Science Policy Research Report: On the Relationships between Manufacturing, Innovation, National Competitiveness, and the Magnitude and Nature of Work

Carnegie Mellon University, Pittsburgh PA

Investigators

Abstract

Shifts in the global locus of manufacturing may affect not just production costs, but alter the nature and pace of innovation, as well as the amount and type of jobs. Despite growth in U.S. manufacturing value added, the number of U.S. manufacturing workers has declined with fewer middle income jobs and displaced workers experiencing persistent, large earnings losses. Increasing productivity and manufactured products that are demanded worldwide and require specialized knowledge and capabilities specific to the United States are important factors for the U.S. to increase its global share of manufacturing value added. Further, for the U.S. to maintain national security and capability to innovate in certain sectors, it likely must manufacture certain advanced products locally. The report summarizes the existing literature on the global redistribution of manufacturing activity from developed to industrializing nations and the implications of those shifts for innovation, national security, and the magnitude and nature of work. The report provides recommendations for policy based on this scientific evidence and notes important areas for additional research. The report reviews publicly available data on longitudinal trends of the global distribution of manufacturing and employment in manufacturing and reviews scientific evidence on the relationship between manufacturing, innovation, national security, and economic and nature of employment. A taxonomy for different categories of technology change in manufacturing, and a preliminary assessment of how each category of technology change may influence the magnitude and nature of employment differently is provided along with a discussion of possibilities for national action, critical areas for improved data collection, and scholarly study.