USA Today features a Boston Consulting Group report on America’s waning lead in industrial innovation. We’re still investing in and churning out more basic and applied research than any other nation, and we are home to a huge proportion of the world’s best universities (BCG says 75 out of the top 200; Times Higher Education says 63 out of the top 200, 147 out of the top 800*), but other nations—especially China, but also Germany, Japan, and South Korea—are focusing more on turning our technological innovations in money-making products.
Among the causes of “friction” in U.S. industry efforts to turn science into profits are a couple of free-market failings:
- Reluctance to Collaborate. Because they view one another as competitors within an industry—rather than collaborators working to further a national interest—companies are often reluctant to cooperate to solve common manufacturing problems. When US manufacturers join research consortia, they often prefer to work in their own facilities and share little of their innovation with other members.
- Uncoordinated Supply Chains. Instead of offering full suites of advanced digital manufacturing tools that are applicable to entire industries, providers tend to have narrow capabilities and develop solutions that are specifically designed for certain technologies or manufacturers. Manufacturers are also reluctant to collaborate with their suppliers on process innovation. As a result, it’s hard for US industries to establish standards that would reduce costs, speed the implementation of new manufacturing technologies, and improve efficiency throughout the manufacturing ecosystem [Hal Sirkin, Justin Rose, and Rahul Choraria, “An Innovation-Led Boost for U.S. Manufacturing,” Boston Consulting Group, 2017.04.17].
But, in a nod toward Speaker Mickelson and the business-über-alles mindset, we also need to kick our socialist education system around a bit:
- Skill Gaps. Wide-scale adoption of advanced manufacturing technologies will significantly increase demand for skills that currently are in short supply in the US, such as robotics coordinators, information technology specialists, and data analytics personnel. The US public education system is also not well suited to training production workers who are able to quickly adapt to new and evolving manufacturing technologies [Sirkin et al., 2017.04.17].
All that assumes that we want science and education to serve industry. I don’t mind if our university scientists concentrate on uncovering the mysteries of the universe and leave it to someone else to figure out how to make a buck off the Big Bang. I don’t mind of our public schools focus on making children into well-read participants in democracy and let them figure out how to make better widgets.
But if we want to stay ahead of China in industrial innovation, we need to keep investing in science. We need our great industries to adopt a more collaborative scientific spirit. And we do need to look for ways to give kids more chances to design and build things alongside (not in place of) their training in American democracy.
*On the Times Higher Education World University Rankings for 2015–2016, along with 63 American universities, the United Kingdom places 34 in the top 200; Germany, twenty; Netherlands, eleven; Australia, eight; Switzerland and Canada, seven; Sweden, six; France, five; Belgium and South Korea, four; Hong Kong, Denmark, Italy, Spain, three; Singapore, China, Japan, Ireland, Norway, two; Finland, South Africa, Austria, Russia, Taiwan, New Zealand, Israel, Luxembourg, one.
When I grew up on a farm, all farmers collaborated because if our neighbor got better we did not lose market share. No one individual can have all the best ideas so we shared.
When I worked at HTI in Sioux Falls as an inspector, we had about two thousand employees on a product that we were world leaders and had seventy five percent of the world market. We needed to keep our competitive advantage or lose jobs overseas. So we absolutely did not give company secrets. People from the old Morrell union families totally understood this and would remind us farm kids of the importance of staying competitive if we ever thought of talking shop in a restaurant or anywhere outside of the plant. To keep company secrets we made our own machines and testing equipment. This is possible with a tool room that can make anything.
New farm inventions were made at home or the local machine shop as well. John Deere did not start making four wheel drive tractors until one of their vice presidents went to Steiger brothers farm and saw their four wheel drive that they made in their own shop at home.
One of the reasons Japanese manufacturing passed us up some years ago is because they use the brain of each and every employee. Our country is starting to do that as well. At HTI we could get an award for a good idea, and resulted in we lead the industry.
One company does not have to tell the competition what they are doing. The market will show what you can build and the competition can try to copy it. Patents are still a possibility.
But as long as we have NAFTA, we are discouraging our own manufacturing. Blaming their problems on themselves is just an easy excuse.
Interesting, Roger. You get me thinking: other countries have less to lose by having their companies share, because the bulk of the innovation is coming from the U.S. They don’t have as many ideas to swipe from each other, so they perhaps lose less by cooperating and gain more by quickly disseminating the newest tech from the U.S.
So what if China does catch up with us in basic and applied science, in generating innovative ideas? Will Chinese companies find it more beneficial to keep new ideas to themselves, or will the government keep coordinating industries to share ideas and float all boats within the Chinese economy?