MIT Reports to the President 1995-96


The MIT Industrial Performance Center is dedicated to the study of industries in the US and in other advanced economies. The Center brings together the intellectual resources of the Institute in a search for fresh insights into the nature and origins of successful industrial performance, and seeks to develop practical new approaches for strengthening public policies, business strategies, and engineering practices concerning these important issues. With the participation of about 30 faculty and more than 50 students from all five Schools at MIT, the Center today serves as a listening post on industry, monitoring patterns of organizational and technological practice, interpreting them for our industrial partners, and feeding our observations back into the core disciplines and departments of the Institute.

In March, the Industrial Performance Center (along with the MIT International Science and Technology Initiative/China program) received a major grant from industrial, trade and government organizations in Hong Kong to conduct a research project entitle Made By Hong Kong . The specific objectives of the study are to analyze the role of industry in the future development of the Hong Kong economy and to formulate recommendations for government, industry, and academia based on this analysis. More broadly, the research seeks to understand how a society with a strong manufacturing past can develop new strengths and new activities; how industries operating in the larger China region can utilize the advantages presented by the proximity of a large market, low-cost labor, and access to emergent strengths in advanced technology; and how economic capabilities, employment, and social well-being can be maintained even as many of society's production facilities move outside domestic territory. These are the challenges that Hong Kong confronts over the next decade; they are, as well, problems that all advanced industrial countries face today. The project leaders are Suzanne Berger, Professor of Political Science and Director of the MISTI/China program and Dr. Richard K. Lester, Professor of Nuclear Engineering and Director of the Industrial Performance Center.

During this past year the Center continued to develop its role as a significant contributor to the interdisciplinary intellectual life of the Institute, and the group of faculty that regularly participates in its activities continues to grow. The center continues to sponsor the IPC Faculty Seminar. This seminar continues to play an effective role in strengthening the sense of community among a diverse group of faculty already working on industrial performance-related research, and has also attracted other faculty with a more general interest in these problems. Currently, thirty faculty from all five of the Institute's Schools are active participants in this series.


The Center's research program continues to be organized around three broad themes: (1) new approaches to organizational integration, (2) the international configuration of production, and (3) technology, skills and wages. Several research projects addressing specific topics under these themes are underway.

Professor Charlie Fine and his students continued their studies of technology supply chains in the automobile and microelectronics industries. Professors Richard Lester and Michael Piore and their students continued their research on alternative conceptual approaches to the organization of design and product development activities. During the past year their primary focus was on product development in the cellular telephone sector. Visiting Professor Maryellen Kelley continued her research on the introduction of programmable automation technologies and the impact of alternative approaches to employee participation on performance in the durable manufacturing goods industries. In related work, Doctoral Fellow Rose Batt studied the influence of self-managed teams as well as off-line problem-solving groups on the performance of a major regional Bell telecoms corporation. Professor Kelley also continued her research on the evolution of supplier relations and contracting practices in the defense industry. Professor Erik Brynjolfsson and his students made significant progress in their research on the productivity impacts of information technology. Professors Suzanne Berger and Ron Dore completed a major project on the nature and extent of convergence of national industrial policies and institutions caused by the globalization of capital markets and the expansion of world trade. As part of a larger investigation of the effects of new technologies on skill requirements and wages, Professor Frank Levy and Professor Richard Murnane began a study of changing occupational structures and skill requirements in a major local financial services institution. Finally, researchers at the Center are assembling a comprehensive database of industrial performance indicators covering the United States and other advanced industrial societies at a detailed industry level.


The Center continues to sponsor an interdisciplinary graduate seminar for doctoral students from around the Institute who are engaged in research on subjects related to industrial performance. In addition, in recent years faculty associated with the IPC have initiated five new graduate courses based substantially on the results of their research at the Center: Information Technology as an Integrating Force in Manufacturing (Prof. Brynjolfsson);Technology, Productivity, and Industrial Competition (Prof. Lester); Managing People and Organizations in a Changing World Economy (Prof. Locke); The Massachusetts Economy and Economic Development (Prof. Levy) and Domestic Politics of Trade and Integration (Prof. Berger, with Professor Peter Hall of Harvard).

The Center continues to sponsor a Doctoral Fellowship program that provides opportunities for highly qualified doctoral students to pursue independent thesis research in fields related to the Center's mission. Candidates are selected on a competitive basis and are drawn from across the Institute. To date, 13 fellowships have been awarded.


The Center continues to play an important role in helping to develop intellectual connections and research collaborations among the Sloan Foundation's national network of Industry Studies, now ten in number. The Center is responsible for the Sloan Human Resources Network, which was created to support research and to encourage communications among those doing human resources-related research with the Industry Studies. During the past year, the Network organized a conference jointly with the National Center for the Workplace on the results of the Industry Studies to date in this area. The HR Network also formed a working group on white collar employment issues. This group organized a conference in July 1994 and the resulting papers will be published by Oxford during the coming year. Finally, the Network also organized the second conference for Ph.D. students affiliated with the Industry Studies. This was held at MIT in June 1995. The second HR Network meeting was held in San Francisco in January 1996. It was organized by Frank Levy and Tom Kochan. The focus was on what the industry studies can contribute to our understanding of economy-wide earnings trends - related in particular to the declining demand for semi-skilled labor driven by technological change and international trade.

Richard K. Lester

MIT Reports to the President 1995-96