathematics behind their work was as relevant as what I saw from my R&D colleagues, and I equally appreciated both.

What are Your Thoughts?

I am still in the learning mode and would appreciate your thoughts and any online references you think are worth reading. Sorting this issue out will likely have a profound impact on the direction of America’s economic future. Like all issues worth discussing, there is no easy or obvious answer. Your thoughts will help shape and inform the discussion, so thanks in advance for leaving a comment.

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26 Comments so far

  1. Veena Peña

    August 10, 2011

    Good article. Thanks for it. Have you read Cognizant’s Future of Work prospectus? It is about the virtualization / globalization / millenialization of work….Interesting perspective from your son and what he was watching in your article. Speaks to future of America. What if inputs into innovation need not be home-grown? What if our strength in virtual networking could facilitate innovation? Imagine real-time review of US manufacturing from a think tank overseas that made immediate process corrections or recommendations. I don’t think we need to build the technology and the innovation in US, we just need to know how to tap into it and make it work. Making things work is a core competency in USA….Ford didn’t invent the assembly line, etc.

  2. Z. Joe Kulenovic

    August 10, 2011

    A dynamic manufacturing sector clearly benefits innovation – just look at the recent experience of Germany. Indeed, innovative products, services, or processes can occur in any industry – manufacturing, financial services, transportation, retailing, agriculture… Production of a good or service locally undoubtedly stimulates innovative approaches. So, keeping R&D at home while outsourcing all production, for example, may yield short-term financial benefits but undermines long-term innovative capacity. Consider the fate of the US television set producers – the know-how to develop innovative ones has been lost domestically, according to Andy Grove. Other examples abound.

  3. Mki Ellsworth

    August 10, 2011

    Ed, I totally agree with your position.
    There is a natural tendency for more advanced societies to move away from manufacturing. The UK illustrates this shift away from manual labor well as it is farther down that path. Italy, long renowned for its craftsmanship, also seems to be bringing in cheaper labor from China, although this may be the lesser of the two evils.

    Concentrating on innovation alone has led to the state of things as they are. Because the overriding consensus is to move towards a service sector, nobody is encouraged or led towards labor intensive work. As this trend continues, the skills that are not passed on are lost. Lost to other countries that nurture them and lost altogether in the countries that previously honed them.

    The hype over high tech jobs and the promise of the futuristic mode of work life may be to blame. Everyone wants to work as few hours as possible, in the nicest environment possible, for the greatest pay scale possible. This leaves few desirable jobs in the minds of the many that need jobs. Everyone vies for the same lucrative positions
    while fundamental and rudimentary work is left undone. This
    leads to outsourcing as the quickest, most viable alternative or fix.

    The shift back to manufacturing is definitely a good idea before it really is too little, too late. The real shift that’s needed is in the mindsets of the workforce and society. It may just be a point of pride that hinders the growth in this segment. Perhaps if there was more academic accreditation or formal training involved and one could hang that certificate the way one flaunts a professional designation, we could asign a more definitive value to the work.

    The real shift that’s needed is in our overall perception of manufacturing, where it’s held equally in esteem with its nemesis and rival, innovation.

  4. Janette Rawlinson

    August 11, 2011

    Good discussion. For some years I evaluated an excellent project by Manufacturing Advisory Service West Midlands (UK) which introduced new product development processes to help small businesses innovate by introducing new products for new or existing markets. Some are new takes on existing products, others completely new.

    The discipline of introducing analysis, measuring, checking, review at each stage not just of manufacture but of potential market, routes to market, testing resulted in spreading the practice to other parts of participating companies leading to overall improvement in their businesses. In some instances, modernising through software or automation from other sectors produced good results. Others were start up companies with a new innovative product. Companies sought match funding in small amounts at recognised stages for viability testing and product development.
    In order to gain such funding, they had to present to a panel comprising a wide range of expertise including academics from Warwick Manufacturing Group (part of Warwick University).
    This demonstrated as others have said, manufacturing and innovation are bedfellows not competitors. However innovation can be applied to anything – product or service.

    Whilst working on this, I was struck by how much the process could be transferred to service sector. Indeed the National Health Service in the UK has been introducing lean techniques into some hospitals to improve efficiency.

    Given the public sector cuts, transferring gains made in manufacturing over the last 25 years – particularly JIT and lean techniques (introduced to UK from the first wave of Japanese inward investors) to public services could vastly improve outputs whilst reducing costs and improving efficiency to ensure less cuts are made to frontline staff.

    There may be little volume manufacturing left in certain economies (particularly UK) but some of what remains is world class value added so we should be more careful when generalising negatively about the sector.

    One reason I believe Germany has been so successful recently is that is pulled back its outward investment and expertise built up in other countries to its homeland, adding to its receipts of tax/insurance to bolster its economy as well as intelligence base. The other fundamental difference is that all employees undertake an apprenticeship in Germany whether in service or manufacturing sector as well as retaining national service. Engineering and working in manufacturing is seen as a highly desirable profession. Not only are its engineers highly technically competent, most speak English enabling them to work around the world. I believe mobility and flexibility particularly in international work develops skills and individuals who bring such development back to their company.

    That has not been the case for years in the UK. Whilst working with an engineering body in recent years, several engineers who have attended development sessions are from overseas and intend to work overseas in future.
    Manufacturing needs a boost – in profile, recognition and support for companies to produce high quality products needed around the world and for those that already do, to publicise it for others to recognise.
    Innovation is needed everywhere.

    However most of all what we need is ACTION rather than discussion.
    Here’s to more innovative business sectors in general in the future.

  5. Keith Instone

    August 11, 2011

    The term “New Manufacturing Economy” may hold some promise to help people see the relationship between manufacturing and innovation.

  6. Christine Crandell

    August 11, 2011

    Innovation comes in a number of different forms – products, business models, services, etc. Innovation is not restricted just to manufacturing. I do believe that we (USA) have an opportunity to invent and innovate and must rebuild the manufacturing sector. The focus on price and margin is very important but has resulted in terrible quality across the board – from car to medical drugs. Somewhere in there is an opportunity to invent new manufacturing processes to build tomorrow’s new inventions.

    For me the bigger question is – do we have the will?

  7. Slim Fairview

    August 11, 2011

    “Innovation is crucial. Not only in what we manufacture but how we manufacture.” Slim Fairview

    Competition has revolved around cost to produce and price in the store.

    We can come up with better products, beat competitors to the market, enjoy market penetration, and enjoy some lead time, however, no matter how much you cut costs you are not going to sell a lot of Oldsmobiles in a country where people make $5 a day.

    Case in point:

    Innovation in the auto industry is one issue. Where we build those cars is another issue.


    As Yogi Berra once said, “In theory there is no difference between theory and practice. In practice, there is.”

  8. Brad Evanson

    August 12, 2011

    Ed, this was an excellent article, and hopefully it will spark the kind of consideration that our economy needs to pull itself out of the hole it’s fallen into. As I see it, if we were a society of 100% highly-educated and creative types, the argument that the focus needs to be on both innovation AND manufacturing might not work, but we are a diverse society with diverse levels of education and ability among our populace. Furthermore, look at the countries that we have been exporting our manufacturing to (Japan, China, India, etc.). The high level of manufacturing is actually educating those citizens on how things work, which enables the potential for innovation. Whether governmental ineptitude or restriction stifles innovation (see Mexico) is another story. Finally, look at how chained the US is to oil producing countries. If we export all of our manufacturing capabilities, we make ourselves that much more dependent on those countries who manufacture our goods, and thus really open ourselves up to the risk of a supply disruption beyond our control.

  9. Arv Hardin

    August 12, 2011

    Excellent insights into a key economic issue for the US, Canada and Western European economies.

    Manufacturing / production and long term success and survival are inextricably linked. In my opinion both incremental innovation and disruptive innovation are dependent on people working on the shop floor. They are the ones who see on a day-to-day basis the details of how the business process works, what it’s flaws are and how to make improvements in it.

    Moving work offshore serves only a short term goal of reducing operating costs. What is lost is the in-house capacity to recognize the improvement / innovation opportunities in close proximity to the key decision makers. Alan (MIT) showed some years ago that the effectiveness of communications drops off very rapidly with distances above even 10’s of meters, even with advanced communications tools.

  10. sally stevens

    August 12, 2011

    I have been working toward getting the ED & WIBs of cities to consider the start-up and development of worker owned cooperatives as a viable economic development strategy. There are many long established worker owned enterprises in our nation such as the Associated Press and Ace Hardware to name a few. Producer owned cooperatives in the agriculture industry are also very common and about the only way that family owned farms have been able to stay in business in the face of big ag corporations. Cabot Creamery is a great example a producer coop and has been in existence for about 100 years. More and more cities are assisting domestic workers form worker coops so that such workers may receive better wages and benefits as worker owners and last year the U.S. Steel Workers Union formed a cooperative endeavor agreement with Spain’s Mondragon Cooperative (that nation’s 7th largest corporation, employing 100,000) to assist in getting our nation’s steel workers back to work. Many businesses are forming as worker cooperatives since very often people want to start a business but as individuals do not have the capital or the clout necessary. I think in terms of rebuilding the nation’s infrastructure this is also a viable option as worker owned coops are generally better equipped to offer apprentice programs toward training the next generation that will have to continue the process. Also worker/producer owned cooperatives are beginning to prove to be a viable way of bringing musicians, artists, performers, etc. out from under the rubric of the informal economy and further develop our nation’s creative cultural economy. My two cents.

  11. Karen Schultz

    August 12, 2011

    Manufacturing indeed enables innovation. My first exposure to a contract manufacturing company was 9 1/2 years ago. My first words after a few minutes of observation were filled with a sense of awe and the realization of accomplishment. I immediately looked at these amazing people as artisans of great works. Nine years later I have continued to love who I interact with and discuss all that is involved in these important foundational works within the United States and how heavy my heart is that I find it so difficult to employ more people and offer them so many great opportunities. I have enjoyed going from concept to a manufacturable design to production on new innovative ideas. New ideas need the collaboration of many talents.

    I can remember attending round table discussions and workshops to understand how can we use nanotechnology and more importantly if we come up with an idea, how do we make it, manufacture it, test it, and use it to create products for consumers? Do we have the ability to make machines to cut it, assemble it and test it? This was truly an amazing long conversation. And yes we have figured it out during my time in manufacturing. The conversations are amazing. Taking an idea, a concept to an end result that creates many jobs and wonderful opportunities is a bigger than life experience.

    Trade schools have vanished. Our education system lacks art programs that weave math and science together to create and innovate. I have worked in education and I have worked in communities and now in manufacturing. I am talking to everyone I can to wake us up and take note of how valuable our foundation of innovative abilities to make things have faded. It is hard work and work that challenges its workers every day. Not many can handle that every day, but our workforce thrives on the challenges of this dynamic company of 80 people who have a right to be proud of doing their part in keeping the skills of machinists alive. These skill sets are incredible. Our company vision is to keep American manufacturing strong and highly respected. This is important to strengthening Brand America. Day in and day out we continue to look for improvements no matter how well we thought we did it last time. Each of us works hard to do what we can to be competitive in a global world where the playing field is not always level. WE continue to invest in our internal and external teams. WE depend on the forgers, the foundries and the material manufacturers to provide us with the materials to mill, drill, turn, weld and grind. We support the designers, the engineers, the assemblers and the end users. The following statement is about the manufacturers of America and believe this is an appropriate place to state the importance of manufacturing that most people do not really understand as the foundation of our country and important to our security and freedom.

    I would like to share this with you, America.

    Ask a foundry man what they do and they might humbly say that they, “Melt metal and pour it into a mold to make a casting.” “I am feeding and clothing the people of the world. I am purifying and transporting the water people drink. I am digging the world’s coal and drilling its oil. I am building thousands of miles of highways and railroads, and the locomotives, trucks, and automobiles that travel over them. I make the airplanes that fly through the air, and the ships that ply the seven seas. I make the tools with which man accomplishes their work and I must sadly admit that I make the implements of war with which man attempt to destroy their kind. Product s of my foundry are in the hospital delivery room, where we are born, in our homes and at our workplace where we live and invest our time, as well as in the mortuary when they die. Throughout their life, I have bettered their standard for living to a point where the working person of today lives in splendor undreamed by the kings of the Middle Ages. I have put man into orbit around the earth and I have sent them safely to the moon and back. In the process of all these accomplishments, I have made a positive impact on the world’s environment by recycling their waste and transforming it into useful products. It is no wonder that: “I am proud to be a Foundry man!”

    ….and I am proud to be part of bringing it all together!

  12. Karen Schultz

    August 13, 2011

    There is seldom I find a man who can speak my mind, but I believe the passions of Mike Rowe are shared with the best of intentions to WAKE UP AMERICA ‘s reality and understand how education has failed us in so many ways since government became involved. Sustainable communities, social capital, strong state government and regional governments are incredibly crippled in the United States. And why would we follow the processes of older countries who are in worse economic shape than the US? I find this course of action the absolute opposite of an innovative society.

    I live and breathe education and manufacturing everyday and it is my passion as an artist and communicator that has been researching and writing and reading and growing to understand the importance of working at what we are passionate at and love each and every day. WE have done everything we can to say that is just not possible. Being miserable, working far from our instilled values, and just making a lot of money is the meaning of success. Most degreed people do not have a clue about making anything and continue to push down prices and dissolve companies out of business. This is an incredible place we have spiraled into because of the lack of exposure educators have to preparing their clients to be employed productive citizens in the United States. What are you going to do to change this America? Making things in America is no less important to serving our country. I propose we look at the hierarchal theories we have believed in and shift boldly to a new theory of what that looks like moving forward.

  13. Al Jones

    August 13, 2011

    Good piece. When you think about it so much of the discussion about innovation clearly assumes it’s only done by very highly educated people probably with research university involvement. Actual innovation comes from everywhere and everyone, generally ones with the least fettered minds about how things have to be done. In new products it’s not just one idea that matters, it’s the substantial amount of problem-solving (innovation in it’s workclothes) on all of the questions that follow, especially how to make it in a viable and quality fashion since what worked on a few prototypes built by the inventor or design team is a long, hard journey of many more innovations to be manufactured. When you work with manufacturing, hundreds if not thousands of innovations are routine and frankly essential. When you work in the “creative arts” which are a lot more about craftsmanship in reassembling existing bits and pieces…closer to automotive repair than we care to admit (I have an Art B.A., worked with musicians, novelists, sculptors, etc…it’s a craft field no different from fine woodworking, tool and die making, CAD, etc. but it’s just had better publicity.) Soaring genius and world-shattering paradigm shifts are surprisingly common in manufacturing because of the endless challenge, the pressure to solve thorny problems, and the learning that occurs. I find very bright people on the shop floor with considerable curiosity, they’re just not comfortable in a faculty lounge. Innovation without manufacturing is the easiest innovation to cross borders, go to the lowest cost provider, lose intellectual property protection (i.e. music and movie piracy), and most ephemeral. Invent the programmable electronic computer, the semiconductor, the Cisco routers, the Apple I-pod, the Caterpillar Bulldozer, etc. and you create vast enterprises and whole industries, create a snappy song full of the current musical conventions and structures with the right production values and you might have a popular song for a few weeks (oops it requires considerable manufacturing prowess to turn a song lyric into a finished piece of recorded music in distribution.)

  14. Ian Zeitzer

    August 14, 2011

    “Is innovation really possible without making things?” By definition, YES OF COURSE, and I think its the narrow definition assigned to the word “innovation” tied exclusively to manufacturing that has helped handcuff our climb out of this recession. To paraphrase Gary Shapiro – manufacturing is no longer our strong suit as a nation and frankly that’s not such a bad thing.

    To assume that “making things again” is the best way we can create jobs or turn the tide on trade deficits is too simplistic and antiquated for a complex economy like America’s. I can quote several examples of service sector innovation, particularly in the tourism industry and outside the obvious example of online travel agencies, that have changed the way people consume travel & entertainment and henceforth stimulated both destination economies and innovative businesses. And whether we’re talking about a foreign buyer for an American car or a week in an American hotel, its all working towards balancing our trade deficit. Everyone is so quick to dismiss a service economy, but its naive to think

  15. Mary Welsh Schlueter

    August 15, 2011

    RE innovation and manufacturing: You can’t have one without the other. Innovation serves as the key for long term and competitive growth for companies. if you don’t innovate, you die.

  16. David

    August 19, 2011

    Innovation and manufacturing have always been the catalysts to economic strength. This is why American has histocially been so advanced. Our country led the initiatives to improve efficiency in agricultural in the 1800’s. Later we streamlined manufacturing during the industrial revolution. Recognizing this, I personally created and submitted a plan to the Obama administration that would have offered innovation grants to small businesses which would make a pledge to hire two full time employees within 12 months and to source all raw materials and manufacture all products domestically. My plan would have spent only .05% of the stimulus budget and would have led to 60,000 jobs and hundreds of millions in domestic manufacturing revenue within three years. Unfortunately, they declined to implement my plan and chose to spend billions on paving roads which ultimately employed a few more minimum wage workers on a temporary basis and made paving contractors very wealthy by paving roads that didnt need to be paved. I dont intend to make a political statement but the reality is that until we have an administration and elected officials that recognize the importance of innovation and manufacturing, we will continue to decline in global significance.

  17. Ed Burghard

    September 6, 2011

    What would happen if the United States embarked on a mission to create the capability to be energy independent? Would it stimulate innovation like the mission to put a man on the moon did? Could it even be accomplished without manufacturing playing a mission critical role?

  18. Karen Schultz

    September 7, 2011

    To answer Ian paraphrasing Gary Shapiro –” manufacturing is no longer our strong suit as a nation and frankly that’s not such a bad thing” .

    Though it is true innovation can take place in the mind of a visionary without manufacturing, it remains just that… innovation in the mind of someone with a creative thought process. It may be easy to come up with an idea or a design without manufacturing…..though I would first question how you would record it for the long term. First I assume you would be dressed when coming up with the idea, and you would need some paper and a pencil or pen to sketch your ideas. And the ideas would be based on what questions, possibilities and opportunities? And the materials you used to do your research and development?

    I think I could go on for quite some time but will leave you with a different point of view:
    Source: Saugatuck Technology Inc. and BusinessWeek Research Services C-Team Study (Dec. 2006); N=443

    No doubt, investments in technology are and have been a leading driver of innovation. However, there are many other forms of innovation – organizational, business model, cultural. In fact, further research that we have conducted suggest that roughly half of the CEOs (and more than 60 percent of COOs and CFOs) believe that organizational transformation is necessary for long-term survival.

    In contrast to the enthusiasm by most C-Team executives to embrace innovation as a key means of driving growth, CMOs appear to be almost jaded about the current innovation mantra circling corporate boardrooms – believing instead that other forms of corporate investment (e.g., marketing and promotion) will yield greater top and bottom-line results (see C-Team Research: Innovation Divergence May Inhibit Investment, RA-320, 21Feb07).

    I am glad for the creative group who gave breath to our Constitution, had the vision it can be done and its very words gave us the opportunity to make it happen. The United States model of freedom gave breath to innovation but I believe manufacturing is what gave innovation life.

  19. Karen Schultz

    September 7, 2011

    To address equally Andrew Liveris, (CEO of Dow Chemical) whorecently authored a book entitled “Make it in America” that discusses the unexpected implications of an interdependent global economy and concludes America needs to be both a service AND manufacturing economy to create sustainable health in the economy. He claims that countries with large populations cannot thrive on service industries alone and must have a robust manufacturing base to ensure broad employment.

    Living systems must be holistically nourished in a balanced way.

    To make a point we can all understand, business and personal portfolios must be balanced and diversified to remain healthy.

    My experience of the past 9.5 years in manufacturing has taught me how difficult it is to diversify a business in both industry and customer base with an integrated cross trained work community. It takes investment, lower profits, risk and staying true to the compass but the rewards are building a high knowledge based workforce where layoffs are incredibly low and the experiences are priceless. Loosing people in downsizing also looses the holistic invaluable systems and processes learned for improvements that grow competitive approaches and profits with time. It is the long term solution to healthy business. And yes it takes industry leaders to understand the cost and its value in the innovative thought processes that grow the business at a grass root level.

  20. Ed Burghard

    September 14, 2011

    This WSJ article suggests the key to Brand America’s economic turn around may be manufacturing –

  21. Brian Dowling

    September 16, 2011

    Over at the LinkedIn IEDC group Della Rucker has posted on the Freelance Surge in our economy. while at the LinkedIn MIT Sloan group the Trial and Error views of Tim Harford are being highlighted. These are two other aspects underlying a paradigm shift in our society. My interest is in whether we can bring some of this innovation to our public policy discourses so that it can support these efforts not only when convenient as a political means of implementing an stimulus to help national economic problems but as part of the structure of our local communities. I know that there are hopeful stellar examples out there such as Michael’s CBBIC but the fact that they are stellar means they are few. The world is changing and many are being left behind. Like Ed these statements are more hypothesis for further contemplation.

  22. Michael V Franchell

    September 16, 2011

    Somehow in the past 10 years creativity seemed to have been captured by the Universities and that the billions of dollars pouring in as grant money was to create new concepts and new ideas and possibly new products. The simple fact is a University only has a few great ideas and the rest of the concepts are all worthless. We had a meeting at the Controller’s Office for the state with CBBIC and a high tech startup. The person we were talking with wanted to know how we could get more great ideas out of our Upstate Colleges. The person I was with had his wife teaching at a University and he frankly told the individual that most professors are not interested in starting companies and that the state need to look outside of the University System and look at community based entrepreneurs. In 2006 New York had the second highest amount of grant money in the US. The results of that money have yet to be seen.
    Creativity is not a IQ related concept. It is an intuitive way a person thinks and resolves problems. That is one of the reasons actually came about was we were frustrated with our local academic folks who seemed to distain any idea that did not have academic credentials behind it.
    When I look at the creative companies we are working with 2/3 of them come from the blue collar environment and 1/3 comes from academia.
    In Upstate we have about 20,000 people involved in our Universities and only a small portion of them are into any creative entrepreneurial activities. If you are in fronology or in ornithologist you are not in the correct areas for job creation.
    Meanwhile we have 9 million people covering 46,000 square miles where they lack capital to start their creative company and we are aggressively pushing the concept of GAP funding because our economic development is withering in many locations in Upstate. We want to leverage the enormous untapped creative potential of our community based entrepreneurs and be transformative in product creation so we can compete with anyone anywhere on quality, access and cost.
    Al nice seeing you in print again. I still want to push your creative buttons more. Brian thank you for the positive words. continues to add more and more supporters throughout Upstate. We have some Chambers that have come forward and want to work with and I think you would guess the ED folks run when we approach the microphone
    To get back to Ed’s original question. We certain do believe that manufacturing and innovation must be part of the same package of our re-industrialization efforts. Right now we believe that Pipesnapper has a tools that can increase the efficiency of a pipe welder by 50%. If you are interested go to and watch their video on their web site. Ed you will enjoy it and Al I think you are much more creative than you are showing and Brian – thank you for the positive comments.
    Our web site is adding transformative material as we speak.

  23. Brad Evanson

    September 18, 2011

    A key point in this article is the consideration of manufacturing as an economic enabler, as opposed to a competitor of other facets of the economy. Many of us following this discussion here and in other locations have been vigorously pushing manufacturing as not only a simple jobs creation tool for our current economic situation, but also as a long-term contributor to a diverse and stable economy. An interesting aside to this is the role that services can play in this. Not to understate the importance of services, but at many levels they are even tangentially related to manufacturing, in that they provide direct support to manufacturers (shipping, equipment sales/service, etc.) or they provide indirect manufacturing support (i.e. a restaurant that serves workers in a factory). Overly simplified, perhaps, but it does underscore the need for and value of jobs across the entire economic spectrum, to provide a stable economic base. And again, manufacturing (perhaps as an overly broad description/definition) is a key element to this economic base. At the core, our individual economic activity can be distilled down to “we buy/sell/use/consume stuff.” This “stuff” has to come from somewhere, so why not start making some of this stuff ourselves (again)?

  24. David Lindahl

    September 19, 2011

    I made a comment on the LinkedIn group where I found this interesting discussion. Brad, above, already mentions the important role of services, but I will post my original comments here:

    While there has been a resurgence of the “Manufacturing Matters” arguments (and it does..), the real action continues to be services. That is, professional services, producer services, and those that most of the people in this group likely are part of. A “service” that provides regional exports (i.e., say more than 1/2 of a computer consultants’ clients are outside their home region) brings in the same dollar to the local economy as the fabricated metal operation. And, they DO have linkages that can create similar or even far greater multiplier effects than their manufacturing counterparts, even for small city and even rural economies.

    The economic development world continues to focus on “things” such as manufacturing, or “sexy” areas such as technology or bio-tech. There are a myriad of other professions in the services arena that do not follow the trendy vogue of regional clustering analyses — they are found in the NAICS codes which are the most difficult to categorize.

    As a personal example, I design trails — a very specialized but growing industry. Our firm’s clients are about 80% outside the region in which I reside, and there are few in this particular industry. But, we spend our money just like a manufacturer, have a high degree of innovation (and hire other firms to help us in that process), and collaborate with other entities locally and across the country (and internationally). That sounds like an economic generator to me — just like the auto parts manufacturer 10 miles away. David Birch is still right…

  25. Jeff Lebow

    September 28, 2011

    If we do not make anything, we are in big trouble. Innovation goes hand in hand with products, much more than service. One of our big challenges I have seen is that the majority of our manufacturers do not make proprietary products and lack an innovation culture. Many have either inherited the business or worked their way from the shop floor to owning a business that finds it’s home in a supply chain to other manufacturers making their products. They end up being “order takers” and lack a history of innovation. Innovation to them is finding new orders. Ask a manufacturer what their innovation process is. Most will not have one.

    A real dilemma for our economy is that innovation will not provide sufficient jobs to rehire the millions now out of work. The only possible answer is for our country to take a serious look at our trade policies and the balance of trade between our major partners. Think China. China has a protective policy that results in employment of their workforce. Try to start a business in China without a Chinese partner. If the US replaced our “free” trade policies with bilateral negotiated trade agreements, where our partners either bought more US made goods or built production facilities here to serve our market, that would create opportunities for American workers at all skill and educational levels. Evidence for this is the automobile manufacturing of Japanese and German vehicles in the US. Initially the Japanese set up manufacturing because there were tariffs on imports. They got around them by making them here. A win-win I say.

    That we hold economic development conferences without discussing trade policies is beyond me. The solar plant in MA employed 800 until Chinese panel pricing put them out of the manufacturing business. It will do us little good if we innovate and export production. If we want to grow a technology sector where the scaling happens here, we are going to have to protect these industries from off shore competitors that can pay their workers what Americans can’t live on.

    I am so sick and tired of folks who drank the free market Kool aid. America is being destroyed by multinational corporations who, appropriately only focus on profits.

    As said by others,the downstream impacts of manufacturing flight is the innovation that follows.

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