Study tries to model manufacturing innovation

A new Manufacturers Alliance/MAPI study provides a unique model of the main determinants of product and process innovation for the U.S. manufacturing sector. The model allows companies and public policy makers to have more certainty in addressing a long-standing dilemma – how to measure innovation and thereby identify appropriate incentives and resources for its promotion. Additionally, the model provides the potential capability to focus on developing a strategic framework and a domestic policy response to address increasing global competition.

“Nothing is more important to the success of American industry in the global economy than leading in innovation,” said Thomas J. Duesterberg, president and CEO of the Manufacturers Alliance/MAPI. “Only by maintaining our historical lead in both product and process innovation can we meet the ever-broadening global challenge. This paper shows us, in a rigorous empirical way, what policies we need to encourage and nurture the innovative process.”

MAPI economic consultant Jeremy Leonard and MAPI economist Cliff Waldman conclude that the level of the science and engineering workforce, expenditures on frontier science in academic institutions, and manufacturing research and development outlays are key components of product innovation.

A key finding in the paper is the relationship between frontier science research at academic institutions and innovation. The study reveals a five-year lag in the process model and a six-year lag in the product model from initial expenditures on basic university R&D to industrial benefit. This accounts for research time, publications, dissemination and absorption by the private sector. “But clearly,” the report concludes, “the investment pays off.