The Industrial Commons – part 2

In the last blog, I reviewed the concept of the Industrial Commons which was introduced by Gary Pisano and Willy Shih.  In their July-August 2009 article on “Restoring American Competitiveness” they suggested some key action steps for government and business to protect and regain our edge in high-tech manufacturing and innovation.

What Government Must Do

  • Reverse the slide in the funding of basic and applied science.  Basic scientific research is about deepening our understanding of first principles, and applied research seeks to extend that knowledge to answer specific questions about real-world programs.  Commercialization takes applied research into the market.  They argue that government has been particular weak in funding applied research.
  • Focus resources on solving “grand challenge problems” like climate change, breaking the dependence on hydrocarbons for energy, and addressing the ravages of diseases.
  • Let ailing giants die (e.g. allowing the bankruptcy of GM and Chrysler).  Pisano and Shih opposed the automotive bailout.

What Businesses Must Do

  • Make capabilities the main pillar of your strategy. The authors chide companies for putting ‘brand development’ over innovation and enhancing the capabilities of their goods and services.  Apple, Intel, Corning, Amazon, and Applied Materials received pats on the back for their investments in building new capabilities.
  • Stop blaming Wall Street for short-term behavior.  They say that companies need to think long-term and not back off.  “When they (companies) articulate a credible long-term strategy and demonstrate a capacity to execute that strategy, the capital markets have given them the necessary room to achieve it.”
  • Recognize the limits of financial tools.  The authors argue that some of the quantitative techniques in corporate America make short-term investments look more attractive than long-term investments.  They say that these analytic tools are hurting the long-term prospects for innovation.
  • Reinvigorate basic and applied research.  Pisano points out that a few companies like IBM and Corning have maintained strong corporate research capabilities and look to them for the next wave of innovation.  Other companies have allowed their corporate research infrastructure to wither.
  • Collaborate. Pisano points to IBM’s approach of “radical collaboration“ in which it and a set of commerce partners share research capabilities and a common manufacturing platform.
  • Create technology-savvy boards of directors.  Basically, boards of directors need to include techno-geeks, not just finance and marketing experts.

How does this relate to the U.S. Talent Supply?

Now, I didn’t really intend to spend a lot of time talking about government and corporate policies related to R&D investments, bailouts, and Return-on-Investment analysis.  But those of us in education and workforce leadership need a deeper understanding and appreciation for all the factors that affect the innovation eco-system.  In fact, U.S. strength in these other eco-systems factors are why we have maintained our strong competitive position for so long, in spite of our education shortcomings.  So, let’s start honing in on a major factor in the innovation eco-system, America’s talent supply.

First, take a look at some big picture ideas communicated in “Rising Above the Gathering Storm” published in 2007 by the National Academies of Sciences and Engineering, and the Institute of Medicine.  An expert panel was formed at the request of Congress, specifically to provide suggested federal policy actions that could help buttress American competitiveness in the face of intensive global competition. It’s an important report and can be found at the National Academies Press website.

The panel spoke about the heart of American competitiveness this way, “Because other nations have, and probably will continue to have, the competitive advantage of a low wage structure, the United States must compete by optimizing its knowledge-based resources, particularly in science and technology, and by sustaining the most fertile environment for new and revitalized industries and the well-paying jobs they bring.”

Ultimately, we can’t build and protect our Industrial Commons without a steady supply of highly-skilled talent – both at the research, design and technician levels.  We need a new workforce that is literate in technology and engineering (design) and able to apply mathematical reasoning and scientific knowledge to solving problems and creating new goods, services and processes.  This is what I think of when I use the term STEM (science, technology, engineering and mathematics).   The National Academy issued a stern warning about what happens if we fall short of sustaining our innovation eco-system and creating the right talent supply:

Without high-quality, knowledge-intensive jobs and the innovative enterprises that lead to discovery and new technology, our economy will suffer and our people will face a lower standard of living.”

Well said.  We need to keep saying it.  And we need to take the right actions – from the Halls of Congress, to the local school board meeting room, to the local Chamber of Commerce education and workforce committee, that will respond appropriately to this warning.

Next – why I’m finally getting on the STEM bandwagon.

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3 Comments on “The Industrial Commons – part 2”

  1. Can you name an industry that doesn’t have entrepreneurs? WE can’t…and that is why we ask why entrepreneurship education experiences are not universally included at all levels of education?
    Restoring business competitiveness requires a population that understands and appreciates entrepreneurs…and that should be part of our educational culture.

    It would be a great start if everyone celebrated National Entrepreneurship Week, February 20 – 27, 2010 ….and tested themselves on the “20 Questions for All Americans”. Check it out at! And while you are there please read and share “Career Ready with Entrepreneurship ….a Key 21st Century Skill”. National Entrepreneurship Week is the last week in National Career & Technical Education Month!

    • Great insight, Cathy. In a fast-moving economy where responsiveness and speed are critical factors, companies benefit when everyone thinks like an entrepreneur. Thanks for your efforts to raise visibility to the issue and letting us know about the National Entrepreneurship Week.

  2. Rob Franks Says:

    I have been concerned about we as a country intend to resolve the growing international debt without making anything to sell (other than food). As shown in an earlier blog and apparent to anyone who is paying attention America is losing its manufacturing capability, even in basic needs such as steel.

    However the answer is for America to do what we do best, innovate and create. The question is how do we do that when our students are not motivated, expect everyone to accept anything less than 100%, and are taught to simply regurgitate facts? Many students seeem to feel that schooling itself is irrelevant.

    We measure student’s achievements with multiple choice standardized tests to meet “standards” and we force them into “one size fits all” educational programs. So I guess that their educational experiences match what is expected of them.

    I believe that every student that graduates from high school should have some skill that they can use to support themselves with even if they plan on a postsecondary education. everyone can use a parachute sometimes. Students should be allowed and encouraged to pursue specific career pathways if for no other reason than to keep them interested in learning.

    As an old-time Tech Prepper I saw these types of programs work for students but for some reason states and local ISDs are abandoning Tech Prep initiatives. My state has also recently abandoned career clusters. All of this some say is due to cost concerns and funding really needs to be concentrated on meeting standardized test expectations, which is what they are graded on.

    Perhaps what we need to do is totally rework our educational system to closer match the European model rather than continuing to keep applying lipstick to the corpse and expecting it to look better.

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