Advanced Manufacturing -

The New American

Innovation Policies 

 

MIT Press - 2018 

(with Peter L. Singer)  

In 2016 the political system experienced significant disruption in part due to an angry voting block suffering from a long decline in American manufacturing, which became particularly acute in the decade of the 2000s. Manufacturing employment fell by one third in this period, 64,000 factories closed, manufacturing capital investment and output suffered, and the productivity rate dropped. The U.S. had been systematically shifting production abroad, and experts began to realize as the next decade began that the decline in its production capability was starting to affect its innovation capacity – which had long been viewed as its core economic strength.

 

The book reviews the origins of the policy response to this dilemma, which came to be called “advanced manufacturing.”  It traces the way the foundational concepts were developed in a series of reports from in and out of government.  It explores how, for the first time, an innovation system response was considered and developed to strengthen the U.S. production system. It examines the key new policy mechanism created by the Administration and supported by Congress, the manufacturing innovation institutes, a complex public-private collaborative model to develop new production technologies and processes, with supporting workforce education. It reviews how the new institutes are working, lessons learned as they have started up and possible enhancements that could expand their policy reach.

 

While this model may create efficiencies and productivity gains to help put existing U.S. manufacturers back in competition with lower cost and lower wage competitors abroad, the book explores a second problem. The U.S. developed in the 1980s and ‘90s a new innovation system based on venture capital for entrepreneurial startup firms for implementing the IT and biotech innovation waves.  That venture system has now largely shifted to support software biotech and services firms, and has abandoned startups planning to manufacture “hard” technologies. In effect, the U.S. is fencing off firms that manufacture from its venture-based innovation system. This is now driving the next generation of manufacturers to production abroad, which will have significant societal consequences longer term. The book reviews new models to tackle this problem, essentially substituting technology and know-how rich spaces for capital.

The book also explores key moments in U.S. production history to explain how it arrived at the current state of affairs, the economics framework for manufacturing policies, new models for workforce education and training, and an evaluation of the future of work, where production jobs will play a key role.

 

These new approaches – an advanced manufacturing program – if implemented, could play a role in reconstituting the manufacturing sector, broaden the startup model, form a stronger production workforce and start to reverse the serious social disruption the manufacturing decline has led to.   

Early Reviews:

“On factory floors across our country, workers are pushing the boundaries of what our manufacturing sector can create. Within these pages, William Bonvillian and Peter Singer tell the past, present, and future story of American manufacturing, an enduring story of resilience, ingenuity, and pride.”
—Congressman Joseph P. Kennedy III (sponsor of the "RAMI" Advanced Manufacturing authorization enacted in 2014)

“American manufacturing suffered a severe setback during the 2008-09 Great Recession, and its decline has continued since then. Bonvillian and Singer trace the causes of the ongoing decline, as well as its destructive consequences on middle income wages. Importantly, their analysis also offers a prescription for recovery. While the complexity of ‘legacy economic sectors’ like manufacturing makes them resist change, this book describes an innovation agenda that could renew the competitiveness of American manufacturing.”
—Susan Hockfield, President Emerita, Massachusetts Institute of Technology

“In this timely book, Bonvillian and Singer tell the vitally important but unknown story of the Obama administration’s advanced manufacturing initiative. In stark contrast to the conventional economic and political wisdom, they delineate a set of policies that would significantly strengthen the U.S. economy. If only Washington would pay attention.”
—Fred Block, Research Professor, University of California, Davis (author of The Vampire State and Other Myths and Fallacies About The U.S. Economy and Postindustrial Possibilities:  A Critique of Economic Discourse)

“Bonvillian and Singer link economic history and theory, in a well-documented analysis of centuries of progress followed by fifty years of U.S. manufacturing decline. They illuminate a path forward. Well worth the read.”
—John A. Elliott, Dean, University of Connecticut School of Business, and Fox Chair in Management

“An extraordinarily complete and important treatment of why U.S. manufacturing declined in the twenty-first century, and the new production paradigms that can transform it into a robust and productive sector again. A fascinating must-read for business and government leaders on how to re-establish manufacturing in the U.S., and the pathways that offers towards improving our economic prosperity.”
—Ira Moskowitz, Director, Advanced Manufacturing Programs, Massachusetts Technology Collaborative, former Vice President and General Manager, U.S. Operations, Analog Devices, Inc.

Chapter-by-Chapter Summary:

·     Chapter 1 paints the context of American manufacturing decline and the social disruption it led to, including the difficulty of bringing innovation into a complex, established “legacy” economic sector like manufacturing.

.    Chapter 2 presents a series of pictures of critical developments in U.S. production innovation history.  It closes with the story of the gap the U.S. allowed to enter its overall innovation system when it failed following WWII to make a sufficient emphasis on manufacturing-led innovation. 

·      Chapter 3 reviews the sharp U.S. manufacturing decline in the decade of the 2000s, examining this from a series of dimensions, including the critical relationship between the production stage and the other parts of its innovation system, a connection the U.S. has largely ignored.  It has been moving from a system of “innovate here/produce here” to “innovate here/produce there.”  Because innovation is linked to production, particularly initial production of a complex new technology, it may be risking “produce there/innovate there,” and corresponding damage to what has been its core capability, innovation.

·      Chapter 4 examines mainstream economics and its problematic attitudes over time toward manufacturing.  It looks at growth theory then trade theory, and notes the connections between New Growth Theory and New Trade Theory over the importance of productivity gains, an area where manufacturing is particularly significant.  However, forces in mainstream economics have still rejected any manufacturing focus, despite these evolving approaches. Given the growing social disruption explored by a rising new group of economists, an economic rationale for an innovation focus for manufacturing is now possible.

·      Chapter 5 looks at how the new policy focus on advanced manufacturing developed following the Great Recession.  It examines a series of critical studies that began an effort to chart this course, evaluating the manufacturing problems identified and corresponding proposals.  It places the reports and early policies in the context of how they emerged.

·      Chapter 6 reviews the centerpiece of the recent advanced manufacturing policies, the advanced manufacturing institutes. The questions of how these are organized, what are their missions, what lessons have been learned as the institutes have been stood up, as well as what enhancements might be considered are all addressed.

·      Chapter 7 looks at a new but related problem: startup scaleup. Startups developing “hard” technology that they plan to manufacture have a growing problem in finding financing for production scaleup.  Yet these startups represent the future of U.S. technology production. The venture capital startup financing system is now heavily focused on software, with support still available for biotechs and various service sectors. Support is minimal for hard technologies that must be manufactured because they entail higher risk and longer development.  New mechanisms around this barrier are reviewed in detail.

·      Chapter 8 takes a deep dive into the manufacturing workforce.  Without highly skilled workers advanced manufacturing will simply not evolve.  New training models, including apprenticeships and new community college roles are examined that could fill this gap.

·      Chapter 9 returns to economics.  There is now a major focus on what economists term “secular stagnation,” a concern about a decline in innovation, growth, the middle class, productivity rates, and related investment.  The chapter examines a role for manufacturing in addressing these issues. It further considers new debates about the future of work and technology displacement – that IT revolution technologies are displacing employment - and manufacturing’s place in job growth.

·      Chapter 10 is the wrap-up, a summary of key findings. It walks systematically through the numerous new ideas in this work. 

Book Talk:

A Book Talk video, as part of the 2018 MIT VANNEVAR BUSH LECTURE SERIES, is available here: 

 https://youtu.be/N1nbKo1caU8

Available from MIT Press - at this site: https://mitpress.mit.edu/books/advanced-manufacturing

Hardcover | $40.00 Short | £32.95 | 416 pp. | 6 x 9 in | 6 figures | January 2018 | ISBN: 9780262037037

eBook | $28.00 Short | January 2018 | ISBN: 9780262343381

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