The Industrial Commons

Before I get started, has anyone held that Oprah is trying to copyright the term “aha moment?”  Is that true or just another urban myth?

Anyway, I recently had an “aha moment.”  But in deference to Oprah, I’ll call it my “Light bulb moment”™©.

Anyway, I’ve been really trying to get a better grasp on how education can link up with the need for highly- skilled workers that can help create a competitive regional business climate.  In some recent federal legislation, like the Perkins Career and Technical Education Act, there are extensive references to “high skill, high wage, and high demand” occupations.  High school and college CTE programs are supposed to identify these occupations and link their programs to them.  I won’t get into the vagaries of trying to figure out and apply congressional intent, but let’s just say it is much easier said than done.

Skilled Workers and Economic Drivers

I think that policymakers were ultimately grappling with a way to put the focus on education and training that will build the talent base for a region’s economic drivers to thrive.  A good working definition of an economic driver that I came across is “an industry that stimulates economic growth and creates spin-off jobs in a region.”  In other words, these are companies in a particular industry sector that generate enough profit so that that their growth ripples outward creating demand for additional jobs in that sector.  Ultimately, as the economic drivers in a region grow, they create business profits and individual prosperity that spark demand for other goods and services.

Much of education and training is focused on training for jobs in this outer circle of goods and services.   Often, these are in fact “high-wage and high-skill” jobs.  But they won’t exist for long if the core economic drivers in a region aren’t healthy.  Look at what has happened to the home construction industry.  So I’m wondering about how we get smarter in developing the talent base that directly supports our regional and national  economic drivers themselves.

The Industrial Commons

Gary Pisano and Willy Shih helped flip the switch for my “light bulb moment” as I read their essay from the July-August 2009 edition of Harvard Business Review titled “Restoring American Competitiveness.”  They explained the important concept of the “Industrial Commons.”   You can read the beginning of the article online here and purchase a reprint if you care to —  Perhaps there’s a free version floating around somewhere.

Pisano and Shih draw their concept of “the commons” from the historical example of shared lands in a town where animals belonging to people in the community would graze.  The commons didn’t belong to any one person, but was a benefit shared by all in the community.  The “Industrial Commons” refers to a foundation of knowledge and capabilities (technical, design and operational) that is shared within an industry sector, such as “R&D know-how, advanced process development and engineering skills, and manufacturing competencies related to a specific technology.”   They note that these industrial commons are still mostly geographical, because they are centered around people who move from one firm to another within a region, or who collaborate between firms in a supply chain.  They observe that during the last couple decades as U.S. firms have outsourced bits and pieces of various manufacturing and engineering sectors to low-cost developing economies, there came tipping points when the full design and manufacturing capability (the industrial commons) was lost from the U.S. and the commons essentially emigrated to another locale.  They warn that once an industrial commons is lost, it is nearly impossible to retrieve.

As an example, Pisano and Shih observe that in the Computing and Communications sector, the U.S. has already lost its capabilities in desktop, notebook and netbook PCS, low-end servers, hard disk drives, consumer-networking gear such as routers, access points, and home set-top boxes.  And the U.S. is at-risk of losing blade servers, midrange servers, mobile handsets, optical-communication components, and core network equipment.

They demonstrate that Amazon’s Kindle 2 can’t be made in the U.S.  Its flex circuit connector is made in China; its electrophoretic display is made in Taiwan; its highly polished injection-molded case is made in China; its wireless card is made in South Korea; its lithium polymer battery is made in China, and its controller board is made in China.  In every case, the specialized expertise to manufacture these parts migrated out of the U.S. at some point in the recent past.

Despite the media’s nay-saying, all is not lost.  The U.S. still has the world’s largest output of manufactured goods and there are positive signs.  But there is a real danger of losing our advanced manufacturing sectors if companies continue to outsource our industrial commons to our eager friends and competitors.

How do we stem the loss and begin to rebuild our design and manufacturing expertise?  I’ll summarize Pisano and Shih’s recommendations for government policy and corporate policy in the next blog.  I also plan to share some exciting work that is happening in Northwest Florida, linking up the education sector to that region’s industrial commons.

In the meantime, let us know if you’re seeing substantive work on linking education to the economic drivers of innovation in your region.

To the future!


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11 Comments on “The Industrial Commons”

  1. As the Consortium for Entrepreneurship Education looked at the need for integrating Entrepreneurship Education into the Nation’s Workforce Development System one of the places reviewed was the Great Northwest Initiative in Florida. Al Wenstrand the Executive Director is someone I had known when we were both active in Marketing Education in the Public Schools.

    The entrepreneurial focus of Florida’s Great Northwest is on bringing new technology to the market as well as supporting research and development activities across the region and within target industries. A key strategy in Florida’s Great Northwest regional economic development plan is to support the growth of locally-founded target industry businesses. Current efforts in supporting entrepreneurial development include the formation of an Entrepreneurship Advisory Council tasked with identifying the spectrum of needs to assist entrepreneurs, plus an analysis of the status of the region.

    The initiative focused on development of an entrepreneurial business climate and creative communities that appeal to the new generation of workers. Mr. Wenstrand told us that to be successful in new business development in knowledge-based industry clusters, the region must embrace an environment supportive of entrepreneurial activity and must create the type of work and living environment supportive of the creative Class or the techie society.

    Florida’s Great Northwest focuses on supporting the philosophy of developing creative communities that attract and retain the increasingly diverse, mobile workers who will drive tomorrow’s economy. Incentives to help the new company require partnerships to bring together the type of worker with the type of training needed. Working with the schools and the variety of post secondary institutions in the region the Great Northwest initiative has been able to help educators see the need for the blend of technical skills and entrepreneurial skills essential for emerging businesses.

    Perhaps it is hard to revive the Industrial Commons once lost but when communities see a remenant they can focus it and make the community a growth in their regional speciality. Realizing that 89% of the business in the US employ 5 or fewer workers demands that an entrepreneurial education and support component be in place to help revive the Industrial Commons.

  2. Excellent article and agree the capitalism is alive and well in America, thus the outsourcing. Speaking on behalf of our institution, and is probably so for many institutions. We have advisory committees for all of our workforce programs which comprise of relevant business and industry partners. These partners share, suggest, and recommend areas of concern in curriculum that would best suit their and the students’ needs. Basically, they have a say on learning outcomes for our students so that they will be better prepared upon entering their workforce of choice.

  3. Vicki Jenkins Says:

    I have been reading an interesting book by Nel Noddings entitled “When School Reform Goes wrong”. She discusses why school reform efforts have failed (she gives 10 really good reasons), but her number 10 reason is the most poignant when she states, “Perhaps the most important of all, restore genuine respect for the full range of human talents and occupations.” While I certainly am a proponent of advanced education (I’m currently a doctoral student myself), we as a nation are doing a terrible injustice to our students when we tell them the only measure of success is a four year college education. The trades are quickly becoming a lost art/craft and we are beginning to see the effects of those lost trades. As a career and technical school administrator, I see firsthand the wonderful opportunities students have in pursuing the “trades”.

  4. Billie Reed Says:

    Great blog and comments. As far as our region, the local two year college has implemented a new Entrepreneurship program. Which provides an avenue for new business endeavors. I look for more great ideas on how to assist the community (schools, college, business/industry, etc.) to stay vital.

  5. Ann Jordan Says:

    Excellent post, Hans. I intend to share much of it with educators and students. It’s important for them to have this information when making career planning decisions.

  6. Derek Price Says:

    The Joyce Foundation is supporting the Shifting Gears Initiative in six Midwest states to strengthen their postsecondary, adult basic education, and skills-development systems so that more low-skilled workers gain the education, skills, and credentials needed to advance and succeed in our changing economy. Part of this effort in each state is to better connect the human capital and skill demands of local and regional economies with the education and skills development systems. FInd out more at

  7. Mike Fatkin Says:

    As a 30 year veteran of Career and Technical training I think Ms.Jenkins perspective is “spot on”. I am apprecitive of her observation noting the trades as a “lost art”; we lose those elements that define our society when we no longer assign a value to them. Our progression from a hunting/gathering society was driven by our inquisitive/intuitive nature; the solutions derived from that thought process were in turn “taught” by the elders of the craft to those who would perpetuate it. That communication link has been lost in todays working world and is in effect no longer a “valued practice”.Equiping our students with the requisite knowledge for success in their chosen field and connecting them with the knowledge base of senior craftsmen would restore honored traditions.I am concerned that our current reliance upon icon prompted problem solving could be stifling the skills that fueled the mental engines of success.

  8. Rob franks Says:

    I have been concerned for many years about the continued leaking away of America’s manufacturing base. I am not an economist but it is pretty apparent that the way to correct the balance of trade is to make or produce something that can be sold overseas. Our increased buying simply increases the defficit. Like the recent housing crisis it all goes back to greed on the part of the few to destroy the future of the many.

  9. Hans,
    Thanks for starting this blog. As always, I appreciate your insight.
    As the former Director of CTE and the nationally and internationally acclaimed CHOICE program in Okaloosa County (Northwest Florida), I have always believed it to be vital to connect education with the economic drivers of my community. This process establishes a compass that guides the education system in producing students with marketable skill sets and a prospective and sustainable talent pipeline for the local economy.
    Regional economic development organizations like Florida’s Great Northwest are invaluable when it comes to helping communities identify key economic drivers in their region. As an example, in Northwest Florida, the Aerospace and Defense industry is a critical driver for the region. When we developed one of the nation’s finest high school aerospace academies at Choctawhatchee High School with Embry Riddle Aeronautical University as the postsecondary partner, we actually developed a “seamless solution” for the Northwest Florida community. The same could be said for other areas such as Information Technology, Construction Technology, and Health Science. Of course, what we also developed were STEM opportunities. As we all know, you can’t teach the principles of flight, construction management, and technology (CISCO Networking) without an enormous amount of Science, Technology, Engineering, and Mathematics integration.
    In my current role as a principal in the national consulting firm, The Whetstone Group, it is my job to help communities and, more importantly, education systems to understand the significant positive impact to individual students and the entire community when educational offerings are linked to forecasted industry needs. Education systems making data-driven decisions correlated to the economic development of their individual communities produce great results. Having experienced it, I can tell you first hand the results of students graduating from high school and/or college with marketable skill sets is remarkable to say the least. Incidentally, our product acronym is LEAD, which stands for Linking Economic and Academic Development thru Workforce Innovations ©.We currently have several projects under way in different states, and I look forward to sharing the results with you in the future.

    • Thanks, Jeff. The work in Northwest Florida really has been impressive, and I’m excited that you’re now expanding your work to other communities. Creating that link between education and the economy is vital.

  10. Sue Ni Says:

    Hi Hans thanks for the summary.
    I’ve been thinking of Industrial Commons as the lost opportunity we’ve created by planned obsolescence in which goods are made for disposal not repair or even recycling. How many low grade technical opportunities for employment in not having goods made serviceable by repair.

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