The U.S. economy has been the innovator of virtually all major technologies developed since World War II. The innovative technologies that American inventors and entrepreneurs have invented and developed have benefitted Americans in all aspects of their lives. American manufacturers have been responsible for more than two-thirds of all private sector R&D that led to these innovative new technologies. More than 90% of new patents derive from the manufacturing sector and the closely integrated engineering and technology-intensive services.
Innovation is the hallmark of U.S. manufacturing, and it requires a certain mass of interconnected activities, which like a snowball rolling downhill grows in size as it proceeds towards end users. Substantial R&D is required to keep the innovation ball rolling to ensure more successes than failures.
Manufacturing is an incubator for technology and science, so it is important that R&D be conducted in close proximity to manufacturing plants where innovative ideas can be tested and worker feedback can fuel product innovation.
Innovation and production are intertwined. You need to know how to make a product in order to make it better. “Most innovation does not come from some disembodied laboratory,” said Stephen S. Cohen, co-director of the Berkeley Roundtable on the International Economy at the University of California, Berkeley, told The New York Times. “In order to innovate in what you make, you have to be pretty good at making – and we are losing that ability.
In his book “Great Again: Revitalizing America’s Entrepreneurial Leadership,” Hank Nothhaft, retired CEO of Tessera Technologies, writes: “In our arrogance and our own naiveté, we told ourselves that so long as America did the ‘creative’ work, the inventing, we could let other nations do the ‘grunt’ work – the manufacturing. We did not yet understand that a nation that no longer makes things will eventually forget how to invent them.”
Most cutting edge or break-through technologies are not generated by established, larger companies. They come from the creative innovations of entrepreneurs starting up companies. However, most of these entrepreneurs don’t start up their companies in a vacuum; they are most often started by people who have gained knowledge and experience at existing companies in a technology/product field and leave the company to develop their own innovative new product in that same field.