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MIT Commission Finds Manufacturing Collaboration Key to U.S. Innovation Future

September 26, 2013

Last week, the Massachusetts Institute of Technology’s (MIT) Production in an Innovation Economy (PIE) Commission released its findings from two years of research on how to remove the barriers that prevent the U.S. from turning its strengths in science and research into jobs, businesses and products. In order to ensure that American innovations reach the marketplace, the U.S. must rebuild its manufacturing sector, with particular focus on improving the support ecosystem for smaller advanced manufacturing firms, according to the commission. The commission’s recommendations include a variety of public-private partnerships and industry-university collaborations to drive innovation and commercialization across the country.

The PIE study centers on two key questions: what are the production capabilities in the U.S. and abroad that are vital to sustaining and exploiting technological innovation; and, what are the resources and linkages required to deliver innovations to the market. This exploration, conducted with statistical data and firm-level interviews with senior managers at different sites around the country, examined the role of capital, labor, facilities and expertise resources in supporting the flow of commercialization.

While preliminary findings from the commission study were released earlier this year, two new books use the study to examine several decades of U.S. decline in the manufacturing sector and to lay out a blueprint for industry renewal. Production in an Innovation Economy, edited by Richard M. Locke and Rachel Wellhausen, is a multi-disciplinary collaboration featuring authors from political science, economics, business, employment and operations research, aeronautics and astronautics, mechanical engineering, and nuclear engineering examining current challenges to, and the potential of, American manufacturing. Many of the chapters emphasize the importance of co-locating support resources, including workforce training, research partnerships and capital programs, to capitalize on the competitive advantages still held by the U.S. economy to overcome the migration of manufacturing to lower-cost labor markets.

A second book, Making in America: From Innovation to Market by Suzanne Berger, provides more specific policy recommendations to generate a resurgence in domestic production. Berger, who discussed her research at SSTI’s 17th Annual Conference last week, describes the vast changes in industrial structure over the past 25 years that have led to diminished U.S. production capabilities. In the 1980s, American innovation was still led by a relatively small number of large, vertically integrated companies that conducted research in-house and assembled the resources that drove new products to market. Today, these innovations are often developed within universities, public laboratories and startups in the hope that the resulting small companies or licensable technology will be acquired by a large firm that can take the technology to market. This new model has left gaps, in that these smaller sources have much less support to commercialize and less room to fail.

As in the first book, Berger recommends a more sophisticated network of formal linkages between all of the players involved in turning discovery into production. She points to the example of SEMATECH, the private semiconductor industry consortium supported with federal funding, that enables long-term support for basic and applied research along with formal pathways to bring new products to market.

The commission members discussed its findings at an MIT conference last week, during which MIT president Rafael Reif expressed his interest in continuing this research through a new institution-wide initiative on innovation. He added that MIT plans to engage with the federal government on its existing manufacturing initiatives and support future innovation ecosystem improvement efforts.

More information about MIT’s Production in an Innovation Economy project can be found at: http://web.mit.edu/pie/.

Both Making in America: From Innovation to Market by Suzanne Berger and Production in an Innovation Economy edited by Richard M. Locke and Rachel Wellhausen are available for purchase at http://web.mit.edu/pie/america/index.html.

manufacturing, policy recommendations