The Massachusetts Institute of Technology’s (MIT) Production in Innovation Economy (PIE) commission isn’t satisfied with how the United States is commercializing innovation and supporting manufacturing. Although America still has deep reserves of innovation capacity, decades of decline in our manufacturing base have made it difficult for companies to bring new products and technologies to market.
At September conference, the PIE commission summarized its findings, offered recommendations, and asked tough questions that require answers from more than just manufacturers. After collecting data and conducting hundreds of interviews with industry leaders, MIT faculty members explained how the U.S. can turn its strengths in science and research into businesses, products, and jobs.
Support for Smaller Companies
Co-chaired by Suzanne Berger, MIT’s Raphael Dorman-Helen Starbuck Professor of Political Science, the PIE Commission emphasized the importance of supporting small companies in advanced manufacturing. As Berger explains in Making in America: From Innovation to Market, a book based on her PIE research, institutional support for innovation has changed.
During the 1980s, a handful of large, vertically-integrated companies led the way. These industry giants conducted extensive research and development (R&D) in-house and assembled the resources for taking new products to market. Today, Berger explains, more innovation is happening at universities, public laboratories, and startup companies.
For today’s manufacturers then, new strategies are needed. Unless small companies and their licensable technologies are acquired by larger firms, innovation may not reach production. There are alternatives to mergers and acquisitions, however. Public-private partnerships and industry-university collaborations can help promote innovation, and New York State is leading the way.
Partnerships and Collaborations
Through its system of Regional Economic Councils, New York State empowers local leaders from business, government, and education to grown their own economies and support small manufacturers. Since 2011, Albany has awarded the Empire State’s 10 Regional Councils over $1.5 billion, encouraging innovation that commercializes innovative technologies and spurs economic development.
In addition to offering entrepreneurial and business assistance, New York’s Regional Technology Development Centers (RTDC) tap the expertise of U.S. Department of Commerce’s Manufacturing Partnership Program (MEP). To identify the right kinds and combinations of resources, Empire State manufacturers can also make connections through FuzeHub, which supports the work of the RTDCs.
New York State’s public-private partnerships are strengthened by industry-university collaborations. For example, the Center for Global Advanced Manufacturing (CGAM) in Newburgh includes the Hudson Valley Technology Development Center (HVTDC), the Manufacturers Association of Central New York (MACNY), and nine colleges and universities.
The Value of Co-Location
New York State is also proving the value of co-location, a concept promoted in Production in an Innovation Economy (Richard M. Locke and Rachel Wellahusen, eds.), another book based on PIE research. By enabling a Troy-based startup to identify regional manufacturing resources, for example, FuzeHub is helping ThermoAura Inc. take its novel nanomaterials from incubation to production.
Historically, co-location has referred to the sharing of physical locations or facilities. As Finland’s Mikko Ketokivi, author of When Does Co-Location of Manufacturing and R&D Matter?, wrote in 2006, “product design and development decisions should not be made without close coordination with manufacturing.” Despite advances in communications, physical proximity still encourages greater cooperation.
Unlike Ketokivi’s study, however, the PIE commission report also recommends co-locating resources for training, education, and workforce development. In New York State, academic institutions are already working with manufacturers to coordinate curriculum development. Through the START-UP program, businesses that partner with colleges and universities can also earn an exemption from state taxes.
Tough Questions
Which production capabilities are vital for sustaining and exploiting technological innovation? What resources and linkages are needed to bring innovations to market? These two questions from the PIE study aren’t just ones for individual manufacturers to answer. They’re challenges for the public-private partnerships and industry-university collaborations that must strengthen manufacturing.
Despite decades of decline in America’s manufacturing base, the United States still has deep reserves of innovation capacity. MIT’s Production in Innovation Economy (PIE) commission study describes exciting possibilities for U.S. manufacturers and confirms the strengths of New York State’s approach to business growth, job creation, and regional economic development.