Production in the Innovation Economy

Massachusetts Institute of Technology

Making in America

From Innovation to Market

By Suzanne Berger with the MIT Task Force on Production in the Innovation Economy



America is the world leader in innovation, but many of the innovative ideas that are hatched in American start-ups, labs, and companies end up going abroad to reach commercial scale. Apple, the superstar of innovation, locates its production in China (yet still reaps most of its profits in the United States). When innovation does not find the capital, skills, and expertise it needs to come to market in the United States, what does it mean for economic growth and job creation? Inspired by the MIT Made in America project of the 1980s, Making in America brings experts from across MIT to focus on a critical problem for the country.

MIT scientists, engineers, social scientists, and management experts visited more than 250 firms in the United States, Germany, and China. In companies across America--from big defense contractors to small machine shops and new technology startups--these experts tried to learn how we can rebuild the industrial landscape to sustain an innovative economy. At each stop, they asked this basic question: “When you have a new idea, how do you get it into the market?” They found gaping holes and missing pieces in the industrial ecosystem. Critical strengths and capabilities that once helped bring new enterprises to life have disappeared: production capacity; small and medium-size suppliers; spillovers of research, training, and new technology from big corporations. (Production in the Innovation Economy, also published by the MIT Press in 2013, describes this research.)

Even in an Internet-connected world, proximity to innovation and users matters for industry. Making in America describes ways to strengthen this connection, including public-private collaborations, new government-initiated manufacturing innovation institutes, and industry-community college projects. If we can learn from these ongoing experiments in linking innovation to production, American manufacturing could have a renaissance ... now available at The MIT Press


Production in the Innovation Economy

Edited by Richard M. Locke and Rachel Wellhausen



Production in the Innovation Economy emerges from several years of interdisciplinary research at MIT on the links between manufacturing and innovation in the United States and the world economy. (This ambitious research project is described in Making in America: From Innovation to Market, also published in 2013 by the MIT Press.) Authors from political science, economics, business, employment and operations research, aeronautics and astronautics, mechanical engineering, and nuclear engineering come together to explore the extent to which manufacturing is key to an innovative and vibrant economy.

Chapters include survey research on gaps in worker skill development and training; discussions of coproduction with Chinese firms and participation in complex manufacturing projects in China; analyses of constraints facing American start-up firms involved in manufacturing; proposals for a future of distributed manufacturing and a focus on product variety as a marker of innovation; and forecasts of powerful advanced manufacturing technologies on the horizon. The chapters show that although the global distribution of manufacturing is not an automatic loss for the United States, gains from the colocation of manufacturing and innovation have not disappeared. The book emphasizes public policy that encourages colocation through, for example, training programs, supplements to private capital, and interfirm cooperation in industry consortia. Such approaches can help the United States not only to maintain manufacturing capacity but also, crucially, to maximize its innovative potential...forthcoming, The MIT Press

Joyce Lawrence, Richard K. Lester, Richard M. Locke, Florian Metzler, Jonas Nahm, Paul Osterman, Elisabeth B. Reynolds, Donald B. Rosenfeld, Hiram M. Samel, Sanjay E. Sarma, Edward S. Steinfeld, Andrew Weaver, Rachel L. Wellhausen, Olivier de Weck


Made in America

Made in America was a very influential book published by the 1986-1989 MIT Commission on Industrial Productivity. The PIE study is inspired by this study and will update many of its findings in the changed new world of the early 21st Century...more