Innovation is the future of American manufacturing. In my travels over the past three years producing videos for the manufacturing industry, I’ve found the most successful firms are those that used the latest technology to make better products and materials faster, less expensively, and better. They did it mostly, and sadly, as a reaction to the massive outsourcing of their work to other, cheaper countries.
This technological makeover, including CADCAM software, advanced multi-axis CNC machines, and retraining the best employees, often resulted in layoffs, budget cuts, and even cuts in the cost of products themselves. But the strategy has worked as the successful firms I visited said that getting back business they’d lost to China and other cheapo countries was a key to their resurgent success.
But these are mostly small companies: fewer than 500 according the Small Business Administration’s definition of a small manufacturing company. Why aren’t larger, more mature firms innovating and succeeding the same way? The most recent information shows small businesses produce more highly cited patents meaning their innovations are considered more significant than larger companies’. Small businesses’ innovations are also more linked with scientific research than large companies’, making them more important because they are considered more leading-edge.
Chinese companies make lots of stuff but they don’t even bother innovating because, for the past few decades, the innovators were all in America or other countries who gave away their breakthroughs to the cheapo workforces and economies. It took a while but we’ve discovered that the stuff China makes is inferior in quality, customer service is comparatively non-existent, and where saving time and money used to be primary incentives, America’s manufacturing overhaul has proved we not only make the stuff China makes faster, but better, and less expensively.
So now, where size, money, and time used to be major restrictions, there’s no excuse for large American and Canadian firms not to innovate. All they have to do is what they’ve done all along: imitate small companies.