Helping Industry Innovate
In their important new book "Producing Prosperity," Gary Pisano and Willy Shih argue that policymakers need to focus on helping American manufacturers innovate. The two Harvard Business School professors observe that manufacturing innovation is most likely to occur within America's "industrial commons" -- communities of manufacturers, suppliers, research labs and skilled talent in geographic proximity that support each other and lay the foundation for such innovation. Such clusters can provide a nation its competitive advantage.
Unfortunately, over the past two decades, these industrial commons have started disappearing from our shores. From machine tooling to LED lighting and LCD displays to rechargeable batteries to semiconductor production, much of this nation's technological knowledge and infrastructure has left for Asia. When such industrial networks vanish, we lose both the production and, eventually, the innovation associated with their industries.
This depletion isn't natural or inevitable. Rather, as Pisano and Shih observe, much of it is the consequence of a multi-decade "high stakes experiment" to see if our economy could prosper without manufacturing, an experiment in which both public officials and private-sector leaders have played a hand.
The experiment seems to have come to an end, judging by the reshoring of production and new investments by manufacturers in this country. The next step is for policymakers to resolve to develop a national strategy to ensure U.S. manufacturers maintain their innovative capacities. Reviewing the policy prescriptions of Pisano and Shih would be a good place to start.
Stephen Gold is president and CEO of Manufacturers Alliance for Productivity and Innovation, Arlington, Va. (www.mapi.net).
