Why American Innovation Depends on Global Manufacturing

American innovation is closely tied to manufacturing, a sector that’s primed for disruption in the way we do business. However, as McKinsey & Company notes in the whitepaper “Manufacturing the Future”, the U.S. is just one of many nations where manufacturing is rapidly recreating itself.

Manufacturing Goes Global

Manufacturing is rapidly evolving, and its influence is only expected to increase in countries with advanced economies as they recover from the Great Recession of 2008. However, improvements in productivity and global competition will force these territories to specialize in manufacturing unique (or at least more advanced) services moving forward.

In addition to the fruits of homegrown American innovation, you can expect to enjoy an increasing number of breakthroughs in products being developed overseas, as the annual Global Innovation 1000 Study highlights.

The Definition Is Changing

Manufacturing isn’t a single, monolithic industry anymore — far from it. In fact, it falls under multiple, different segments:

Larger segments may include traditional areas of manufacturing such as cars, chemicals and pharmaceuticals. Other segments include regional processing (metal, rubber, food, etc.), energy or resource-intensive goods (paper, petroleum, wood products, etc.), technology (computers, semiconductors, optical gear, etc.) and labor-intensive items (toys, clothing, etc.). In the latter case, American innovation becomes even more important, given increasingly demanding environments and the growing pressures of operating in a global market that consists of greatly varied labor policies.

American Innovation Needs Global Support

Manufacturing is currently in the process of redefining itself, with the emergence of a new “global consuming class” — or an international population of individuals with, well, a lot of money to spend.

By 2025, developing nations/economies are expected to create a wealth of new business opportunities. As Strategy+Business points out, a shocking 94 percent of the world’s biggest and most successful innovators now look to global R&D resources when developing new things. As the whitepaper notes, succeeding in and making the most of American innovation will require manufacturers to embrace a number of new, forward-thinking principles when it comes to operating their enterprise. This includes recruiting technical talent that may not already be in hotspots like Silicon Valley. Think China and India.

When Multiple Markets Work Together

To compete, organizations must adopt more agile business strategies so they can react to competitors, goods and trends that may exist outside the United States but affect the way they do business within it. This means betting bigger on long-term growth opportunities, including exploring the possibility of switching to new materials and investing in emerging markets that could prove complementary to theirs.

Here are some of those manufacturing tools, and how they help enterprises do business more successfully:

  1. The increasing affordability and accessibility of 3D printing, which allows rapid prototyping and the ability to manufacture product parts not previously possible by traditional processes.
  2. The use of drones and robots to more quickly, precisely and affordably manufacture, assemble and warehouse goods for omni-channel retail environments
  3. The Internet of Things, and devices with sensors, software and electrical components that can connect to the web and share data amongst themselves
  4. Alternative materials and new product combinations, which could allow, say, adhesives makers to create even stronger glues made from bio-friendly and naturally occurring environmental sources
  5. The growing use of 3D simulation and modeling to concept, test and refine new products

Global innovation will only continue to grow as manufacturing evolves. Better still, advancements in manufacturing only promise to make the prospect of doing business more affordable, agile and adaptable for business leaders in every field looking ahead.

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