The whole time we’ve been wringing our hands over the slow death of U.S. manufacturing, lamenting the permanent transition to a service-based economy, we somehow let a little known fact slip past us: U.S. manufacturing is actually driving our economic recovery.
Every manufacturer that is undertaking hires and capital investment in 2011 has followed a consistent, winning formula:
• They have focused on long-term profitability and have not over-leveraged themselves financially
• They have shed excess weight to focus on their core competencies, serving niche markets
• They have harnessed cost through best practices in operations and supply chain management
• They have optimized their workforce through a culture of innovation and continuous improvement
Long before the Great Recession, our U.S. manufacturers have had to learn how to do more with less in order to remain globally competitive. Innovation has not only been a means for growth, but for survival. The major drivers for businesses to innovate are technology, cost and application. An example of technology-driven innovation is the music industry’s evolution from cassette tapes to MP3’s. Costs drove India-based TATA to apply manufacturing process improvements from their commercial vehicle production into the launch of their new economy passenger car line. Schlindler, the global leader of the escalator industry, was driven to innovate by applying their expertise in a different application: moving walks at airports.
Innovation, defined as the process by which an idea or invention is translated into a good or service for which people will pay, takes on many forms:
• Product design: Market-driven design of product
• Organization: Leadership, corporate culture, and management best practices
• Process/system: Management of processes or systems (i.e. highly automated production line or real-time CRM database)
• Technology: Intellectual property
• Applications: Existing technology adapted for different uses
What companies choose to focus their innovation on becomes their strongest competitive edge. Apple innovates through product design, turning out products that are user-friendly, aesthetically pleasing and let’s face it – just plain cool.
Manufacturers can and will innovate on their own. But is there a broader role for the community to support and promote manufacturing innovation? I believe there is.
When manufacturers profit from innovation, they grow, make capital investments and create new jobs. Manufacturing innovation is largely accelerated when manufacturers are located in industry clusters, where they share common supply chain, skilled labor pool and best practices. Manufacturers further benefit from being part of a community that values strong public/private partnerships and close collaboration with local research universities. Higher education institutions not only promote R&D and fast commercialization of new technologies, they also support the pipeline of future workforce critical to the local industry. The best examples of communities with strong innovation can be found all across America, from Georgia to Texas to California.
Southwest Washington manufacturers supply more than 17,000 jobs in the region, representing the fifth largest employment category in Clark County in 2010. We are centrally located on the West Coast between Seattle and San Francisco, close to a major metropolitan city, with easy access to interstate highways, rail, waterways and an international airport. We have three major research universities, including a teaching hospital. We have globally recognized manufacturers in our own backyard, including WaferTech, the largest integrated circuit foundry in North America. It would be an understatement to say that we have an untapped opportunity as a community to foster and promote manufacturing innovation. The question is – what will you do to innovate and support this worthy cause?
Bonnie Moore serves as the director of business services for the Southwest Washington Workforce Development Council and Columbia River Economic Development Council. Contact Bonnie at bmoore@swwdc.org or (360) 567-1055.
