Strengthening American Manufacturing The Role of the Manufacturing Extension Partnership: Summary of a Symposium (2013) / Chapter Skim
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Panel III: Small and Medium-Sized Enterprises and High-Value Manufacturing
Panel III: Small and Medium-Sized Enterprises and High-Value Manufacturing
Pages 75-98
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From page 75... ...
"I think that message is often lost," he said, "and I think it's imperative for supporters of advanced manufacturing innovation to get that message out." The fact that innovation creates higher-paying and more productive jobs, he said, has important implications for federal funding policy. A related point, made by an earlier speaker, is that innovation suffers when manufacturing moves offshore and removes the "side result of continuous learning." He introduced the next speaker, Dr.
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From page 76... ...
economy, no such agreement exists in explaining why this may be true. He said also that many economists saw no special importance in what products are manufactured; he repeated the quip that it does not matter whether we're manufacturing potato chips or semiconductor chips, "as long as we're manufacturing something." Still other economists, he said, argue against producing a product in the United States if the relative prices of the world economy favor production offshore.
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From page 77... ...
Tassey said, the fast-growing high-tech services sector must have close ties to its manufacturing base to fuel innovation. "There are definite co-location synergies between services and the sources of their technology," he said.
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From page 78... ...
SOURCE: Gregory Tassey, Presentation at November 14, 2011, National Academies Symposium on "Strengthening American Manufacturing: The Role of the Manufacturing Extension Partnership." R&D-intensive Industries Innovation is just the first stage of commercialization, he said; economists are interested in all of its stages and the total economic impact that generates jobs, salaries, profits, and other benefits. To frame this larger picture he compared the degree of R&D intensity in manufacturing industries with real economic output for the period 1999-2007.
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From page 79... ...
The process usually begins as the country specializes in a particular tier of the high-tech supply chain. As they become successful, they begin to integrate backward along those supply chains, taking more value added from the Western economies, including the United States.
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From page 80... ...
all manufactured products, 1988-2010. SOURCE: Gregory Tassey, Presentation at November 14, 2011, National Academies Symposium on "Strengthening American Manufacturing: The Role of the Manufacturing Extension Partnership."
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From page 81... ...
SOURCE: Gregory Tassey, Presentation at November 14, 2011, National Academies Symposium on "Strengthening American Manufacturing: The Role of the Manufacturing Extension Partnership."
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From page 82... ...
has one of the highest nominal corporate tax rates in the world, effective tax rates are often much lower. In this regard, a recent GAO report notes that using allowed deductions and legal loopholes, large corporations enjoyed a 12.6 percent tax rate far below the 35 percent tax that is the statutory rate imposed by the federal government on corporate profits.
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From page 83... ...
. He showed another chart comparing the manufacturing value added from R&D intensive industries.
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From page 84... ...
Instead, they limit the source of economic growth to the "black box" of proprietary technology -- such as patents -- that become the raw material whereby companies, venture capitalists, entrepreneurs, and other actors commercialize a technology and add value to it. Because the proprietary technology in the black box belongs to the private sector, and the value added represents the payments to labor and the payments to corporations as profit, the model affords few leverage points for public policy.
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From page 85... ...
As an example, he showed how this technology-element model would be applied in biotechnology. He showed lists of activities in each of five categories, only the first and last of which -- science base and commercial products -- were present in the original black box model.
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From page 86... ...
Tassey said, was a shift in the composition of R&D toward shorter-term activities. The real growth has been in industry's net investment in next-generation technologies that provide the short-term products for the domestic supply chain.
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From page 87... ...
But only over the longer term will you get beyond benefits to participants to benefits for the national economy as a whole." THE DVIRC PERSPECTIVE ON THE SUPPLY CHAIN Joseph J Houldin Delaware Valley Industrial Resource Center Joseph Houldin began by clarifying that he represented the Delaware Valley Industrial Resource Center (DVIRC)
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From page 88... ...
These improvements represent not just an exchange of dollars, but a value added to that company. Among them may be new software or IT systems, on-time delivery methods, lead-time reductions, improved design or engineering, and value added elements that are shifted down the chain or distributed through the
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From page 89... ...
In the Philadelphia/ South Jersey area, few large supply chains are driven by a single company, and fewer are driven by a single industry. About 15 years ago, a third of the firms there were small OEMs, and 2/3 were considered job shops.
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From page 90... ...
Another million or so people are employed in supply chains in agricultural equipment, aerospace, and other industries.
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From page 91... ...
Within the narrow industry of automotive stampers, she calculated the value added per employee. After subtracting purchase inputs, this is money that is used to pay the workforce, invest in new capital, and deliver profits to the owners.
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From page 92... ...
Firms where employees attended quality circle meetings, for example, grew 6.4 percent in sales between 2007 and 2010, while firms where employees did not attend quality circle meetings lost 26.9 percent in sales. Firms that performed preventive maintenance grew 17.1 percent in sales over the same period, while firms that did not perform preventive maintenance lost 10.4 percent in sales.
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From page 93... ...
Large companies rely for skills instead on SMEs and shared supply chains. With each supplier selling to several automakers, automakers are tempted to "free-ride" on their rivals' investments in training for suppliers.
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From page 94... ...
Griffith, who is the CEO of the Timken Company, a century-old global manufacturing firm, said that the company had undergone a "radical transformation" over the past decade. At the turn of the century, it was an automotive supplier of bearings and other specialty steel products struggling to adapt to hard economic times.
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From page 95... ...
, and corporations. The corporations wanted not so much to build their own supply chains as to strengthen the entire regional economy that included their headquarter cities and home terrain.
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From page 96... ...
Griffiths and his colleagues had examined the curricula of the 17 universities in the region and could not find the word manufacturing in any of them -- "even though we were the largest piece of the economy." The group set out to change that by encouraging educational institutions to build curricula that serve manufacturers, raise the level of workforce expertise, and promote career opportunities in manufacturing. Moving from Lean-only to Innovation and Export Strategies Finally, MAGNET sought to bring leading management skills together to promote not only lean practices -- the early focus of MEP -- but also innovation and export strategies.
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From page 97... ...
Advantages of Kaizen She added that she did have evidence about the link between kaizen -- continuous improvement -- and innovation. It is only a correlation, she said, but it does suggest that companies with quality circles and preventive maintenance are more likely to do R&D, to design a greater percentage of their products, and to generate a greater percentage of innovative products.
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From page 98... ...
They also received trade adjustments to stop dumping, along with signals from the government that they wouldn't be allowed to go out of business. Those CEOs that designed SEMATECH eventually adjusted their model to go ahead without the government funding.
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