July 22, 2010
Munroe: Offshoring Manufacturing Threatens U.S. Leadership in Innovation
In a new column at the San Jose Mercury News, economist and business leader Tapan Munroe writes that the United States is unlikely to maintain its edge in innovation if manufacturing continues to move offshore en masse.
Manufacturing, writes Munroe, is an integral part of the national "innovation ecosystem":
... manufacturing is not just a stage where ideas are transformed into products. It is an essential element of the innovation ecosystem.
There's more to it than that. An abundance of entrepreneurs, access to investment capital and a well-trained workforce also contribute to a successful innovation ecosystem. The presence of manufacturing enhances the level and the quality of innovation and therefore should not be separated from research and development (R&D).
Munroe highlights the work of Breakthrough Senior Fellow Greg Nemet and Peter Kaomoe of the Copenhagen Business School, who have shown that performance improvements in technologies occur not just through R&D but also during scale-up in manufacturing. Kaomoe's work shows that Denmark has helped build a globally competitive wind industry through facilitating a very close interaction between R&D and manufacturing.
Munroe also cites "Rising Tigers, Sleeping Giant," a joint Breakthrough Institute/Information Technology and Innovation Foundation report that documents the United States' declining competitiveness in global clean tech industries:
Another recent Breakthrough Institute report entitled "Rising Tigers, Sleeping Giant," concludes that off-shoring tech production, particularly cleantech manufacturing to China, has resulted in adverse impacts on America's domestic job creation as well as our country's capacity to innovate. This translates into the loss of American competitiveness in one of the most strategic and job-rich industries of the 21st century.
Innovation, as Munroe writes, "does not occur in a vacuum." A robust domestic manufacturing sector is a key component of a successful clean energy competitiveness strategy.