Manufacturing in America – Competitive Advantages: Innovation

18/10/2011

US is one of the most innovative economy. Whether you measure it by the number of universities, research centers, patents created, the noble prizes, or anything else; we have always been at the cutting edge of innovation in last many decades. A large number of these innovations has come from our university system. The graduate and post graduate degrees and the research work conducted here is the envy of the world. Many of the famous products that we take for granted today were seeded in the walls of the universities here.

The atmosphere of research is not limited just to the universities. Most large US corporations have always maintained a substantial research and development (R&D) centers. From famous Bell labs, Xerox, Microsoft research to Caterpillar and the likes continuously produce not only improved products but products that did not even exist yesterday.

A continuous flow of new and improved products is a lifeblood of any entrepreneurial activities. Creating new companies and factories where none existed before. Most people think of innovations when it comes to technology or internet. Who has not heard of companies like Google and Yahoo and Facebook. They, however, forget or have not celebrated numerous innovations that have taken place in manufacturing arena. These are the products that we may not see in everyday headline. The big mining truck from caterpillar, agricultural combines by John Deere and so on. These home grown products are envy of the world. You may be surprised to know that a US company even exports chopsticks to china.

Consider mobile phones. In pre-iPhone and android days, Japan and Korea were the kings of the smart phones. Nokia had the largest market share of normal mobile phones. This was an industry everyone believed that we have lost for ever. Last few years, with iPhone and Android we once again dominate that industry at least for the smart phones. However, I do wish that more of these smart phones were manufactured here.

The list of products that we have introduced in last few decades could fill the pages of a book from cover to cover. I can not name another country which has produced more innovations during any time period. And I don’t foresee that edge diminishing any time in near future. A continuous influx of new ideas gives us a strong edge in jumpstarting the  manufacturing sector once again.

Product innovation is not the only thing we excel at. There is a strong culture of process innovation as well. Most supply chain, quality control, factory automation, testing, technology, warehousing innovations etc processes were either developed here or at least seeded.

I worked as a Chief Scientist for a supply chain software (now acquired) company over a decade ago. We were supplying the software to countries like Japan and Germany. Yes, these two countries are considered to be at the forefront of manufacturing. The factories there were scheduled using software we developed here. Since then we have lost some of the ground to software companies from other countries.

Now combine the other two competitive advantages we have – raw material and skills – with product and process innovation and you see a powerful picture emerging for manufacturing in America.

{One of the question we do need to address is why lost and still continue to loose manufacturing base. I do intend to cover this topic in detail. Not just yet.}

In the meanwhile, I believe that a continuing or even accelerated investment in research and development in manufacturing would ensure that we do not loose our edge. Investments in both product and processes; in engineering and technology and yes in arts and mathematics. Any one questioning arts should just look at the creations of Steve Jobs.

There are 4 comments in this article:

  1. 18/10/2011Manufacturing in America – Competitive Advantages: Raw Material « Mani Agrawal says:

    […] Innovation […]

  2. 19/10/2011Manufacturing in America – Competitive Advantages: Brand « Mani Agrawal says:

    […] Mani Agrawal Thoughts that keep me awake Skip to content ← Manufacturing in America – Competitive Advantages: Innovation […]

  3. 23/10/2011Impediments to Manufacturing in America: Shifting Global Middle Class Consumtion « Mani Agrawal says:

    […] It would make sense that US manufacturers would be inclined to locate the plants closer to their customers. This is especially true if they can not leverage the natural competitive advantages of locating a plant in US. […]

  4. 1/11/2011Export or Shift Manufacturing: Impact on Inventories to Meet External Demand « Mani Agrawal says:

    […] In this scenario manufacturers can easily leverage our competitive advantages like “made in USA” brand that could be easily diluted by shifting the manufacturing outside. Similar arguments can be made for the new products. Perhaps this is why manufacturing innovation is so important for our economy. […]

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