2013-09-27

Co.Exist

The 4 Technology Trends That Could Bring Back U.S. Manufacturing (And Innovation)

To keep innovating, we need to keep making things. Here's how we can reinvent the country's ability to make things, so we're not just an economy of ideas that we send overseas for others to put together.

More than 20 years ago, MIT conducted a landmark study that revealed how the declining state of industrial productivity is the biggest challenge to building globally competitive businesses in the United States.

But we now live in an entirely different world. This month, the university is concluding a major two-year research effort that follows on the 1989 "Made In America" report, and the findings focus on a very different problem American business is facing: the "gaping holes" and "missing pieces" in the industrial ecosystem that make it difficult to bring new ideas to the marketplace.

The results of the "Production in The Innovation Economy" Commission's work are told in a new book, Making in America. For the study, overseen by the commission, MIT engineers, social scientists, and management experts interviewed and visited more than 250 firms in the U.S., China, and Germany in order to compare trends in leading manufacturing nations. "What we tried to do is sort of stand back and say what’s changed," says Elisabeth Reynolds, executive director of MIT’s Industrial Performance Center. "We know we’re strong in innovation in this country—and the question is how important is production to that strength. What we found is that it’s critical."

That critical link is more than a bit worrisome. The interviews told the story of manufacturing operations sent abroad—both by big firms, and more importantly, by startups that are just beginning to scale up new ideas. It’s one reason that a growing number of academics, businesses, and policymakers (including the White House) are focusing on incubating the technologies they feel will be critical to keeping manufacturing in the United States. It’s not just about pure year-to-year job mathematics, but about keeping the next generation of global businesses in the U.S.

Here are four trends highlighted by MIT’s Reynolds and Associate Provost and professor of electrical engineering Martin Schmidt (both leaders in the study) that could be crucial for convincing innovative companies to keep making products in the U.S.

1: The Cost of Human Labor

Highly adaptive, low-cost robotics are making manufacturing operations less sensitive to the cost of human labor. As labor costs in China rise with wages and higher standards of living, and as advanced economies develop more automation capabilities, the practice of companies "offshoring" for the purposes of accessing cheap labor pools may fall out of vogue.

2: The Cost of Capital Investments

It used to be that a company would have to invest hundreds of thousands of dollars in building a production line before making one single cheap widget. Now, with additive manufacturing (a term which includes 3-D printing technologies), companies can start to design distributed manufacturing operations that "scale with the market they serve," says Schmidt. Making things "at the point of use or point of need" will help small companies that make products in the U.S. stay competitive.

3: The Cost Of Energy

Manufacturers in energy-intensive industries like cement and chemicals have celebrated the shale gas revolution, which has brought cheap domestic energy and lowered the cost of their operations. But it’s not just brute force drilling that could change the energy calculus for many companies. New biological methods of manufacturing materials or compounds could lower the amount of energy that is required in the first place in some sectors, according to Schmidt.

4: The Need For Speed

"Anything we can do from a technology perspective that accelerates that time from invention to production is a winner," says Schmidt. Pharmaceutical companies like Novartis, for example, are experimenting with "continuous manufacturing" processes that replace the need to synthesize drugs in discrete, costly, and inefficient batches.

These aren’t all comfortable ideas. Advanced robotics could replace human jobs, even if it ultimately makes it feasible for a firm to stay on domestic soil. Shale gas offers cheaper energy that is crucial, but there are obvious environmental and social costs to the boom in fracking for energy production.

What jumped out most to the researchers involved in the study is that both Germany and China tend to have more supportive environments for incubating innovative manufacturing companies at every stage.

As an example, Reynolds notes that a product as seemingly simple as Bose’s quiet headphones took 20 years of development to bring to the market. But more often today, in the U.S., it is small companies and startups that are doing the initial product development as large firms cut down on their support for internal R&D. "That model is now over," says Reynolds. "Find 20 years of funding for a small startup. You can’t," she notes.

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  • virtualCableTV

    There is one and only one trend that is critical to the future of America and that is the trend the government itself has been reporting. If we continue to be cowards lacking in integrity and character required to respond to the most dangerous trend America has ever faced we won't need to be concerned about manufacturing or much of anything else.The trend is the breeding of the Negro race and the importation of millions of illegal aliens both groups of which the US Census Bureau reports will out number the Caucasian "white" race in America ~2040.

    We know we can train a Negro or a Mexican to push some buttons and pull some levers but the honest facts of the matter are after the 1952 Board of Education vs Brown Supreme Court ruling mandating Negroes be allowed into schools and forcing our schools to become segregated nothing in America has been the same as it pertains to the nation's ability to educate its population producing sufficient numbers of white persons from which emerge the advanced level of intelligence required to design and engineer STEM products and services.Racism is real for a reason. The replacement rate for white children in America is at or near zero while the Negro race has been and is being paid to breed in numbers which are astounding when looked at rationally.

    The Russian people have for some reason had the same decline in birth of white babies which appears to be a global trend. The Russian government has responded. The American government has not. What America governance has become is basically a Democrat political party imposing Communism which buys the Negro vote with welfare. This has undermined the white race in America as the weakest amongst us has fallen into that life style themselves.The Republican political party imposes Fascism as its preferred form of ogvernance and is now bidding to buy the Mexican vote the sae way the Communist Democrats buys the Negro vote.

    This leaves white people in the middle without genuine representation, a dwindlng population with dwindling resources, a population which is not going to be sufficient in numbers to produce the genius intellect required to design medical equipment, engineer aerospace and nautical machinery required to defend the country.

    Within several short decades there will be no more genetic engineers in America because there will be nobody within the population that can master the science required to maintain and progress in the discoveries required by the demands of an impending future which day by day is being mastered by other races from other nations of people who are not snivvling cowards afraid to be called racists by the very race whose presence is predominantly causing the decline of America.
    We must have the courage, the integrity and the character to do what must be done. "We must secure the existence of our people and a future for white children."

    Unless the US Census Bureau is govered by liars and frauds we must accept what they are reporting a it pertains to populatin growth and its impact on the nation.The future of racial politics, population and social engineering and the ensured survival of the white race sufficient in numbers to continue to produce the masterful results the white race has produced for the benefit of the entire world's population is the only trend that really matters.