Our economic future lies not in budget talks in Washington, D.C. or arguments about credit ratings on Wall Street, but in the brains and creativity of the engineers and designers at manufacturing firms across the country. Innovation has always driven the American economy — creating new products, which in turn created new revenues and profits, which in turn created new jobs. There’s no reason to believe that Next Generation Manufacturers won’t continue to innovate new industries and new opportunities — but we need to adapt to 21st-century realities to maintain our competitive advantage.
Our manufacturing legacy has laid a foundation for excellence in product development — one that we’ve retained even as production and customer service jobs moved offshore, because headquarters and product development jobs stayed at home. Look no further than the plumbing industry in my own backyard of Northeast Ohio: Moen designs its faucets and manages its global business here, while the other end of the pipe is the domain of Cleveland’s Oatey Manufacturing, which also produces locally. And the means to connect all this plumbing are designed and managed by another Northeast Ohio company, Ridge Tool.
Why do industry innovation clusters like these persist in so-called “Rust-Belt” cities like Cleveland? Because headquarters and product development roles in a particular industry or function are “stickier” than other jobs, remaining closely tied to a talent pool of similar researchers, marketers, and executives. That’s good news, since these roles create more value for corporations and the local economy, and tend to pay higher wages as well.
All of this bodes well — yet there are warning signs on the economic horizon. Why? Because talent thrives when it collides with other talent, creating sparks of innovation that ignite in unexpected ways. But the hollowing out of many Rust-Belt cities— Cleveland, Detroit, Buffalo — has isolated much product development talent in cube farms located at highway exits throughout these regions. It’s hard to be creative when nobody around you has the same passion, or speaks the same design language.
At the same time, legacy industries in these cities are mature — which means that, for the most part, the companies there manage for steady but not spectacular growth. Unfortunately, low growth rates make it harder to recruit new capital, new ideas, and new talent from elsewhere. These companies run the risk of getting stale.
How can we help Next Generation Manufacturers maintain and extend their historic innovation advantage? By focusing on two core strategies:
- We need to make sure that our economic development investments are focused on helping companies to invent, refine, and successfully launch innovative products. Too often economic development gets it backward, measuring success by how quickly lots of (often low-skilled and low-paid) jobs are created. But as our own history teaches, high-paying, long-lasting, sticky jobs only come from innovative products and companies.
- We need to invest in helping manufacturing cities to create localized, specialized industrial design cultures — in part to help the rest of the world recognize our expertise (bringing yet more innovative products here), but also to recruit, train, and inspire the next generation of innovators in our own backyards. Initiatives like Northeast Ohio’s District of Design highlight our footprint on the map of global innovation hotspots.
What are we waiting for?
By John Brandt, CEO, The MPI Group, and Ned Hill, Dean, Maxine Goodman Levin College of Urban Affairs, Cleveland State University
Comments