01 Mar 2011
Where the Jobs Are
Can U.S. Manufacturing Stage a Rebound?by Roger ThompsonTopics:
With U.S. economic recovery limping along and unemployment hovering above 9 percent, the Washington debate over regulatory and tax policies needed to spur economic revival has shifted into high gear. Outside the Washington Beltway, among business leaders and academics alike, there’s already broad agreement on a key goal: Technology-based manufacturing has to be a catalyst for job creation and competitive renewal. But is that a realistic expectation?
Seeking an answer, we explore the current and future state of American manufacturing competitiveness in three articles, kicking off our new approach to taking a more in-depth look at a single topic through the experiences of alumni and the insights of faculty experts.
HBS alumni interviewed for this issue lead companies ranging in size from a global powerhouse to just twenty employees. Whatever the size or focus of their firm, they all say that the future is now for American manufacturing innovation.
In a wide-ranging Q&A with Associate Editor Julia Hanna, Boeing CEO Jim McNerney (MBA ’75) says that innovation is the country’s “most sustainable competitive advantage.” And he views Boeing’s success in India, China, and other rapidly developing nations as an engine for job creation back home (see article).
Innovation is also the ticket to survival for smaller manufacturers, reports Senior Associate Editor Garry Emmons, who talked with the proprietors of family-owned metal-stamping and lighting companies. Chirch Global Manufacturing uses state-of-the-art machines to fabricate component parts for a worldwide customer base. For the Kirlin Company, technologically advanced lighting designed and manufactured in the United States keeps the firm going strong. Switching gears, Emmons highlights the key role that CSX plays in facilitating commerce and learns that the country is in the midst of a “rail renaissance” that will boost competitiveness in global markets (see article).
While individual company successes abound, not all the news is good on the competitiveness front. HBS professors Gary Pisano and Willy Shih worry that U.S. high-tech firms have relied too much on outsourcing manufacturing in the mistaken belief that what really counts is R&D, not the actual fabrication of products. In fact, they argue, innovation and manufacturing go hand in hand. Now is the time, they continue, to address this problem before it’s too late to reverse course (see article).
Despite their dire warnings, Pisano and Shih haven’t given up on a second act for American manufacturing. And for good reason. The can-do mentality that has pulled the nation through tough times in the past is alive and well among the manufacturing firms profiled in this issue.
— Roger Thompson
Class of MBA 1975, Section B