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04.04.2007: Dr. Erica Fuchs (EngSystems)
Innovation Myopia?: Beyond Labor Savings in Offshore Manufacturing
Abstract:
My talk provides an introduction to the debate on firm and government policy
regarding the offshoring of manufacturing. I focus on data from two
industries -- automobiles and information technology hardware (specifically,
optoelectronics). In both cases, my results show that when US firms shift
production from the US to countries like China, often the most advanced
technologies that were developed here no longer pay. Production
characteristics are different abroad, and earlier technologies can be more
cost-effective in countries like China. Among other issues, this leaves the
most advanced technologies abandoned, and, in the case of the
optoelectronics industry, creates a barrier to pursuing innovation in these
technologies back the US. I conclude by discussing lessons from the two
cases for a more general framework with which to approach offshoring
policies.
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