MIT Reports to the President 1999–2000


The MIT Industrial Performance Center (IPC) is dedicated to the study of industries in the United States and in other advanced economies. The center brings together the intellectual resources of MIT in a search for fresh insights into the nature and origins of successful industrial performance. Through our research we seek to help leaders in business, labor, government, and the universities better understand global industrial development and to work with them to develop practical new approaches for strengthening public policies, business strategies, technical practices, and educational programs. With the participation of about 30 faculty members and more than 50 students from the Schools of Engineering, Management, Humanities and Social Sciences, and Architecture and Planning, the center today serves as a listening post on industry, monitoring and interpreting industrial trends, techniques, and patterns of organization.


The center works to involve MIT faculty and students in activities that bring the real-world performance problems of industry into our classrooms and laboratories. It creates opportunities for researchers to move beyond the boundaries of the Institute into systematic observation and learning about industrial practice in real-world settings. Many of the most important problems in the management of technological enterprise are occurring at the interface of engineering and the social and behavioral sciences. The center is committed to a research enterprise that promotes cross-fertilization and mutual enrichment of these disciplines.

For Academic Year 1999—2000, the IPC awarded three new doctoral fellowships. Pierre Azoulay received a Fellowship for his research using the setting of drug development in the pharmaceutical industry to explore more general issues of incentive design in data producing industries. Jeffrey Furman was awarded a Fellowship to pursue a study of the impact of the magnitude and quality of a region’s public and private scientific base on the organization and productivity of industrial research facilities. Apichai W. Shipper was awarded a Fellowship for his research on innovative social institutions for foreign workers under globalization.

During this past academic year the center launched a new Faculty Seminar entitled The Entrepreneurial, Global University. The seminar examines the social, economic, and technological trends that are reshaping the higher education industry and that may ultimately redefine its role in society. It is designed to serve as a forum in which leading members of the MIT community and the Boston-area academic community more broadly can consider the full range of these developments and reflect on their implications for strategy and practice.


The center’s research is organized around four major themes: Technology and the Changing American Workplace; Organizing Innovation; Globalization and its Implications for Industrialized Societies; and Local Innovation Systems.

The center continues its major research program on globalization. The term ‘globalization’ refers to the set of changes in the international economy that are tending towards the creation of a single world market for capital, goods, and services. In each of these dimensions, globalization raises new challenges for sustaining innovation, growth, societal well being, and broad political legitimacy in the nations it encompasses. The IPC Globalization Study focuses on one aspect of these developments: the fragmentation of the production systems of firms in the advanced economies, and the relocation of parts of these enterprises to other societies. Research on this topic is currently underway in the United States, Europe, Japan, Mexico, China, and Latin America. Under the auspices of the Globalization Study a 20-person team of MIT faculty and student researchers completed the first year of the three-year Taiwan Project, an investigation of Taiwan’s experiences and prospects in globalizing production, innovation, and employment. The IPC Globalization Study team is led by Professor Suzanne Berger (Political Science), and also includes Professors Taiyo Akiwande (EECS), Don Lessard (Sloan), Richard Lester (Nuclear Engineering), Richard Locke (Sloan), Michael Piore (Economics), Charles Sodini (EECS), Sonny Siu (Mechanical Engineering), and Edward Steinfeld (Sloan), and also includes research affiliates from Germany, Japan, and Taiwan. In July the IPC held its first annual Globalization Conference in Taipei, Taiwan. The center also co-sponsored, with Academic Sinica, a Workshop on Networked Production and Globalization which brought the IPC research team together with leading social scientists and technologists from Taiwan.

Professors Lester and Piore and their students continued their research on design and product development. Their main focus is on the development of a new theory of interpretive management applicable to product development and more generally to the management of modern business enterprise. Their research is built on an empirical foundation of research on new product development in the cellular telephone, apparel, medical device, automobile, and systems integration sectors.

This year the IPC launched a new program of research on local innovation systems. The research centers on a comparative study of the conditions of innovation in several local and regional agglomerations of technology-based enterprise, including the Boston area in the United States, the Cambridgeshire cluster in the U.K., the Hsinchu-Taipei corridor in Taiwan, the Helsinki region of Finland, and technology clusters in Israel and Ireland. The research will explore the relative importance of national and local influences on innovation performance. It will focus on the role of research universities as contributors to innovation and economic growth in these regions, and also on the relationships between large and small firms.

In December the IPC organized a conference at MIT to present the results of its research on "International Changes in Industrial Innovation: Consequences for the Research System." Approximately 250 CEOs and chief technology officers from North America, Europe and Japan attended. This was a collaborative research project with the Fraunhofer Institute for Innovation and Systems Research of Karlsruhe, Germany and the National Institute for Science, Technology and Economic Policy in Japan. The project included a major global benchmarking survey of the technology management practices of 200 of the world’s largest technology-intensive corporations, based in North America, Europe, and Japan. The IPC team was led by Professors Richard Lester and Ed Roberts.

More information on the Industrial Performance Center can be found on the World Wide Web at

Richard K. Lester

MIT Reports to the President 1999–2000