American Innovation and Manufacturing

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American Innovation and Manufacturing

There has always been an explicit relationship between innovation and manufacturing: new products and processes migrated to the production floor, and profits that resulted from manufacturing were invested back into research and development.

But, that’s not all. Traditionally, engineers and designers have been in physical proximity to the
production plant where their ideas were commercialized. They could see first-hand what was working and what wasn’t. Consequently, engineering helped manufacturing, and manufacturing helped engineering.

But, in the age of globalization, that’s changed. Pressured by economics, most U.S. manufacturers went out into the world seeking cheaper labor, while R&D stayed behind. The traditional links broke down. For some industries, this worked just fine, at least for awhile, but for others it did not.

American industry has now reached a critical crossroads where its position as the world’s innovation leader is on the line. If the United States is to regain and solidify its leadership, it must decisively relink innovation and manufacturing.

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Let’s consider some relevant statistics from the Global Innovation Index 2011:1

  • Among the 125 economies analyzed, the top seven most innovative nations, in order starting with number one, are Switzerland, Sweden, Singapore, Hong Kong, Finland, Denmark, and the U.S. Among large countries, the U.S. remains the number one innovator.
  • China is ranked number 29, well below the U.S., but up dramatically from number 43 in 2010.
  • Notably, the top 30 countries are spread all over the world, not clustered in the expected places like Europe and North America.

This globalization of innovation is understandable. As opposed to the Industrial Revolution, which rewarded countries that had abundant natural resources, the Digital Age is driven by smart, ambitious individuals who can be found almost anywhere, in any country. So, no nation can be said to have a monopoly on innovation.

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A Snapshot of U.S. Innovation Clusters

A selection of high-tech clusters in different parts of the country

The good news is that the U...

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