The manufacturing community is and has been painfully aware of the critical importance innovation and product development play in the competitiveness of their organizations. Survey results tell the tale, with nearly three-quarters of respondents to a Boston Consulting Group survey ranking innovation among their companies' top three strategic priorities. A far smaller percentage has been satisfied with the payoff of their efforts.
The U.S. government appears more recently to have fully acknowledged the role innovation and product development play in the creation of a dynamic economy, particularly with regard to job creation. The Advanced Manufacturing Partnership is evidence of that increased awareness. In June, President Obama launched the partnership, a national effort to invest in emerging technologies to grow jobs and enhance U.S. competitiveness. Accelerating product development is key to reaching those goals, the launch announcement noted. The plan includes a $500 million investment to start the effort.
"With these key investments, we can ensure that the United States remains a nation that invents it here and manufactures it here," the president said at the announcement of the Advanced Manufacturing Partnership.
The growing focus on innovation and product development as keys to competitiveness raises a number of questions: What is the manufacturing community -- not only manufacturers but all the players who contribute to the health of this sector -- doing to be more successful in their innovation and product development efforts, and what should they be doing?
This article marks the third in a four-part series on the competitiveness challenge facing the United States and its manufacturing community, highlighting the areas of innovation and product development. It explores those questions through the words of three product innovators.
Eaton: 'We Need Innovation to Grow'
If you want to grow your company in any significant way, innovation is a required element. That's Eaton Corp.'s perspective. The Cleveland-based power management manufacturer aims for 12% to 14% growth every year "and the lion's share of that has to come from organic growth," says Michael Wynblatt, Eaton vice president for engineering technology.
Organic growth typically requires grabbing a larger share of an existing market or entering entirely new markets or segments. These options require purchasers to either give up a competitor's product or possibly buy from a company with which they are not familiar.
"Why is someone going to start buying Eaton, maybe for the first time ever? Probably only if the product is very distinctive, and has high differentiation from what the competitors have," Wynblatt says. "Innovation is the way that you get there."
Those highly differentiated products also deliver higher margins, he notes.
Wynblatt helps drive Eaton's innovation efforts. He is responsible for Eaton's Innovation Center. The center is spread across six locations globally, four of which are in the United States and one each in India and China. Wynblatt is based in the Southfield, Mich., location. The center employs about 100 individuals.
"We have the job to think about what could be those innovative new products," with a particular focus on advanced technology, explains the Eaton vice president. As such, the team is focused on developing the highly differentiated nuggets of technology that can lead to innovative products. In addition, the innovation center validates product ideas, working closely with Eaton's business units. The idea is then turned over to the product development organization.
The upfront work is extremely important, Wynblatt emphasizes, given the expense of product development. "To make that kind of investment, you want to make sure that the product is going to work and that customers are going to want to buy it," he says.
The Eaton Innovation Center has evolved over time and continues to evolve, Wynblatt says. It began as a corporate office on research and development, focused more strictly on technology than the current model and less on tying those technologies to innovative products.