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Published: January 20, 2014
 / Spring 2014 / Issue 74

 
 

America’s Real Manufacturing Advantage

One important effect of the current debate has been to further build public support for manufacturing. A growing body of intellectual capital—including research conducted by organizations like the Brookings Institution, the Business Roundtable, the Manufacturers Alliance for Productivity and Innovation, and the National Association of Manufacturers, as well as articles and books by an array of thought leaders—is helping bring about a change in the American psyche.

Nevertheless, manufacturing still has a branding problem. Lacking knowledge of what the future of advanced manufacturing looks like, too many students, parents, educators, and policymakers reflexively associate manufacturing with archaic factory settings and low pay. This suggests a need for further education about the opportunities for high-paying, high-tech jobs in the manufacturing facilities of today and tomorrow.

The coming era of advanced, virtual-to-real manufacturing will reorder the global business landscape for decades. The key success factors for companies, nations, and regions will be innovation, software, and education. Manufacturers should be examining their operations, looking for opportunities where software and advanced technology can lead to step-change improvements. Manufacturers that capitalize on these changes across their entire development and production process will set the tone that others will be forced to follow to remain competitive. The U.S., given its historical strength in innovation, its strong position as the world leader in software development, and its robust education infrastructure, is well positioned to lead in this cycle. To seize the opportunity, the business and policy communities will need to work together to build on these strengths. If they do, the conditions will be in place for a new approach to manufacturing, ensuring that the investment and expansion we have seen over the last several years can continue and grow, and eventually lead to an age of enlightenment in which advanced manufacturing becomes a central pillar in building a U.S. economy—and a stronger middle class—for the 21st century.

Reprint No. 00240

Author Profiles:

  • Helmuth Ludwig is chief executive officer of Siemens Industry USA. He is also an adjunct professor at the Cox School of Business at Southern Methodist University and a member of the board of the Manufacturers Alliance for Productivity and Innovation.
  • Eric Spiegel is president and chief executive officer of Siemens Corporation. He was formerly a senior partner at Booz & Company, and is the coauthor (with Neil McArthur) of Energy Shift: Game-Changing Options for Fueling the Future (McGraw-Hill, 2009). He is vice chair of the Education and Workforce Committee at the Business Roundtable and a member of the board of the U.S. Chamber of Commerce.

 

 
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Resources

  1. Robert D. Atkinson and Stephen J. Ezell, Innovation Economics: The Race for Global Advantage (Yale University Press, 2012): Why the U.S. needs a coherent innovation policy to remain competitive, from two officers of the Information Technology and Innovation Forum.
  2. Peter Cappelli, Why Good People Can’t Get Jobs: The Skills Gap and What Companies Can Do About It (Wharton Digital Press, 2012): The director of Wharton’s Center for Human Resources makes a case for changing the way talent is developed, recruited, and retained.
  3. Kaj Grichnik and Conrad Winkler, Make or Break: How Manufacturers Can Leap from Decline to Revitalization (McGraw-Hill, 2008): Former Booz & Company consultants show how top companies are reinventing themselves to compete in a new world.
  4. Andrew N. Liveris, Make It in America: The Case for Re-inventing the Economy (Wiley, 2011): The chairman and CEO of Dow Chemical makes the case for manufacturing in the United States.
  5. Gary P. Pisano and Willy C. Shih, Producing Prosperity: Why America Needs a Manufacturing Renaissance (Harvard Business Press, 2012): Two professors at Harvard Business School show why manufacturing really matters in an innovation-driven economy.
  6. Harold L. Sirkin, Justin Rose, and Michael Zinser, The US Manufacturing Renaissance: How Shifting Global Economics Are Creating an American Comeback (Knowledge@Wharton, 2012): Analysis and recommendations for U.S. manufacturing from the Boston Consulting Group.
  7. Vaclav Smil, Made in the USA: The Rise and Retreat of American Manufacturing (MIT Press, 2013): An authoritative history of U.S. manufacturing by a noted business historian and author.
  8. Gene Sperling, “The Case for a Manufacturing Renaissance,” speech delivered at the Brookings Institution, July 2013: The director of the National Economic Council discusses U.S. competitiveness in advanced manufacturing.
  9. For more thought leadership on this topic, see the s+b website at: strategy-business.com/operations_and_manufacturing.