Innovation Gaps Slow US Manufacturing Revival

Guest blogger: Peter Dunn

An MIT team has identified problems that are inhibiting the revival of American manufacturing.

In the 20th century, flagship R&D organizations like AT&T’s Bell Laboratories and Xerox’s Palo Alto Research Center generated new technologies like the transistor and the graphical user interface for their parent corporations.

Today, that integrated approach to technology commercialization is largely gone. Basic R&D typically begins at a university or startup, with manufacturing handled by outsourced partner companies, often offshore.

And that's a problem. MIT’s Production in the Innovation Economy (PIE) project just published two MIT Press books and hosted a September conference reporting the results of their three years of research and analysis on the subject.

• Drawing on 255 interviews in eight countries, the PIE group found that the US innovation ecosystem has significant holes that inhibit new breakthroughs from entering manufacturing and limit the growth of innovation-driven US companies.
• Another important finding: prototyping, pilot production, and volume manufacturing not only create good jobs, but they are also fertile ground for innovation and learning, which feeds back into R&D.

“One of MIT’s great strengths is our ability to research and analyze broad questions that are rooted in technology, but engage many aspects of society,” said political science Professor Suzanne Berger, co-chair of PIE. Researchers included more than 20 MIT faculty members from engineering, science, economics, plus political and management sciences. Conference speakers included decision-makers from Dow Chemical, the Commerce Department, NIH and NSF, organized labor, and startups.

“With lower energy prices due to natural gas, rising labor costs in Asia, and more-realistic views about the constraints of outsourcing, there’s a moment of opportunity for rebuilding manufacturing in the United States,” said Berger. “That could help innovation get to market in higher volumes and faster.”

At the conference, MIT President L. Rafael Reif announced a new Institute-wide initiative on Innovation, similar to the MITEI energy initiative, with a focus on methods for accelerating the incorporation of innovations into products, including policy research into manufacturing and education.