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Producing Prosperity: Why America Needs a Manufacturing Renaissance

Overview


Manufacturing?s central role in global innovation

Companies compete on the decisions they make. For years?even decades?in response to intensifying global competition, companies decided to outsource their manufacturing operations in order to reduce costs. But we are now seeing the alarming long-term effect of those choices: in many cases, once manufacturing capabilities go away, so does much of the ability to innovate and compete. ...

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Producing Prosperity: Why America Needs a Manufacturing Renaissance

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Overview


Manufacturing’s central role in global innovation

Companies compete on the decisions they make. For years—even decades—in response to intensifying global competition, companies decided to outsource their manufacturing operations in order to reduce costs. But we are now seeing the alarming long-term effect of those choices: in many cases, once manufacturing capabilities go away, so does much of the ability to innovate and compete. Manufacturing, it turns out, really matters in an innovation-driven economy.

In Producing Prosperity, Harvard Business School professors Gary Pisano and Willy Shih show the disastrous consequences of years of poor sourcing decisions and underinvestment in manufacturing capabilities. They reveal how today’s undervalued manufacturing operations often hold the seeds of tomorrow’s innovative new products, arguing that companies must reinvest in new product and process development in the US industrial sector. Only by reviving this “industrial commons” can the world’s largest economy build the expertise and manufacturing muscle to regain competitive advantage. America needs a manufacturing renaissance—for restoring itself, and for the global economy as a whole.

This will require major changes. Pisano and Shih show how company-level choices are key to the sustained success of industries and economies, and they provide business leaders with a framework for understanding the links between manufacturing and innovation that will enable them to make better outsourcing decisions. They also detail how government must change its support of basic and applied scientific research, and promote collaboration between business and academia.

For executives, policymakers, academics, and innovators alike, Producing Prosperity provides the clearest and most compelling account yet of how the American economy lost its competitive edge—and how to get it back.

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Editorial Reviews

From the Publisher

“In their book Producing Prosperity: Why America Needs a Manufacturing Renaissance, Harvard Business School professors Gary Pisano and Willy Shih cut through the confusion. In just 138 pages—a perfect read for the Washington to New York Acela—they offer the most compelling case I have read for why making things matters, even if it will produce very few manufacturing jobs in the future.” — Council on Foreign Relations

“The prescriptions they offer are not only timely…but they are also realistic goals that are within our grasp.” — Trend & Manufacturing Alert

ADVANCE PRAISE for Producing Prosperity:

Lawrence H. Summers, President Emeritus and Charles W. Eliot Professor, Harvard University; former Secretary of the Treasury of the United States—
“America will still face critical economic challenges long after the financial crisis. Pisano and Shih make the best argument yet that a renewed focus on manufacturing is crucial for our economic future. Their work should be closely considered by anyone concerned with the future of the American economy.”

Wendell Weeks, Chairman and CEO, Corning Incorporated—
“Pisano and Shih understand the critical link between manufacturing and innovation. They make a powerful case for why a renewed focus on manufacturing is vital to restoring America’s global competitiveness.”

Charles Vest, President, National Academy of Engineering; President Emeritus, Massachusetts Institute of Technology—
“In this data-driven book, Pisano and Shih argue persuasively that to launch an American manufacturing renaissance, we must strengthen the human capital, policy, and basic infrastructure that are our ‘industrial commons.’ Their message must be heeded—retaining the ability to innovate is far more important than retaining specific industries.”

Regina Dugan, Senior Vice President, Advanced Technology & Projects, Motorola Mobility; former Director, DARPA—
“The authors declare, ‘When a country loses the ability/capacity to manufacture, it loses the ability to innovate.’ I couldn’t agree more. We do need a renaissance in manufacturing. Now.”

Ralph Gomory, Research Professor, Stern School of Business, New York University; National Medal of Science recipient—
“Pisano and Shih’s concepts of the ‘industrial commons,’ and of competing through capabilities, are essential for understanding what is actually happening to American manufacturing and what is needed to restore it.”

Sergio Marchionne, CEO, Fiat; Chairman and CEO, Chrysler Group LLC—
“This timely book is a wake-up call for American policy makers and business leaders. It urges us all to look hard into the rearview mirror.”

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Product Details

  • ISBN-13: 9781422162682
  • Publisher: Harvard Business Review Press
  • Publication date: 10/16/2012
  • Pages: 192
  • Product dimensions: 6.10 (w) x 9.40 (h) x 0.80 (d)

Meet the Author


Gary P. Pisano is the Harry E. Figgie, Jr. Professor of Business Administration at Harvard Business School, where he has been on the faculty since 1988. His research has focused on the management of innovation, technology and competitive strategy, and outsourcing. Willy C. Shih is a professor of management practice in the Technology and Operations Management unit at Harvard Business School. His research focuses on capability acquisition in Asian firms and the linkage to US competitiveness issues. Prior to coming to HBS, he spent eighteen years in information technology, followed by ten years in the consumer electronics industry.
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Table of Contents

Prologue: Does America Need Manufacturing? ix

1 Introduction 1

A Look in the Mirror, and a Look Ahead

2 What Is Competitiveness? 21

3 The Industrial Commons 45

What It Is and Why It Matters

4 When Is Manufacturing Critical to Innovation? 61

5 The Rise and Decline of the American Industrial Commons 73

6 Rebuilding the Commons 101

The Visible Hand of Management

7 Toward a National Economic Strategy for Manufacturing 119

Epilogue 135

We Can't Turn Back the Clock

Acknowledgments 139

Appendix: Key Component Suppliers for Photovoltaic Unit (India) 141

Notes 145

Index 155

About the Authors 165

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