MIT Reports to the President 1997-98


The MIT Industrial Performance Center is dedicated to the study of industries in the United States 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. 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 School 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 IPC received a grant from the German American Academic Council to conduct a research project on International Changes in Industrial Innovation : Consequences for the Research System. This is a collaborative research project with the Fraunhofer Institute for Innovation and Systems Research of Karlsruhe, Germany. The team consists of Professors Richard Lester, Richard Locke and Ed Roberts, and two Ph.D. students from Political Science: Trudy Wilcox and Jeremy Shapiro.

The goal of this project is to make a comparative study of the processes that companies in Germany and the United States are using to acquire new technical knowledge and to apply it to the development of new products, services and production processes. The motivating hypothesis for our research is that these processes have been changing over time in significant ways (perhaps as a result of the growing importance of externally-funded knowledge acquisition relative to the more traditional internal processes). Our task, therefore, is to describe these changes, understand their causes, and analyze their implications both for the sectors under study and more generally for the broader political economies of Germany and the United States.

This year, we have been engaged in doing the field research for two case studies on key innovations in the telecommunications and financial services sectors. We have also begun to design a survey of large corporations engaged in significant R & D activities (i.e., spending above US$150 million per year) which will be sent to companies in the US, Europe and Japan by the end of the summer.

In another new project, the MITRE Corporation and the IPC have embarked on a collaborative research project to examine knowledge sharing and organizational integration at MITRE. The project's goal is to understand organizational structures that creatively integrate knowledge and skills. Because of significant changes in the defense community, particularly decreased funding, ongoing acquisition reform, and increased use of commercial technology, MITRE is adapting new strategies for providing its systems integration services. As more organizations move towards flatter, less centralized organizational structures, the task of integrating individuals and technologies within and across organizations becomes increasingly vital. This research builds on the IPC's extensive studies of design and product development and interpretive approaches to general management problems. Professors Richard Lester and Michael Piore are leading this research.

The IPC is initiating a major new research project on the process of globalization and its effects on domestic economic, social and political structures. The IPC Globalization Project builds on work by faculty associated with the IPC including the 1989 Made in America study and the 1997 Made by Hong Kong study, as well as IPC-based work on globalization published in 1996 in the volumeNational Diversity and Global Capitalism.

New books published by IPC-affiliated faculty this year include, The Productive Edge: How U.S. Industries are Pointing the Way to a New Era of Economic Growth by Richard K. Lester.


The Center's research is organized around four major themes: (1) Technology and the American Worker; (2) Measuring Industrial Performance; (3) New Approaches to Organizational Integration; and (4) Globalization and the Location of Core Production Functions. In addition to the new projects mentioned above, several continuing research projects addressing specific topics under these themes are also underway.

Professor Frank Levy continues his work with Professor Richard Murnane of the Harvard School of Education on computers' impact on the demand for labor. In June of this year, Levy and Murnane were awarded two grants - one from the Sloan Foundation (to MIT) and one from the Russell Sage Foundation (to Harvard) to begin a series of case studies on the computerization of work beginning with a bank and a hospital. Levy is working with Anne Beamish, a Ph.D. candidate in the Department of Urban Studies and Planning, on a project for Ford Motor Company on the organizational obstacles to developing an extranet connection between Ford and its dealers to improve two-way information flow. The project is part of the MIT-Ford research collaboration. Finally, Levy is finishing updating "Dollars and Dreams", his 1987 book on the U.S. income distribution. It will be published this November by the Russell Sage Foundation.

Professors Richard Lester and Michael Piore and their graduate students are continuing their studies of design and product development. Their main focus is on the development of a new theory of interpretive organization applicable to product development and more generally to the management of modern business enterprise. Their research is built on empirical foundation of case studies of new product development in the cellular telephone, apparel, medical device and automobile industries.

Professor Charles Fine and his students continued their research on Technology Supply Chains and held a major conference on Creating and Managing Corporate Technology Supply Chains: Value Chain Design in the Age of Temporary Advantage. This symposium introduced a new lens for strategic business analysis, an expanded scope for the focus of that analysis, and a new implementation framework for incorporating the resulting insights into managerial practice. The lens is that of clockspeed analysis -- harnessing the speed of industrial change for insights into the continual evolution of competitive threats and opportunities. The focus of clockspeed analysis is the chain of capabilities -- from the customer needs all the way upstream to knowledge creation and mineral extraction. Rather than focusing on individual core capabilities, clockspeed analysis examines the entire capability set embedded in the value supple chain to the final customer. The implementation framework is three-dimensional concurrent engineering, which elevates and integrates the "third dimension" of supple chain design into traditional concurrent product and process design, thereby extending strategic vision deeper into these critical business processes.

Professor Locke and his students are continuing their research on new practices and organizational forms now underway in the broad range of local and international unions. They are analyzing the organizational and institutional factors that promote and hinder innovation in the American Labor movement.


The Center sponsors a Doctoral Fellowship program that provides opportunities for highly qualified doctoral students to pursue independent thesis research. Candidates are selected on a competitive basis and are drawn from across the Institute. This year the Center was fortunate to have received a large number of excellent submissions and the fellowship committee awarded an unprecedented four Fellowships: Susan C. Eaton, Integrating Work and Family in Forms of the Future- How Firm Practices Affect Research Workers in BioTechnology; Teresa M. Lynch, After America- Foreign Production and Domestic Employment in U.S. Manufacturing; Aya Okada, Workers' Learning Through Inter-Firm Linkages in the Process of Globalization- A Case of the Automobile Industry in India; and J. Gunnar Trumball, The Politics of Market Regulation and its Impact on Product Innovation.

The IPC Faculty Seminars continued with a series of research seminars focusing on Producing in Asia.

The Center continues to play a role in helping to develop intellectual connections and research collaboration among the Sloan Foundation's national network of Industry Studies. The Center is responsible for the Sloan Human Resource Network, directed by Professor Thomas A. Kochan.

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

Richard K. Lester

MIT Reports to the President 1997-98