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Let's Move Past Manufacturing. America Should Be The "Innovation Nation"

The United States may never fully recapture its manufacturing power, but it should do more to market its strength in innovation, writes RKS Design's Ravi Sawhney.

Today, many lament that the United States used to make great things but seldom does any longer, believing it’s no longer a major source of manufacturing and creation. One need only open the October issue of Fast Company, titled "The United States of Design" for a reality check. While manufacturing’s decline has been significant over the last two decades, I believe the emerging narrative that manufacturing in the U.S.A. is dying or dead is both misleading and overblown.

In fact, there is recent evidence that manufacturing has been staging a comeback, and others are excited by trends indicating that U.S. manufacturing may be due for a renaissance because of a myriad of issues that make it increasingly price competitive once again—increasing labor/production costs in China, American productivity, distribution, and currency issues, among others. That is good news and a reason for optimism that I feel compelled to share, to dispel many of the misconceptions being driven by the media and our current political environment.

It is true that the U.S. has over time ceded the manufacture of certain types of goods, and perhaps the loss of repetitive production tasks to lower-wage regions is partially inevitable, driven by the global distribution of customers and the desire to minimize distribution costs. However, in doing so we’ve also ceded the recognition and esteem that accompanies America’s continued leadership position when it comes to the development of products and services, and creation more generally. Many have forgotten that the country’s well-educated, culturally diverse, and productive workforce help make the U.S. a leader in innovation, even if it’s now running in a global race.

With the economy becoming more service and information based, what if manufacturing never fully recovers? That’s a real possibility and requires that we devise a strategy that best capitalizes on America’s current role in creating patents, products, services, scientific discoveries, and much more. It is my belief that the country needs a better effort on both the federal and state levels, partnered with commerce officials and corporations, to properly highlight our creative role in the 21st century. This is a basic part of branding that’s gotten lost on a macro level—and it might just support renewed economic confidence by a nervous citizenry.

German engineering means something to people, as does Italian design. The value association is no accident. American design means something, too, but we haven’t done a good enough job helping our citizens and the global community realize just how many innovations are initiated or designed in America. It is my belief that America’s melting pot continues to have the best of all worlds, from a design and innovation perspective, to be a point of leverage for creating business value. So how best can awareness of American innovation be increased on a global scale?

An effort is under way to help America become more innovative in the intellectual property area with the "first inventor to file" system, which will go into effect in March 2013. For those unaware, last month President Obama signed the Leahy-Smith America Invents Act, which will introduce a number of changes to the U.S. patent system and U.S. Patent and Trademark Office procedures beginning next September—as well as to fees, proceedings, reexaminations, and litigation. These changes will provide the much-needed protection that companies seek yet must wait too many years to receive. It’s the U.S. government’s way of taking steps to help innovators capitalize on their potential earlier than ever before, to accelerate the establishment of intellectual property and job creation.

I believe we should also expand the concept of country-of-origin labeling, to better match the age in which we compete. These labels are used not just as a way to differentiate products from competitors, but research has shown that they influence consumer perceptions of value. The effort could also help with domestic demand generation.

"Made in the USA" labeling has stringent guidelines, and while content must be disclosed on most consumer goods (autos, textiles, food, furs, among others), the system is not optimized to meet our needs today. Guidelines are pretty straightforward for labeling requirements in traditional manufacturing and for intellectual property where legislated or through treaties. Some might argue that the regulations are about as clear as mud—see 35 U.S.C. § 287(a) for the marking provisions of the patent statute. However, as we shift to other areas of creation, I believe the FTC system of labeling should be broader and its users better protected. The best approach would include designations such as "Designed in the USA," "Discovered in the USA," "Developed in the USA," or "Produced/Edited in the USA." Product, graphic, web, interaction, fashion, and other design fields would need to be intrinsically involved in the effort, to truly paint an accurate picture of American contribution physically and digitally. I know most would rally around the effort.

In a highly politicized environment, perhaps the most effective way to bring awareness to America’s role in creation would be at the state level. There is already evidence of state identity on products. Look at your iPhone—"Designed in California. Assembled in China"—and on a recent trip, a work colleague confirmed seeing many artisan stamps highlighting "Designed in Hawaii," attempting to portray the state’s connection to products clearly manufactured overseas.

States vary dramatically in terms of their investment in and outputs from innovation, with California in a recent report being cited as the most innovative state in the nation. Other states would be well served by more local efforts. In fact, my home state of California has nearly 3.5 times the number of patents issued than in New York (#2) and Texas (#4), higher broadband deployment, and double the money spent in medical and scientific research grants. I wish companies took this reality into account when considering where they want to do business and create jobs. And there is more that California and other states could be doing to raise awareness.

Many in the public don’t yet comprehend how the design and development professions can help address cost mitigation and guide demand generation while offering disruptive innovations and incremental improvements. The profession is a powerful lever—currently underutilized—for economic growth and job creation. The profession could also be instrumental in such the large and important branding effort that I’ve proposed, which would help the U.S. regain the optimism and consumer confidence needed to reestablish our growth momentum.

[Top image by Poppy Thomas-Hill]

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  • So Cal Surf Runner

    The real issue is Wall Street. Wall Street demands quarterly growth. Without it, C-level execs miss out on huge sums of money. C-level execs have no financial incentive to bring manufacturing back to the USA when they can produce products infinitely cheaper in developing nations. Look at how much manufacturing has moved to Vietnam because Japan, then Taiwan and then China became "too expensive".

    Until investors and corporate boards can come together and agree that long-term sustained growth is the goal then the question of to make or not to make in the USA will persist. I don't see that happening... ever. It's said that a bank robber was once asked why he robbed banks and his reply was, "That's where the money is." For now, overseas manufacturing is where the money is because corporations can squeeze more profits out of it.

    We need to change the way corporations think about their missions and responsibilities. The Zen master would tell you that to do this we need to change the way consumers think about their missions and responsibilities. Look at what consumer outrage was able to achieve is a short amount of time with B of A's debit card fee or Netflix's split service.  It's said that if you don't vote then you get the government you deserve. If we, as consumers, don't become active participants in how the companies we support are run then we get the corporations we deserve. 

  • Toqueville

    This article really resonates.  I wish it could somehow be included in a schedule of discussions, (national dialog we've been expecting from Obama administration), developed for Americans currently grappling with appropriate ways to petition our government and move forward.

  • CraftekDesign

    A model for American manufacturing is that its light on its feet, and willing to adapt and not be politically burdened.   At a minimum ideal, a company's biggest client would represent no more than 10% of its business.

  • CraftekDesign

    was it Ben Franklin that said "they can take everything away from you, but they cant take away whats in your head.  So invest in yourself"

  • Jasondgraham

    Yes, Ron_cnxt, I agree with you. There's a lot of technology that is just held back for the sake of greed. Familiar with the EV1 in the documentary "Who Killed the Electric Car?" I think it's obvious who killed it and why, and I believe this behavior is exactly why these car companies had to be bailed out. I think that mindset is exemplary of why the country has fallen behind. Imagine what the technology could be like now if they had not greedily crushed the EV1 in 1996. We had perfectly usable electric cars about 15 years ago. It IS sad how these cats hold back technology even at the cost of the only planet we have to hang out on. I mean c'mon-this is where I keep my stuff so let's no jack it up if we can keep from it. 

  • Diana Mitchell

    As a consumer I don't care if an item was "Designed in the USA" if it was manufactured somewhere else. As a designer I think US citizens have an obligation to try to have things manufactured here if possible. US manufacturing will recover to the extent that people are willing to support it by buying locally manufactured items.

  • Ron_cnxt

    When you use "America" as a generality it dissuades people like me who know that Corporate America has tax advantages for going offshore. American's would never have moved its manufacturing offshore had not Corporations and Lawmakers foisted these untenable circumstances upon the "American's". I believe you shouldn't dance around who and they why as this is all scripted. Tomorrow we could implement tariff's and removed most favored nation trading status to those who refuse our goods and force enormous and egregious  trade imbalances.  The reason why it has continued is because "America" has been targeted to slow down its manufacturing so as to become "Equal" with its other nation states. This Equality is supposed to make it easier to implement a global Cabal  or take over by the world Elite. When you look at the criminal actions done by every government in the world, it appears that the criminal element has seized control and removed the rule of law and replaced it with fascism. It is this fascism and greed which dictates what corporations do. Look at what they did in Iraq and if Iran continues to rattle is saber maybe even Iran too. 

    I just read that Gaddafi allowed MI-6 and the CIA special camps there where they would torture prisoners. The papers for these crimes where found in Gaddafi's spy-master office, one of the last strongholds to fall. When the British and American Government said "We don't Torture Prisoners", they should have added "We don't torture prisoners in your sight". This axiom holes true for the dismantling of American Manufacturing in America. "Corporations "We don't show you that we have done to reduce America to a third world nation". At least they don't do it in our sight ? Yes they have. They have done it in our sight and they have made it clear that they plan to homogenize the worlds population. 

    I suppose if I told you that I could send energy wirelessly without any losses you would say I was a liar. Then why do we have wires, should be your response ? Yes, why do we have wires when Nikola Tesla's wireless energy transmitter was patented in 1941 6 months after his death ? They awarded Tesla the patented after he died so Tesla would not pursue the wireless transmission of energy. It would have changed everything. First and foremost it would have made Einstein's Special Relativity look foolish because Einstein said that "NOTHING" can travel faster than the speed of light. This was disproven in 1880 by Dr Wheatstone who discovered that electrostatic forces travel at 1.6 x the speed of light. Telsa's wireless transmitter also sent energy at 1.6 times light speed. Recently, CERN published that Neutrino's were traveling above the speed of light but more than that they would not comment. Physics should be rewritten. Forces without mass do travel faster than light. In fact Einstein was correct when he said that things that travel faster than light would start moving backwards in time. All physical properties would be reversed or just the opposite than what they are.

    Several researchers have independently come up with "Apparent Negative Resistance". In 1932 a Hungarian Electronics Engineer who worked for General Electric wrote a paper entitled "Geometric Networks in Electrodynamic Systems". In this paper Gabriel Kron theorized that he could develop negative resistance in an electrical circuit. The US Navy put up $30,000.00 to see if this could be done or if it were pie in the sky. The GE prototype was delivered to the US Navy and it may be the first "BLACK PROJECT". As FOIA's come up with nothing, not even a response from the department of the Navy. 

    These technologies have been suppressed to keep us using oil and gas. These technologies would could free mankind from paying for energy are suppressed and everyone associated with them are called Kooks. Rightly so we can't have free energy, can we ? If it isn't give to us by the Corporate Fascists and sanctioned by them we can't have it ? What I am saying is that we have become nothing more than chattel never questioning the dominant paradigm. Apathetic and demoralized we scrape for scraps from the corporate tables. 

    I could go on an on but the point here is that "American's" want to manufacture there own products because when we do, we make the best products that money can buy. Corporations on the other hand are motivated by profits. They don't care if the product is the best. They only care about how much money they can make. It wasn't until  Steve Job's said to Foxconn the largest Contract Manufacture in the world that they would no longer do business with them if they kept indentured servants who lived in barracks like buildings under the poorest working conditions. But even Steve Job's was a globalist pig.. with a conscience... Yet he still pushed all of his manufacturing offshore. 

    Bottom line.. don't use generalities like "America". Don't be afraid to tell it like it is... ! 

  • Jasondgraham

    You are right on target. I believe local innovation can lead to making global impact. The creative realm at least in a lot of areas is so underutilized and absolutely not appreciated in all but a select few companies. I would say it's even considered the black sheep in some circles. Steve Jobs made reference to the people he worked with as creative people not business people. That's one company very focused on innovation and design, not so much price. What if more companies hired creatives to analyze and evaluate their businesses? 

    I do think we need to bring production back to the USA, and that will take some significant buy in, effort, and strategy on the part of the politicians, companies, and the consumers. Don't get me started on the ill affects of the politicians, but despite that successful manufacturing is happening in small pockets around the country. We just need to encourage it and push it forward. I'm not sure why the government doesn't consider investing money into THIS country like a business would and should do. Why not develop a campaign to promote the USA as well as "insert successful company name here" is promoted. I rarely see anything that suggests I buy things made in the USA. We pulled together as a country in WWII and GM, Saginaw, IBM and others made rifles because that's what was needed to save our great nation. I think that loyalty has deteriorated, and with the world being very global minded we've gotten a little out of touch with our roots. I think it's unfortunate, and I think the people in power represent the wealthy and not the people, our country or the values that made this nation the leader that it once was in the past.

    We need to bring back the idea of craftsmanship and not disposable junk. If we want to be green or eco-friendly let's build things that last and charge a premium for them and export to other countries instead of adding to our landfills. Companies have been so focused on making money that it has now come around to bite them in the....well you know. It's like bailing water out of the boat and not seeing the 40-foot falls coming up. Sometimes it's extremely vital to have people that see the big picture. 

  • Mlizarra

    Max Lizarraga- Point in fact. We are running out of third world countries to have our products manufactured. Those countries are developing their infrastructure which means that they will demand higher wages as their economy improves.  It will again become economically feasible to manufacture in the United States.

  • jake22

    I agree with RobinP below.  

    Economy is a big topic of debate in our country right now and manufacturing in America is an integral part of rehabilitating our economy.  Lets look at it this way.  If you pay $100 for an iphone then a portion of that price is going overseas to pay the manufacturer in China.  This means that money is leaving our economy, regardless of how big or small, to support another.  If, for instance, iphones were manufactured in America, then that would be creating  jobs and incomes for Americans.  Those workers and companies will eventually recirculate that money back into the economy through their various trends of purchases.  For the life of me, I can't understand why people don't  see that our economy would be rejuvenated with the resurgence of manufacturing in this country.  Granted, it probably wouldn't fix all problems, and I know I don't understand all the small nuances of our economy but it certainly wouldn't make things any worse.  I know that for a fact.  But yet our country has placed to many rules and regulation on manufacturing that it makes it extremely difficult and pricey.  Thanks America 

    And yes, not everyone is destined to be a designer or innovator.  We need people to work in all facets of society.  However, majority of people are actually very innovative in the jobs they work at, whether it be a certain way of going about doing something that was easier than before or making something themselves to help them perform a task.  The only thing is that they aren't able to cash in on their ideas like those who have the financial or professional means to do so. 

  • Reality Check

    This is a classic example of a person within an elevated position in society thinking that everyone resides in their bubble. I would like to introduce Ravi to the bell curve and point out that not everyone is equipped to be innovators and that we, as a society, need to take care of each other, creating opportunity at every level of skill and ability. Wealthy and well connected individuals love this kind of talk and feed off of it because they have lost perspective and really don't know what life might be like without their advantages. It is like saying, let's all me investment bankers. There really is no need for any other profession and then we can all be wealthy, it really is a wonderful delusion.

  • RobinP

    I agree with many on this issue; you can't alienate the production part in favor of just services or idea development.
    Witness Germany and Japan, two very innovative nations, yet they keep a prominent productive base (industrial, agricultural, etc), in those countries you see factories everywhere — of all sizes.

    You can't simply ignore the vast poplulation who, like said before, is just happy with doing a manual work; plus I disagree that we in the US have a highly qualified workforce; many people do not finish high school and are not even interested in going to college.

    USA needs production, whatever the industry be, without

  • remix

    Maybe we should see our world as it truly is now - interconnected in the
    age of information and not fall back to nation states of the industrial
    age. I am not sure there is room any more for "made/designed/thought
    up in America/China/Japan". Ideas and designs are never
    created solo - even less so in today - in fact the best ones are usually results of many ideas
    stolen/copied and remixed.  I think to be truethful products today have to say "made possible by many socities, ideas and people" - anything less is a lie.

  • Ben Thoma

    I have a big problem with this idea. I come from a family where my father & sister work in manufacturing. They do so, because that's what they are best suited to do. The idea that everyone is born into a situation where they can go to college and achieve at a high academic level and then go out and innovate is missing the biggest problem:

    NOT EVERYONE IS BORN TO INNOVATE. Some people just want to do manual tasks and get complete satisfaction from it.

    So, am I supposed to ship my father and sister to India or China because they can work there? Or can we provide opportunities for people of ALL skill sets. Made in the USA could still mean something. Designed in the USA can mean something. Let's not be naive enough to think that we can only focus on one or the other.