Manufacturing Innovation in Cities

In a recent interview, Gary Pisano and Willy Shih of Harvard Business School outline the importance of maintaining manufacturing capabilities in the United States. They argue that the loss of manufacturing in the United States endangers our ability to innovate and that American students presently misperceive manufacturing to be all brawn and no brains. We agree and would argue further that focusing on improving opportunities for manufacturers to locate in urban environments can help stem this tide.

Pisano and Shih offer the manufacture of flat panel displays as an example of an activity that does not take place on American soil and thereby hampers our ability to innovate. Basically, when an industry ceases to produce, a firm understanding of the product ceases along with the production. The likelihood of theoretical innovation in an industry falls off a cliff when researchers cannot be part of the commercialization process.

They also point out that the American university system has put a premium on "knowledge" work and has at the same time separated manufacturing from that classification. That effort has stigmatized the process of making things. Fortunately, there seems to be renewed interest from students in getting into making and hacking, evidenced by the popularity of Make magazine and television shows like Mythbusters.

We think that industries should not only return their manufacturing to the United States, but focus on dense urban environments when locating production facilities. "Knowledge work" industries understand this, choosing to locate in New York, Philadelphia, Austin and other cities. Because manufacturing is, in fact, knowledge work, manufacturers stand to gain many of the same innovation benefits by being in urban environments, principally the chance interactions between like-minded individuals and the well-documented creative class density.