Innovation and Product Development 

in the 21st Century

Gary Yakimov and Lindsey Woolsey with Contributions from MEP Staff

Hollings Manufacturing Extension Partnership Advisory Board February 2010
Introduction .....................................................................................................7 

Exploring the Complex Reality of Manufacturing Today .......................9

Is U.S. Manufacturing Disappearing? .........................................................10

Is Manufacturing Still Important to the U.S. Economy? .............................10

Are There High Quality Manufacturing Jobs Left in the U.S.? ...................13

Can Innovation Alone Rebuild the U.S. Economy?...................................... 14

Can Firms Simply Follow the Market to Stay Competitive? .......................16

Characteristics of Successful Manufacturers .......................................18

Innovate Constantly to Adapt to Economic and Technological Changes ....19

Embrace Green and Green Lean ..................................................................21

Recognize and Navigate Opportunity in the Global Value Chain ................23

Develop and Retain Current and Future Talent ...........................................27

Opportunities for Action .............................................................................31

Innovate Constantly to Adapt to Economic and Technological Changes ....31

Embrace Green and Green Lean ..................................................................32

Recognize and Navigate Opportunity in the Global Value Chain ................33

Develop and Retain Current and Future Talent ...........................................34

Appendix .......................................................................................................36 

A: U.S. Products Lost or At-Risk to Globalization .......................................36

B: Understanding the Global Marketplace ..................................................37

C: Sustaining the Supply Chain: Suggested Model for Decision Making ..38

Acknowledgements ....................................................................................38

Endnotes ........................................................................................................40

Table of Contents
February 2010 | Hollings Manufacturing Extension Partnership Advisory Board 2

Manufacturing policy in the U.S. is at a critically important juncture. No fewer than a dozen reports 

and studies with various conclusions and recommendations have been issued regarding manufacturing 

since the Presidential Election of 2008. Most of these reports were drafted by special interests with 

pre-determined agendas that paint manufacturing as either a leaner, stronger sector than ever before 

or an industry in dire condition. At the Hollings Manufacturing Extension Partnership Advisory Board 

(“MEP Board”) we believe the truth lies somewhere in between. The reality about manufacturing is that 

it is complicated and not easily captured by a single data point or a single picture of either impending 

demise or dramatic revival.

Our report and the subsequent Opportunities for Action call for a federal policy that promotes technical 

assistance over compliance and recognizes that America’s manufacturers need the public, private, 

and education sectors operating in unison and taking responsibility for a competitive future based 

on reasonable economic fundamentals. No one entity can address what ails manufacturing, nor can one successful firm be held up 

as indicative of appropriate solutions.

This paper lays out the complex realities of the manufacturing industry, identifies responses of successful firms to the dynamic 

technological and economic changes in front of them, and suggests opportunities for action that can be taken to help leading 

manufacturers retain their global competitiveness while helping all manufacturers navigate the difficult terrain before them. On

behalf of the MEP Advisory Board I want to stress the need to move forward with a manufacturing policy. While some will argue 

that we should not have a formal industrial policy, we believe we already have one. What has evolved as our policy is a disjointed 

set of interventions related to taxation, trade, health care, tort reform, energy, regulation of the financial sector, and the by-product 

of a near-heroic effort to restructure the domestic automobile assembly industry. The law of unintended consequences is our de facto 

policy. The U.S. has a choice: do nothing and continue as is, or establish a set of policies that help leading American manufacturing 

firms make the transition to product innovation, development, and deployment in new sales and new markets. 

We are encouraged by the events of late 2009 and the efforts of the Vice-President’s Middle Class Task Force to recommend formal 

manufacturing policy options. We look forward to a renewed conversation about the future importance and direction of manufacturing 

as the economy continues its recovery. We also encourage that federal and state governments recognize that this is a time of transition 

for many programs of relevance to the nation’s manufacturing base. They will need to respond to new policy mandates related to climate 

change and environmental quality. They will need to help employers respond to structural changes in the value of the dollar versus other 

currencies. And they will have to work hand-in-hand with employers to sustain a globally competitive workforce.

Just as the MEP program systematized and popularized lean manufacturing over the past 20 years, there is an important role for 

intermediary organizations in developing tools and systems of practice that will sustain American manufacturing competitiveness

in the future. Many of these organizations and their contributions are cited in this report; some are not. However, all are part of the 

important industrial commons that is the public’s contribution to a prosperous future. We can do more to learn about these programs, 

anticipate demands that will be made upon them, and make them more responsive to the increasingly competitive marketplace. 

The MEP Board, MEP national program office and the nationwide system of MEP affiliates look forward to the continued conversation

about the future of U.S. manufacturing. 

Sincerely,

Edward W. (Ned) Hill, Chair 

Hollings MEP Advisory Board and

Dean, Maxine Goodman Levin College of Urban Affairs, Cleveland State University

Letter from the Chair

Edward W. (Ned) Hill, Chair
3 Hollings Manufacturing Extension Partnership Advisory Board | February 2010

Introduction and Purpose

U.S. manufacturing is 

at a critical crossroads. 

Policymakers have a 

choice to establish a 

framework to guide the 

future of manufacturing 

in the U.S. and to 

accelerate adjustments 

to markets or leave its 

future up to serendipity, 

chance, complacency, 

and indifference. U.S. 

policymakers can help 

manufacturing firms 

change, innovate, move 

into new markets, and 

adapt to a constantly 

changing global 

economic environment 

or operate under the 

false assumptions that the industry is not worth the effort. As the third largest economic sector in the U.S. economy, one that 

pays premium wages, and creates more total direct and indirect jobs than any other sector, manufacturing is worth a focused, 

pro-active federal policy agenda. Without one, the risks to U.S. living standards, national security, and economic security are 

too great. 

Manufacturing is an important part of the nation’s competitive backbone and represents a large, complex and diverse cluster 

of industries made up of individual firms that undertake a broad spectrum of activities. These activities extend far beyond 

production. They include research, design, logistics and distribution, technological services, back-office support, and customer 

care, among others. Over the past several decades, each of these activities has been outsourced to some degree, depending 

on the precise cost and quality needs of an individual firm. 

As a result, manufacturing has become a decentralized, complex web of suppliers and distributors that extends across 

the globe. Indeed, in this era of globalization, it is often hard to identify the nationality of a firm. Traditional large U.S. 

manufacturers have many overseas operations, while foreign companies like Toyota and Novartis have U.S. facilities that 

employ thousands of U.S. workers. It is this picture that makes defining U.S. manufacturing more complex than it once was, 

but perhaps more important too. Acknowledging its complexity, the MEP Advisory Board believes, will lead to a set of modern 

and relevant public policies that will increase competitiveness for all manufacturers, and therefore be good for U.S. workers, 

communities, and consumers. 

Executive Summary

What makes this transition work?

Manufacturers that innovate, navigate the global 

value chain, cultivate workforce talent, and 

embrace lean and green. Public policies that help 

not hinder, private sector behavior.

New ideas about processes, services, 

and products are generated constantly on 

shop floors, in research institutions, and in 

garages around the country.

That’s innovation.

What stops the process?

An inability by manufacturerers to access new 

technologies, new markets, skilled workers, and 

efficient energy practices. 

Disconnected public policies focused too heavily on 

compliance and not technical assistance.

Producing innovative goods, and constantly improving 

the process and service components that comprise 

a product — That’s Manufacturing in the U.S. 

today.
February 2010 | Hollings Manufacturing Extension Partnership Advisory Board 4

Exploring the Complex Realities of Manufacturing Today

Recent reports and studies paint a diverse portrait of the health and vitality of the current and future manufacturing industry 

in the U.S., as well as its importance in the U.S. economy. Is it thriving or merely surviving? Manufacturers themselves 

disagree about the health of their industry, some painting a rosy picture of a leaner, stronger sector than ever before; others 

warning that the industry is in dire condition. The reality lies somewhere in between; manufacturing is complicated and 

cannot be captured in a single data point nor is it captured in a single picture of impending demise or dramatic revival. 

However, there are a set of complex realities that apply to the industry broadly. Understanding these complex realities 

is critical to understanding how and why federal policy action can help shape a more vital industry, and therefore more 

prosperous communities. Consider the following points: 

•	 Manufacturing remains a significant part of the U.S. economy, generating $1.64 trillion worth of goods in 2008. If U.S.

manufacturing were a country in itself it would represent the 8th largest economy in the world. But...

...Manufacturing is no longer the dominant sector of the U.S. economy but it remains a critically important component. 

As of 2008, it represented 12% of GDP, down from nearly 30% in the early 1950’s.

•	 The U.S. share of global manufacturing value added is holding steady and among all U.S. exports, manufactured products

are the most dominant, accounting for 57% of total value. But....

	 ...The U.S. trade deficit for high-tech products in 2007 was $54 billion, nearly doubling the $29 billion deficit of 2000.

•	 Manufacturing pays nine percent higher in wages and benefits than the overall economy, and nearly one in five jobs in

science and engineering are in the manufacturing sector (2nd highest). But...

...Employment in manufacturing as a share of total U.S. employment has fallen from about one in three jobs in 1950 to 

one in ten jobs today. 

•	 In 2006 the U.S. performed an estimated $62 billion of basic research, $75 billion of applied research, and $204 billion

of development. But...

...Both the business sector’s share of research and development as well as the federal share are in decline. More than 

half of all basic research in the U.S. is now performed at universities and colleges.

Characteristics of Successful Manufacturers and Opportunities for Action

The Hollings Manufacturing Extension Partnership Advisory Board (“MEP Board”) believes that rebuilding a strong, 

sustainable innovation and product development and deployment capacity in the U.S. will require building on what works 

for firms. Through a literature review of dozens of reports and studies and interviews with Board members, the following 

four interconnected responses to change emerged. The Advisory Board is encouraged that for each of the four major 

opportunity areas, there is an MEP or MEP Center partner related program already in place that can help foster these changes 

in new firms, or to help leading firms reach even higher levels.
5 Hollings Manufacturing Extension Partnership Advisory Board | February 2010

Innovate constantly to adapt to economic and technological changes

Only 20 percent of manufacturers can be considered truly advanced and engaged in that they: 

(a) do not panic in the face of bad economic news and look for long-term opportunities; 

(b) will not be caught flat-footed by the impending worker imbalance and shortages; (c) do not 

fear the growing influence of China, India, and other low-cost producers; and (d) do not allow 

their products to be commoditized by purchasing agents at their OEM customers.1 According 

to a survey of over 1,000 manufacturers, having a well-defined process for innovation was 

identified as the primary driver of excellence in a disciplined approach to manufacturing. This 

includes designing structured, standardized processes for generating ideas, developing them, 

and bringing them to market.2 Customer-focused innovation and mass customization were 

other innovation trends among leading manufacturers. 

Embrace green and green lean

Manufacturers have been embracing the concept of lean for many years. There are many 

variants to lean but MEP defines lean manufacturing as the establishment of a systematic 

approach to eliminating waste and creating flow throughout the whole company. Companies 

that are both green and lean are seeking to reduce their environmental impact while 

simultaneously increasing their efficiency, productivity, and profitability. An example of 

this is reduced water consumption that helps to reduce work-in-process costs, increase 

productivity and quality, and increase profits. More and more manufacturers are requesting 

that their suppliers adhere to standards of environmental quality and processes. These 

include firms such as Hewlett-Packard, Nokia, Ericsson, and Bristol-Myers-Squibb. MEP 

partners with the Environmental Protection Agency to provide the Green Suppliers Network 

that helps reduce the environmental impact of small and mid-sized manufacturers while 

simultaneously increasing those companies’ efficiency, productivity, and profitability, and 

thus their competitiveness within and across the supply chain.

Recognize and navigate opportunities in the global value chain

Manufacturers are thinking about globalization, offshoring, and the supply chain in different 

ways. Success in the global marketplace for manufacturers looks different depending on 

the sub-sector and the size of the firm. For example, some firms are finding that as expertise 

develops overseas they have even more reason to send design, development, and production 

across the world. Other manufacturers are moving production and design back to the U.S. 

as the transportation and logistics costs of supply chain management become prohibitive 

and energy costs continue to increase. Still others are expecting that future production may 

be accomplished in many smaller facilities in the U.S. and abroad to meet environmental 

concerns and react to special market demands. 

1. Streamline innovation and 

growth services targeted 

to manufacturers.

2. R&D investments should 

be targeted to where 

measures and outcomes 

indicate.

 3. Invest in clean energy 

innovation and expand the 

clean energy supply chain 

while clarifying linkages 

between green lean and 

continuous improvement 

and product development.

4. Increase awareness, 

understanding of, and 

implementation of green 

and new energy economy 

industrial standards.

5. Create market opportunities 

for global challenges. 

6. Increase efforts to help 

manufacturers navigate 

export markets and 

streamline technology 

export processes. 

7. Increase efforts to help 

manufacturers diversify 

their markets. 

8. Improve the data available 

to present the value of 

manufacturing. 
February 2010 | Hollings Manufacturing Extension Partnership Advisory Board 6

In this emerging structure, supply chains 

are evolving and becoming less linear. 

First-tier suppliers and customers are 

now involved in design, manufacturing, 

and delivery, and original equipment 

manufacturers are forming partnerships 

with firms deeper into the supply 

chain because they are attracted to 

unique technical knowledge, process, 

and production expertise.3 One way 

to maintain competitiveness in this 

environment is through collaboration 

and cluster-based partnerships between 

like firms, government, and educational 

institutions. Some manufacturers are 

morphing their product and service 

offerings. Regardless, navigating the 

complexities of the global supply chain will continue to be important to manufacturers. The National Innovation 

Marketplace (www.usinnovation.org) is an MEP initiative connecting manufacturers to one another and to innovators 

looking to take their product to market.

Develop and retain current and future talent

Despite the economic downturn and a perceived lack of jobs, data from a May 2009 survey 

of manufacturers indicate that skills shortages still exist, especially for the most profitable 

companies and for skilled production workers, scientists, and engineers.4 Evidence exists to 

suggest the lack of skilled workers extends to all levels of a manufacturing enterprise. The 

National Association of Manufacturers (“NAM”) has identified many workforce challenges 

including dissatisfaction among manufacturers with the quality of K-12 education and the lack 

of adequate and accurate career counseling as well as the negative perceptions and attitudes 

of young workers with careers and job satisfaction in manufacturing.5 Perhaps rebranding 

manufacturing as the process of moving from product innovation into product development 

and deployment (including new sales and new markets) is a way to engage young workers 

who are interested in idea generation and research and development. 

A critical partner in training the current and future workforce is the community college system. More than half of the 

community colleges (55% or approximately 1,200 institutions) offer specialized training in manufacturing skills. There are 

about 871,000 students enrolled in these courses.6

Beyond the skill gap issues is a deeper issue around developing a talent-driven firm. According to the recent report by the 

Aspen Institute, most businesses are still based on well-established command and control structures and have a hard time 

accepting systems, like those built on web-based social networking tools, that encourage bottom-up horizontal collaboration, 

even internally.7 As a result, the most exciting innovations in building talent-driven firms may well occur in smaller 

entrepreneurial firms and at the edge of large enterprises rather than their core.

9. Rebrand manufacturing 

as “product innovation, 

development, and 

deployment.”

10. Promote and expand 

career pathways.

11. Endorse and promote 

national certification and 

skill standards related to 

manufacturing.

12. Partner with federal, state, 

and local workforce system 

to proactively avert layoffs.

Source: “Clarity is Missing Link in Supply Chain,” Phred Dovorak, Wall Street Journal, 5/18/2009
7 Hollings Manufacturing Extension Partnership Advisory Board | February 2010

U.S. manufacturing is at a critical crossroads. Policymakers have a choice to establish a framework to guide 

the future of manufacturing in the U.S. and to accelerate adjustments to markets or leave its future up to 

serendipity, chance, complacency, and indifference. U.S. policymakers can help manufacturing firms change, 

innovate, move into new markets, and adapt to a constantly changing global economic environment, or operate 

under the false assumptions that the industry cannot compete and thus investment in new tools and ways of operating are 

not worth the effort. As the third largest economic sector in the U.S. economy, one that pays premium wages and creates 

more total direct and 

indirect jobs than any other 

sector, manufacturing is 

worth a focused, pro-active 

federal policy agenda. 

Without one, the risks 

to U.S. living standards, 

national security, and 

economic security are 

too great. 

Manufacturing is an 

important part of the 

nation’s competitive 

backbone and represents a 

large, complex, and diverse 

cluster of industries made 

up of individual firms 

that undertake a broad 

spectrum of activities. 

These activities extend far beyond production. They include research, design, logistics and distribution, technological services, 

back-office support, and customer care, among others. Over the past several decades, each of these activities has been 

outsourced to some degree, depending on the precise cost and quality needs of an individual firm. As a result, manufacturing 

has become a decentralized, complex web of suppliers and distributors that extends across the globe. Indeed, in this era of 

globalization, it is often hard to identify the nationality of a firm. Traditional large U.S. manufacturers have many overseas 

What makes this transition work?

Manufacturers that innovate, navigate the global 

value chain, cultivate workforce talent, and 

embrace lean and green. Public policies that help 

not hinder private sector behavior.

New ideas about processes, services, 

and products are generated constantly on 

shop floors, in research institutions, and in 

garages around the country.

That’s innovation.

What stops the process?

An inability by manufacturerers to access new 

technologies, new markets, skilled workers, and 

efficient energy practices. Disconnected public polocies 

focused too heavily on compliance and not technical 

assistance.

Producing innovative goods, and constantly improving 

the process and service components that comprise 

a product — That’s Manufacturing in the U.S. 

today.

Introduction
February 2010 | Hollings Manufacturing Extension Partnership Advisory Board 8

operations, while foreign companies like Toyota and Novartis have U.S. facilities that employ thousands of U.S. workers. 

It is this picture that makes defining U.S. manufacturing more complex than it once was, but perhaps more important too. 

Acknowledging its complexity will lead to a set of modern and relevant public policies that will increase competitiveness 

for all manufacturers, and thereby benefit U.S. workers, communities, and consumers. 

To understand the future competitive position of U.S. manufacturing, the backdrop of the past decade must be understood. 

Economic policy of the past decade was based on an expensive dollar, unsustainable trade imbalances in the goods sector, 

and delayed reaction to new global competitive realities. Going forward, global markets will demand manufactured goods 

from America as trade balances correct, but only as long as the nation’s manufacturing infrastructure is intact so that it can 

respond to market signals that will inevitably come with recovery from the current recession. 

So how does U.S. manufacturing remain competitive? An important factor will be to more clearly define a central constraint 

on the growth of the manufacturing sector – the ability to translate innovation into commercial products. Federal policy can 

help renew manufacturing in America by improving the process of transition from research and development to domestic 

product design, manufacturing, and product deployment. Unfortunately, many of today’s manufacturers suffer from a lack of 

access to new technologies, new processes, new markets, and a skilled workforce to make this transition. Many firms have 

knowledge about what needs to be done but need help in taking appropriate action. Other firms must be educated toward 

new opportunities. Current public policies can do more to assist U.S. firms at the scale needed to compete.

Over the past several decades, a disjointed set of interventions related to taxation, trade, health care, tort reform, energy, 

and others has evolved in the U.S. in place of a focused manufacturing policy. In many ways, we have allowed the law of 

unintended consequence to shape our economic competitiveness. This de-facto industrial policy has not kept pace with the 

changing nature of globalized manufacturing, and in some cases hinders manufacturers from staying competitive. But it is not 

too late to take action. The U.S. has a choice: do nothing and continue as is or establish a set of policies that help firms make 

the transition to product innovation, product development, and product deployment.

This paper seeks to set the context for a new discussion about U.S. manufacturing, one that supplements the concept of 

“manufacturing” based solely on production with that of “product innovation ,development, and deployment.” The term 

“manufacturing” is fraught with traditional biases and young workers and students see no future in it. By changing the 

foundational context, we see an opportunity to reinvigorate the conversation so that policy makers and the public get excited 

about innovation and product development and the resulting production in a way that transforms the national dialogue about 

our industrial competitiveness. 

We must consider the elements of a successful manufacturing sector, starting with innovation and moving through the 

process and transitions necessary for product design, manufacture, and product deployment. Thinking of manufacturing 

in these terms is critical to understanding where federal policy can make a difference.

This paper explores common perceptions (and misperceptions) about manufacturing, moving through the characteristics of 

successful manufacturers, and presents opportunities for action at the federal policy level. We believe that this approach 

provides valuable insight into the set of pro-active U.S. federal policies that will enable U.S. manufacturing and manufacturers 

to resume their growth, as indicated by a growth in the percentage of GDP and a concurrent improvement in the U.S. balance 

of trade in goods.
9 Hollings Manufacturing Extension Partnership Advisory Board | February 2010

Exploring the Complex Reality 

of Manufacturing Today

Recent reports and studies paint 

a diverse portrait of the health 

and vitality of the current and 

future manufacturing industry in 

the U.S., as well as its importance in the U.S. 

economy. Is it thriving or merely surviving? 

Manufacturers themselves disagree about 

the health of their industry; some paint a 

rosy picture of a leaner, stronger sector 

than ever before, while others warn that 

the industry is in dire condition. The reality 

lies somewhere in between. To help discern 

the true picture of U.S. manufacturing, the 

Hollings Manufacturing Extension Partnership 

Advisory Board (“MEP Board”) issues this 

report to increase the knowledge about the 

true state of manufacturing, the public policy 

opportunities for its sustained economic 

growth, and implications for the MEP Program.

An effective federal policy agenda must 

start with an informed perspective about 

the reality of the industry. The reality about 

manufacturing is that it is complicated – it 

is not captured in a single data point nor is it 

captured in a single caricature of impending 

demise or dramatic revival. But there is a set of realities that apply to the industry broadly. Understanding these realities 

is critical to understanding how and why federal policy action can help shape a more robust industry, and therefore more 

prosperous communities.
February 2010 | Hollings Manufacturing Extension Partnership Advisory Board 10

Is U.S Manufacturing Disappearing?

For years we have recognized and acknowledged 

the transition from a production-based economy to a 

service-based economy. Yet, even before the bumpy 

ride experienced by the financial and real estate 

sectors over the past two years, data demonstrated 

that manufacturing remains a significant part of the 

U.S. economy. However, key indicators remain mixed 

on the true condition of the industry.

Manufacturing generated $1.64 trillion worth 

of goods in 2008 – despite a recession that 

dramatically impacted the domestic automobile 

industry - and inflation-adjusted value added has 

increased by 22 percent over the past ten years. If 

U.S. manufacturing were a country in itself, it would 

represent the 8th largest economy in the world.8

Even so, manufacturing is no longer the dominant sector of the U.S. economy. However, it remains a critically important 

component. As of 2008, manufacturing represented 12 percent of GDP, which is a significant decline from nearly 30 percent 

in the early 1950’s. This is a reality of economic development - as wealth increases and real wages rise, families consume 

more services. Despite its declining share of the value of GDP, the real value or manufactured output has kept pace with the 

economy for fifty years. Total output in U.S. manufacturing reached its all time high in 2008, producing over $1.6 trillion in 

added value.9

Is Manufacturing Still Important to the U.S. Economy?

Trade data paints a troubling picture. The U.S. is simply no longer an exporting nation. As of 

October 2009, the U.S. trade deficit for all goods and services was $32.9 billion and while 

some sectors are doing better than others, it is a gloomy snapshot overall.10 For example, in 

2000 the U.S. exported $29 billion more high-tech products than we imported and by 2007 

this had turned into a $54 billion trade deficit.11

While the U.S. high-tech manufacturing sector is still relatively strong, it ceased being the 

world leader in high-technology production in 2003 when overtaken by China. During the 

1990s, U.S. high-technology industries (communications equipment, computers and office 

machinery, pharmaceuticals, scientific instruments, and aerospace) accounted for about 

20 percent of the world’s high-technology exports, approximately twice the level of all 

other U.S. manufacturing industries. Starting in the late 1990s, the U.S. world export share 

declined continuously across all five high-technology manufacturing industries, dropping 

to an average of 12 percent of the world’s exports in 2005. Losses in communications 

A survey of 1,000 Americans 

in 2009 indicated that 82% of 

respondents thought manufacturing 

important to U.S. economic 

prosperity, and identified it as the 

domestic industry most important 

to the U.S. in helping maintain 

a strong national economy. 

—Public View of Manufacturing, Deloitte 

and the Manufacturing Institute, June 2009
11 Hollings Manufacturing Extension Partnership Advisory Board | February 2010

equipment, office machinery, and 

computers, which collectively 

account for nearly 60 percent of 

U.S. high-technology exports, 

primarily drove the overall 

decline.12

Despite export losses, the 

U.S. still has the single largest 

share of high-technology valueadded produced in the world 

(35 percent in 2005). This is 

an economic sector where the 

rate of growth in world gross 

revenue in high technology 

manufacturing has been double 

that of non-high technology 

manufacturing sectors over 

the past 20 years. The U.S. 

is ranked first in value-added 

world share in three of five 

high-technology industries 

(scientific instruments, aerospace, 

and pharmaceuticals) and 

is ranked second in the 

other two (communications 

equipment, office machinery and 

computers).13

There are a handful of industries 

that account for a large share 

of exports. These include: 

computers and electronics, transportation equipment (including aerospace), chemicals, non-electrical machinery, 

primary metals, petroleum and coal, apparel and accessories, electrical equipment, fabricated metals, food and 

kindred, plastics and rubber, and leather.

As of 2008, the only two significant industries in which the U.S. has a trade advantage are chemicals and 

non-passenger-vehicle transportation equipment (including aerospace).

Despite all of this, the sky is not falling. There are several trade indicators that reflect a positive light on the state 

of U.S. manufacturing. According to the recently released Facts about Modern Manufacturing: 8th Edition by the NAM:14

•	 The U.S. share of global manufacturing value added is holding steady at a little less than 25 percent...but China’s

share is now 15 percent and gaining rapidly.
February 2010 | Hollings Manufacturing Extension Partnership Advisory Board 12

•	 Among all U.S. exports,

manufactured products are the 

most dominant, accounting for 

57 percent of total value. Services 

are at 30 percent, agriculture at 

6 percent, and all others at 7 percent. 

•	 Traded industries have a very positive

impact on overall wages. Employees 

in the top-third of the most trade 

intensive industries (where combined 

exports and imports amount to at 

least 70 percent of their domestic 

industrial output) earn an annual 

total compensation package of about 

$86,000, 47 percent more than in the

least-third trade engaged sectors 

of manufacturing ($58,614). Those

in the middle-third trade engaged 

sectors earn $67,963.

•	 The U.S. attracts the most foreign

direct investment of any nation in 

the world as investors continue to be attracted by its large and open market, the quality of its infrastructure, high income 

levels and access to cutting-edge technology and research. U.S. manufacturing affiliates of foreign firms now employ 

about 2 million manufacturing workers and sell about $1.1 trillion in goods each year (as of 2006). Foreign firms now

employ about 1 in 12 U.S. manufacturing workers.

There is a business case for investing in manufacturing and in manufacturers. Despite the current trade imbalance, U.S. 

manufacturers still exported $86.8 billion dollars in goods during August 2009. The U.S. remains very competitive in many

industries and there are opportunities for owners and investors as well as policy makers to continue building on the strengths 

of manufacturing to help revitalize the U.S. economy. There is an economic development case to be made as well. U.S. 

manufacturing is often perceived as the domain of some of the global economy’s largest firms such as Boeing, Exxon, 

General Electric, IBM, Microsoft, Philip Morris, and numerous others. In fact, small and mediumsized businesses are the backbone of the industry. 

According to 2007 data from the U.S. Census Bureau, approximately 177,000 manufacturing establishments have nine 

employees or less, and approximately 119,000 establishments have four employees or less. In total, these account for 

53 percent and 36 percent of all manufacturing establishments respectively. Another 31 percent (101,000) of manufacturing 

establishments have between 10 and 49 employees. Despite perceptions that the global economy belongs to only the 

biggest players, these establishments penetrate the global marketplace in many ways. The share of small and medium-sized 

manufacturers reporting that exports account for more than one-quarter of their sales more than tripled from 3.8 percent 

during 2001 to 12.8 percent during 2008.15 Tomorrow’s large companies are likely be built from today’s smaller companies.

Manufacturing Establishment by Size

Number of Employees No. of Mfg 

Establishments

% of Total

ALL 331.335 100.0%

1-4 119,182 36.0%

5-9 57,779 17.4%

10-19 51,422 15.5%

20-49 50,094 15.1%

50-99 24,359 7.4%

100-249 18,943 5.7%

250-499 6,172 1.9%

500-999 2,384 0.7%

1000 or more 1,020 0.3%
13 Hollings Manufacturing Extension Partnership Advisory Board | February 2010

Are There High Quality Manufacturing Jobs Left in the U.S.?

Employment in manufacturing as a share of total U.S. employment has fallen from about one in three U.S. jobs in 1950 to 

about one in ten jobs today. The September 2009 manufacturing employment figure of 11.7 million jobs represents a decline 

of nearly 2 million jobs since the recession began in December 2007, a drop of 8 million jobs since peaking in 1979 (19.4 

million jobs) and is at its lowest level since 1940 (9.8 million jobs).16

Some of the decline can be explained by the way the data is calculated. For example, many functions previously done 

within manufacturing companies and previously counted as manufacturing jobs – packaging, transportation, professional 

services, publishing, warehousing – are now counted outside of the manufacturing sector as services. Yet much of it can be 

accounted for by structural changes in manufacturing, including technological advances, increased productivity and production 

efficiencies, and globalization. 

Despite these job losses manufacturing as an industry accounted 

for 18.6 million jobs in 2009 (11.8 direct jobs, and 6.8 indirect jobs 

in industries like transportation and warehousing, and professional, 

business, and financial services).17 Manufacturing still has a greater 

secondary economic impact (i.e., multiplier effect) than any other 

sector of the economy, with an estimated additional $1.40 in output

from other sectors being generated for every $1.00 in final sales

of manufactured products.18 Only information services; agriculture, 

forestry, fishing, and hunting; and construction come close at slightly 

over $1.00 each. Retail trade ($0.58) and wholesale trade ($0.55)

sectors have the lowest impact per dollar of economic activity.

Manufacturing in the U.S. also offers premium jobs. Manufacturers 

pay 9 percent higher in wages and benefits than the entire economy. 

On average, U.S. manufacturing jobs are more likely to provide health, 

pension, and other benefits compared to other sectors. Employers’ 

ability to pay premium wages to workers is due in large part to their 

ability to do more with less - productivity is high, and production and 

distribution processes have been streamlined. Declining employment 

rates clearly show that this streamlining has included workers. 

Unit labor costs of U.S. manufacturers have declined by 40 percent relative to the average unit labor cost of fourteen other 

countries that are major competitors in global markets.19

It is no surprise that the skills and education needed by workers in manufacturing have also dramatically shifted. In 1973, 

over half of manufacturing production workers had not finished high school. By 2001, only 21 percent lacked a high school 

degree. Over the same period, the share of production workers with some post-secondary education rose from 8 percent to 

over 30 percent.20 When non-production workers (i.e. sales, R&D) are included, the high level of skills and education needed 

is more evident, with only 12 percent of all manufacturing workers holding less than a high school diploma and over 

50 percent having some post-secondary education in 2008.21 Furthermore, 17 percent of all jobs in science and engineering 

occupations are found in the manufacturing sector, behind only the professional, scientific, and technical services industry.22
February 2010 | Hollings Manufacturing Extension Partnership Advisory Board 14

These latter industries include many jobs that 

are important to and often functionally integrated 

within manufacturing, including: engineering, 

drafting, research and development, industrial 

design, computer systems, and environmental 

and energy services. In other words, large parts 

of the U.S. technology economy may really be 

the manufacturing economy. 

Very little of the “old manufacturing” sector - 

as typified by long production runs of 

standardized parts and products - exists today. 

New manufacturing is represented by firms 

dependent on constant innovation and adoption 

of new technologies that require higher skilled 

workers. According to a recent survey of leading 

manufacturers, new product innovation and a highskilled, flexible workforce were identified as the 

two most important factors to business success.22

Product innovation and a flexible workforce 

represent the necessary elements to transition from 

innovation to product development and deployment. 

According to the same survey, 51 percent of the 

workforce demand in manufacturing is currently 

for skilled production workers, 46 percent for scientists and engineers, and only 7 percent for unskilled production workers. 

This need for skilled production workers is often linked with an increased emphasis on science, technology, engineering, and 

math related skills. Yet the U.S. lags in math and science scores among young people compared to other advanced economies 

such as Germany, Japan, and the United Kingdom, as well as developing economies such as those in Hungary and Poland.24

This means that it may become more challenging for manufacturers to find new workers with the appropriate levels of skills 

and education, at the same time they are challenged to advance their current workers in a way that encourages innovation in 

process, product, and markets. Innovation and a skilled workforce are intrinsically linked. 

Can Innovation Alone Rebuild the U.S. Economy?

Many recent papers and reports about manufacturing have emphasized the need to increase federal investment in basic and 

applied research. Data seems to indicate such an increase is warranted. Consider these trends in research and development:25

•	 U.S. research and development expenditures (in inflation-adjusted terms) have increased by only 2.5 percent in average

annual change over the past four years.

•	 In 2006 the U.S. performed an estimated $62 billion of basic research, $75 billion of applied research, and $204 billion

of development.

Source: Bureau of Labor Statistics, Current Population Survey
15 Hollings Manufacturing Extension Partnership Advisory Board | February 2010

•	 Universities and colleges

historically have been the 

largest performers of basic 

research in the U.S. and now 

account for more than half 

(56 percent) of the nation’s

basic research being 

performed. 

•	 The business sector accounts

for the largest share of R&D 

spending in the U.S. and 

provides most of the nation’s

R&D funding, but the business 

sector’s share of R&D is

decreasing (from a peak

of 75 percent in 2000 to

71 percent in 2006).

•	 The federal share of R&D spending first fell below 50 percent in 1979 and dropped to a low of 25 percent in 2000.

•	 60 percent of the federal R&D budget in FY 2008 is for defense. There is an important innovation role that is played by

military R&D, particularly as it relates to the technology transfer of defense technology into commercial products. 

The declining share of federal spending is one data point in a complex R&D and innovation story. A recent article in the 

Harvard Business Review noted that “over recent years and past decades the innovation infrastructure that once drove 

American ingenuity has slowly dissipated. As low-wage competitor countries become more highly skilled, with more 

sophisticated facilities for not only production, but research and development, some manufacturers in the U.S. worry 

that our main export is innovation itself, not innovative products.”26

Clearly there are roles to play for the federal government, business and industry, and higher education in funding and 

performing research and development and in rebuilding and readying the collective “industrial commons”.27 This industrial 

commons is the collective research and development, engineering, and manufacturing capabilities that sustain innovation. 

The commons serves as the foundation for innovation and competitiveness that includes R&D know-how, advanced process 

development and engineering skills, and manufacturing competencies related to specific technologies. Such resources can 

be embedded in a large number of companies and universities as well as the skills, and equipment related to the development 

of products through human capital.

Increased federal investment in R&D alone is not sufficient. Nor is the increase of R&D in private companies and universities, 

or increased emphasis on science and engineering curriculum in secondary and post-secondary education. It is a combination 

of all of these things and more, including but not limited to innovation, multi-firm collaboration, and infrastructure that will 

maintain the U.S. standing as the world’s innovation leader.
February 2010 | Hollings Manufacturing Extension Partnership Advisory Board 16

Can Firms Simply Follow the Market to Stay Competitive?

Markets matter. There is a clear and empirical link between the value of the dollar and the export of goods. As the value 

of the dollar increases relative to other currencies, the price of our goods to customers in other nations increases, and thus 

they buy less and exports decrease. As the value of the dollar decreases relative to other currencies, the price of our goods 

for consumers in other nations decreases, they purchase more, our exports increase, and U.S. goods and services make up a 

greater share of the global marketplace. 

Given the current state of our global economy, the value of the dollar is expected to decrease. This is good news for 

manufacturers as the declining dollar will likely result in an increase in exports. Additionally, to take advantage of this 

increased demand for U.S. goods, more goods that might otherwise have been imported will likely be produced domestically 

(a classic case of import substitution). 

Firms are responsible for driving the market, not just responding to it, and as the 

value of the dollar declines, firms must recognize the opportunity to be strategic 

and take advantage of the double benefit they will face – expanded opportunities 

in export markets and expanded opportunities created by import substitution. 

However, opportunities exist to fill market gaps. For example, with the contraction, 

restructuring, and impaired capital of the finance sector of the economy, there is a 

gap in access to capital for manufacturers. 

Many small manufacturers, even those with orders that are relatively healthy, 

have been unable to finance growth or execute business and product 

diversification plans in the current environment due to the prevailing underwriting 

practices, devalued assets, and what seems to be a perceived transitional risk 

associated with transforming away from legacy products and practices and 

investing in new products. Many lenders have enhanced this risk aversion in the 

current economic climate. However, there are actions that the federal government 

can do to respond to these unusual conditions in the finance markets that are 

threatening the manufacturing sector. Current financial policy efforts operate on the assumption that by decreasing the cost 

of capital to banks, banks will thus increase lending activity to small businesses. Decreasing the cost of financing may create 

increased spreads for lenders and make them healthier, but will not necessarily induce them to make any new loans when the 

bank cannot sustain loan losses due to its impaired capital or increased regulatory scrutiny. 

The efforts unfortunately do not address the need to offset from the lenders perspective financial deficiencies of borrowers 

brought about by asset devaluation and what the banks see as transitional risk to cash flows as companies attempt to 

diversify to other products. Access to capital can only be significantly improved through targeted initiatives that mitigate risk 

taking or loan losses by lenders or by some kind of loan enhancement programs which directly reduce specific risks on a loan 

by loan basis. 
17 Hollings Manufacturing Extension Partnership Advisory Board | February 2010

Market opportunities created by currency fluctuations are a partial solution to the revitalization of the manufacturing sector; 

access to capital quite another. Through the course of this paper we promote federal policy interventions when it can be 

helpful, but recognize the need for business to lead the way. The solutions likely lie in the public and private sector working 

together in a creative and collaborative effort. 

Summary – Complex Realities

Manufacturers disagree on the health of their industry - some paint a rosy picture of a leaner, stronger sector than ever 

before, while others warn that the industry is in dire condition. The reality lies somewhere in between. An effective federal 

policy agenda must start with an informed perspective about the reality of the industry. The reality about manufacturing is 

that it is complicated – it is not captured in a single data point nor is it captured in a single picture of impending demise 

or dramatic revival. But there is a set of realities that apply to the industry broadly. Understanding these realities is critical 

to understanding how and why federal policy action can help shape a more vital industry, and therefore more prosperous 

communities. 

Consider the following illustrative points:

•	 Manufacturing remains a significant part of the U.S. economy, generating $1.64 trillion worth of goods in 2008.

If U.S. manufacturing were a country in itself, it would represent the 8th largest economy in the world. But...

...Manufacturing is no longer the dominant sector of the U.S. economy but it remains a critically important component. 

As of 2008, it represented 12 percent of GDP, down from nearly 30 percent in the early 1950’s.

•	 The U.S. share of global manufacturing value added is holding steady and among all U.S. exports, manufactured products

dominate, accounting for 57 percent of total value. But....

	 ...The U.S. trade deficit for high-tech products in 2007 was $54 billion, nearly doubling the $29 billion deficit of 2000.

•	 Manufacturing pays 9 percent higher in wages and benefits than the overall economy, and nearly one in five jobs in

science and engineering are in the manufacturing sector (2nd highest). But...

...Employment in manufacturing as a share of total U.S. employment has fallen from about one in three jobs in 1950 to 

one in ten jobs today. 

•	 In 2006 the U.S. performed an estimated $62 billion of basic research, $75 billion of applied research, and $204 billion

of development. But...

...Both the business sector’s share of research and development as well as the federal share are in decline. More than 

half of all basic research in the U.S. is now performed at universities and colleges.
February 2010 | Hollings Manufacturing Extension Partnership Advisory Board 18

Introduction and Purpose

J

effrey Immelt of General Electric offers one take on how to re-build a thriving manufacturing sector, providing a set 

of guideposts for public policy makers to consider. Other publications list numerous factors such as cost and resource 

management, product development, flexibility, service offerings, reliability, decisive leadership, environmental 

sustainability, and the ability to look beyond the competitive threat from other nations such as China.

Rebuilding a strong, sustainable product development and deployment capacity in the U.S. 

will require building on what works for firms. Through a literature review of dozens of reports 

and studies, and interviews with MEP Advisory Board members (a majority of whom are 

manufacturers), the following four interconnected responses to inevitable change emerged. For 

each of these, a set of opportunities for action through public policy also came into clear focus 

when viewed within the context of contemporary manufacturing. 

The ability of firms to fully embrace each of these four strategies is mixed. In fact, a recent study 

analyzed how well America’s manufacturers are prepared to meet the challenges of the new 

marketplace.28 The results illustrate that in the face of a deep recession many manufacturers 

struggle just to survive, let alone innovate and grow. Large firms may better understand the need 

for change and have more tools to adapt, while small and medium-sized firms often need help to 

identify and navigate the pathway to success. Even so, small and medium-sized firms tend to be 

very agile and once they see their path to success they can be flexible in getting there. 

While there are many factors that contribute to a manufacturing firm’s success, we believe 

these four are most critical. A thumbnail sketch of why the characteristic is important and the 

challenges that often prevent manufacturing firms from being world-class is provided for each.

Characteristics of Successful Manufacturers

We should create an American 

Industrial Renewal by moving 

on five fronts: invest in new 

technology; win where it counts 

in clean energy and affordable 

health care; become a country 

that is good at manufacturing and 

exports; embrace public-private 

partnerships; and promote leaders 

who are also good citizens.

—Jeffrey Immelt, CEO of General Electric, 

excerpted from July 2009 speech to Detroit 

Economic Club29
19 Hollings Manufacturing Extension Partnership Advisory Board | February 2010

Innovate Constantly to Adapt to Economic and Technological Changes

Leading firms continue to innovate their way through economic and technological shocks and disruptions, and even use them 

to their advantage. Shocks are generally thought of as external impacts to the firm, such as the current economic conditions, 

the rising cost of health care, or rising energy costs. Disruptions tend to be internal to 

the firm, such as the deployment of new technologies or processes. 

In the context of the current financial crisis, for example, some businesses are finding 

ways to deal with this external shock by managing just-in-time inventory and subcontracting the making of tools to be used in the manufacturing process in order to stay 

lean and absorb the financial crunch. Shocks are not always negative, and depending 

on the industry they can have wide-scale positive impact. The current administration’s 

push for energy efficiency makes this a good time, for example, to invest in and deploy 

energy efficient products and processes. While some manufacturers will see energy 

efficiency as a disruption to the way they do business, others will manage this change so 

that the business comes out in an improved competitive position. Nanotechnology and 

Stages of Competitive Manufacturers

from The State of Manufacturing 2009, Enterprise Minnesota

Truly Advanced – 5% of employers are aware of the marketplace and are actively engaged in a continual process of 

improvement that will enable them to compete anywhere, with anyone, within any economic environment. 

Engaged – 15% of employers know what they have to do. They have begun the process, sometimes in fits and starts, 

but are committed to becoming truly advanced.

The top 20 percent consists of “truly advanced” and “engaged” manufacturers who: 

(a) do not panic in the face of bad economic news and look for long-term opportunities; 

(b) will not be caught flat-footed by the impending worker imbalance and shortages; 

(c) do not fear the growing influence of China, India, and other low-cost producers; and

(d) do not allow their products to be commoditized by purchasing agents at their OEM customers.

Earliest Stages – 50% of employers are in the “earliest stages” of growth. The upper end of this group really knows 

that they must do certain things to be more engaged, but in general, they struggle to adapt to the vagaries of the 

marketplace and the economy, but they end up reacting to changes in their markets on someone else’s terms rather than 

anticipating them on their own. As you move down this hierarchy, we find companies that let the urgent dead-lines of 

the day-to-day operations get in the way of strategic improvements and longer-term planning.

Disengaged – 30% of employers are surviving, but they aren’t adding the kind of sales growth and profitability that 

enables them to invest in their businesses to take them into the next generation. They live off of yesterday. In a good 

economy they are standing still. And sadly, in this challenging economy, many of them are going to disappear. 

I equate growth with 

survival. If my company 

is not growing, it will 

not survive. If I’m not 

innovating, I’m not driving 

growth.

—Mark Rice, President, Maritime 

Applied Physics and MEP Advisory 

Board Member
February 2010 | Hollings Manufacturing Extension Partnership Advisory Board 20

3-D simulation are two powerful technologies shaping manufacturing today, but for some firms these represent a significant 

disruption to current products and processes. For strong firms, these disruptions will be turned into opportunities. For others, 

the pace of change will be too rapid and will be considered a threat. 

Additionally, in a recent survey of over 1,000 manufacturing firms conducted by the NAM, having a well-defined process 

for innovation was identified as the primary driver of excellence in a disciplined approach to manufacturing.30 This includes 

designing structured, standardized processes for generating ideas, developing them, and bringing them to market. Leading 

manufacturers believe that process discipline is integral to their success. But this process 

must be able to weather and adapt to change. Entire U.S. industries have been unable to 

adapt to recent shocks and disruptions caused by the global marketplace and others are 

under serious threat. Semiconductors, electronic displays, and advanced materials are just a 

few of several industries with products already lost or under threat of being lost. Appendix A 

provides a list of industries and products that fall into this category.

There are also strong indicators that more and more U.S. firms are voluntarily sharing 

their research, development, design, and patent information with foreign countries and 

companies as part of business agreements. Recent data from the National Science Board 

indicates that in 2005, U.S. companies had conducted over $6 billion in trade with unaffiliated

companies in receipts and payments.31 This consists of U.S. trade in industrial processes, 

including patents and trade secrets, used in the production of goods. While this figure 

provides an indication of the strength in U.S. research and development capabilities, 

our willingness to outsource our nation’s leadership in research and development 

by producing offshore, raises questions about industrial trade and its long-term impacts 

on our ability to be innovation leaders. 

Throughout industrial history there have been examples of production being sent to nations 

with lower production costs. This is good for the economy of other countries and for American consumers due to the lower 

cost of the product. However, the U.S. based company is in danger of losing control over its technology; tacit knowledge and 

process innovations will not accrue to the original innovating company, and eventually the innovating company will lose the 

product. Artful foreign competitors will eventually establish their own brands that will be positioned as the industry leader 

in products based on successor technologies. This happened in the color television industry and is occurring again in many 

segments of the consumer and electronics industry (see Appendix A).

Finally, the need for firms to consider the green marketplace is expanding. As evidenced in the subsequent section, the nation 

is at a tipping point in its conversation about environmentally friendly products and production processes. The “green wave” 

is an example of the need for firms to be ready to adapt to and innovate through change. The next section looks at green as 

a process improvement. But it is important to also realize the potential for innovating new products that are environmentally 

friendly and help to minimize the impact on the environment. New products that help reduce or alleviate our nation’s carbon 

footprint will be in great demand in the years to come and present a new market opportunity for the most innovative of 

manufacturers.

Responses to Change 

by Successful Manufacturers

1. Innovate constantly to adapt to 

economic and technological changes; 

2. Embrace green and green lean; 

3. Recognize and navigate opportunities 

in the global value chain; and 

4. Develop and retain current and future 

talent.
21 Hollings Manufacturing Extension Partnership Advisory Board | February 2010

Embrace Green and Green Lean

When it comes to issues of green and “sustainability” many manufacturers are aware of the perceived importance but have 

yet to make a connection with their balance sheets. Despite the need to find alternative sources of energy as well as react to 

a more environmentally conscious consumer market, many manufacturers have been slow to respond:

•	 The industrial sector (including mining, agriculture, fishing, and manufacturing) accounts for 31 percent of total U.S. energy

consumption, the largest share of any sector including transportation (28 percent), residential (22 percent), and commercial 

(19 percent).33

•	 Manufacturing accounts for two-thirds of the industrial sector’s energy consumption. Natural gas and traditional electricity

accounts for most of the manufacturing sector’s energy sources.34

•	 While 47 percent of manufacturers reported average progress or better towards world-class green and sustainability

measurement benchmarks in a recent survey, only 13 percent described their green measurement systems reviews as 

including regular monitoring or transparency.35

•	 Only one-third of the manufacturers surveyed report having more than three-quarters of their sales volume from products

that are recyclable and/or reusable.36

Yet, even with this apparently slow response on the part of industry, green signals continue to be generated by our political, 

economic, and social discourse, particularly given the American Recovery and Reinvestment Act’s (ARRA) emphasis on 

renewable energy as an economic and workforce driver. This emphasis on green has proven to be complementary to 

Green Headlines35

(from State of Green Business, 2009 Greenbiz.com)

•	 General Electric said it plans to cut freshwater use 20 percent in absolute terms through reuse efficiencies in

its commercial and manufacturing processes.

•	 Anheuser-Busch announced that its companywide water use increased 2.4 percent over five years while its

beverage production climbed about 2 percent. By adopting a number of efficiency efforts, the brewer managed 

to reduce the amount of water used to make beer and keep its water use flat.

•	 72 percent of facility managers surveyed by Johnson Controls said they pay more attention to energy efficiency,

up to 10 percent from the year before.

•	 When asked what their number one initiative was for 2009 nearly 40 percent of companies surveyed answered

“reducing energy use through efficiency.” In second place: “making sure that green stays on the agenda.”

•	 Product stewardship is increasing. Dell said it planned to eliminate 20 million pounds of packaging worldwide

within the next four years, a move expected to save about $8 million.

•	 Hewlett-Packard introduced a notebook PC in a recycled laptop bag with 97 percent less packaging than

typical laptops.

•	 Carbon reduction is becoming a business imperative. Companies such as Alcoa and Merck are just two examples

of those that have variously promised to slash emissions, increase reporting, or adapt a set of climate principles.
February 2010 | Hollings Manufacturing Extension Partnership Advisory Board 22

traditional lean concepts deployed by many 

competitive manufacturers, and provides 

opportunities to marry the two in both 

concept and implementation to provide 

important production cost savings.

Manufacturers have been embracing the 

concept of lean for many years. There 

are many variants of the definition but 

MEP defines lean manufacturing as the 

establishment of a systematic approach to 

eliminating waste (such as overproduction) 

and creating flow throughout the whole 

company. Lean also helps develop and 

implement a long-term plan to streamline 

operations for success. The benefits of 

lean include reduced cycle time, reduced 

inventory, reduced work-in-process costs, 

increased capacity, improved lead time, 

increased productivity, improved quality, and increased profits. 

Marrying lean with green process concepts opens up additional opportunities to help improve the balance sheet. 

Companies that embrace lean and green production processes are seeking to reduce their environmental impact while 

simultaneously increasing their efficiency, productivity, and profitability. Typically this is being done through reduction 

of total energy use, waste sent to landfills, greenhouse gas emissions, and water consumption, among other negative 

environmental impacts. This approach aligns with lean concepts to reduce work-in-process costs, increase productivity 

and quality, and increase profits. 

While some manufacturers remain skeptical of the words “sustainability” and “green,” there is a clear indication that efforts 

to become more energy efficient and better environmental stewards have reached a tipping point amongst manufacturers. 

While many manufacturers understand what needs to be done, many do not and require assistance in the identification and 

navigation of the path forward. Often times, introducing lean green production processes is not done alone but in partnership 

with local, state, and federal government resources, and utilities. E3 (Economy, Energy, and the Environment) is a model that 

combines the resources of five federal agencies, working with local government and utilities, to enhance sustainability and 

competitiveness in local and regional economies and to spur job growth and innovation. Federal and local resources are being 

combined to conduct in-depth front-end assessments and gap analyses of company manufacturing processes, the results 

of which are used to develop comprehensive improvement plans on behalf of and in collaboration with the participating 

communities. The federal agencies involved in this effort are:

•	 MEP (Department of Commerce)

•	 Pollution Prevention Program (Environmental Protection Agency)

•	 Industrial Technologies Program (Department of Energy)

Green Suppliers Network 

The Green Suppliers Network (“GSN”) is an innovative collaboration between the 

Environmental Protection Agency, MEP, state and local government, and industry that 

focuses on the dual challenge of reducing the negative environmental impact of small 

and mid-sized manufacturing suppliers while simultaneously increasing those companies’ 

efficiency, productivity, and profitability. GSN reviewers employ lean and clean technologies, 

which concentrate on the root causes of waste of one process line in a facility and provide 

a framework for achieving specific, measurable, environmental business objectives. Among 

other things companies learn to establish systems to use energy more efficiently and 

improve the use and selection of more environmentally friendly raw materials 

(www.greensuppliers.gov).

When American Electric Power (“AEP”) joined the Green Suppliers Network in 2007, they 

had a goal to enlist five non-fuel suppliers to participate in the first year. By the end of the 

year ten suppliers were on board. Doing business with AEP now means that suppliers are 

subject to greater scrutiny of their environmental performance. When AEP issues Requests 

for Proposals, suppliers are asked about their environmental practices to determine if they 

align with AEP’s vision for sustainability (www.AEP.com/cr).
23 Hollings Manufacturing Extension Partnership Advisory Board | February 2010

•	 Employment and Training Administration (Department of Labor)

•	 Small Business Development Centers (Small Business Administration)

These agencies work with local partners, utilities, and manufacturers to sustain the manufacturing infrastructure of a region, 

make manufacturing plants more energy efficient and cost effective, reduce the environmental impact of participants, and 

improve the economy by creating and retaining jobs. 

E3 is an example of how the behavior of one firm can positively impact its 

community. One firm’s behavior can also impact the behavior of other firms. 

Most manufacturers agree that greening the supply chain is the next evolution 

in achieving improved energy efficiency. From materials to components to 

design, finished product, and end use, many original equipment manufacturers 

are requesting that their suppliers adhere to standards of environmental 

quality and processes. These include Hewlett-Packard, Nokia, Ericsson, and 

Bristol-Myers Squibb. These developments have seen the supply chain adapt 

from one of compliance to OEM environmental mandates to one of using green 

lean to create value or lower costs. Suppliers once viewed environmental 

quality as something thrust upon them, but are beginning to understand that 

by becoming lean and green they are more economically competitive and 

thus more likely to survive in a competitive supply chain where all suppliers 

are now adhering to environmental quality control. In the new value chain 

model of green, socially responsible suppliers will be the most successful. A 

significant challenge over the next several years will be helping more and more 

companies make the transition to green lean and fostering growth within the 

growing green economy. 

Recognize and Navigate Opportunity in the Global Value Chain

Manufacturers think about globalization, offshoring, and the supply chain in different ways. Success in the global marketplace 

for manufacturers looks different depending on the sub-sector and the size of the firm. Appendix B highlights the top import 

and export trading partners for the U.S. by high technology sector.

For example, some firms are finding that as expertise develops overseas they have even more reason to send design, 

development, and production across the world. Other manufacturers are moving production and design back to the U.S. as 

transportation and logistics costs of supply chain management become prohibitive and energy costs continue to increase. 

Of these, some cite quality concerns for changing their supply chain. For example, Houston-based Farouk Systems is moving 

all of its production of hand-held appliances from China to Houston in part to be closer to its customers as well as to better 

control quality and inventory and to fight counterfeiting. Owner Farouk Shami says the Houston-made hair irons will cost 

about $2.50 more than those produced in China but he plans to absorb the cost without raising the price.37 Even the U.S. 

military is reconsidering where they get their supplies. In 2003 the U.S. Department of Defense and the National Security 

Agency created the “trusted sources” program to make sure they are buying parts that will not fail because they have been 

(intentionally or unintentionally) infected with inferior or counterfeit parts.38
February 2010 | Hollings Manufacturing Extension Partnership Advisory Board 24

Despite these activities there 

is not yet a clear link for many 

sectors between supply chain 

management and the global 

value chain. Recent survey data 

shows that:39

•	 Sixty-eight percent of

manufacturers rank supplychain management and 

collaboration as key to their 

organization’s success over 

the next five years.

•	 Sixty-six percent identify

their organization’s progress 

towards world-class supplychain management and 

collaboration as average or better.

•	 Sixty-three percent describe their end-to-end supply chain’s ability to respond to unexpected customer demand for existing

products as “efficient” or “real-time.”

•	 Sixty-four percent rate the importance of global engagement to their organization’s success over the next five years as

average importance or higher. Forty-six percent rate it as above average importance or higher.

•	 Twenty-five percent rank their organization’s progress towards becoming a world-class global player as good or better.

•	 Only eight percent have increased their percentage of dollar volume of sales outside the U.S. by fifty-one percent or higher;

only twelve percent operate or partner in 6 or more countries outside the U.S.; and only seventeen percent have sales and/

or distribution facilities in 6 or more countries outside the U.S.

According to Dr. Irene Petrick of the Enterprise Informatics and Integration Center at Penn State University, globalization in 

the context of an individual firm can range from multiple operations in globally distributed locations (global production) to 

selling to customers in multiple locations (global sales and distribution) to linkages and collaborations with other firms or 

organizations in multiple geographic locations (global supply chains). Dr. Petrick believes that for many small and mediumsized enterprises (SMEs) the first option is not feasible and the latter two often confound small suppliers that frequently lack 

a strategic long-term commitment to globalization. She recommends a niche market approach to globalization where the 

SME commits to learning from mistakes and incorporating that learning into a long-term commitment that can benefit 

subsequent endeavors.40

Still other manufacturers expect that future production may be accomplished in many smaller facilities in the U.S. and 

abroad to meet environmental concerns and react to local market demands. In this model, manufacturers may produce the 

same product in smaller lots in many smaller production facilities that are located closer to the specific markets they serve 

The Shift from Supply Chain to Value Stream

Excerpt from Supply Chain Globalization, by Dr. Irene Petrick, Manufacturing a Better Future for America, 2009.

OEMs that lead traditional supply chains are now being challenged by networks of firms competing 

in a coordinated and collaborative fashion. Companies coordinating their activities in a “value stream” 

tend to be less linearly organized. Interactions between several firms are orchestrated to achieve a 

common goal. Thus, communication, collaboration and coordination are not tightly tied to the tiered 

structure of a supply chain. This is important for SMEs to understand as they seek to remain relevant. 

It suggests new opportunities for interaction with other companies in the network based on adding 

value rather than strictly on their position in a tiered arrangement.

Under this emerging structure, the buyer must understand that first-tier suppliers and customers 

are now involved in design, manufacturing, and delivery. Logistics networks are needed to complete 

the integrated supply chain management cycle. These linkages were most often between Tier 1 

(suppliers) and OEM firms, but there is increasing evidence that a growing number of OEMs are forming 

partnerships with firms deeper in the lower tiers. The OEMs are attracted to companies that possess 

unique technical knowledge, process and production expertise.
25 Hollings Manufacturing Extension Partnership Advisory Board | February 2010

(such as China, South America, or the southern U.S.) in order to both meet 

environmental and transportation concerns as well as to produce products 

that meet local market demands and differing standards for labeling, 

safety, and other factors. 

Regardless, understanding the complexities of a global value chain can 

prove difficult, and no single formula is right for all firms or sectors, or even 

for the same sector over time. During economic disruptions (such as the 

current recession) firms often are out of synch as they try to understand 

where different parts of a large supply chain may be cutting back or 

gearing up. Consider the “Life of a DVD Player” supply chain graphic 

as an example of a complex, global value chain.

Regardless of whether a manufacturer is becoming more localized or more 

globalized, global supply chains remain a key characteristic of today’s 

manufacturing landscape. This is true for large multi-national firms that 

have been negotiating the global marketplace for years and for small firms 

with limited global activity. 

Making it all work smoothly requires strong relationships, strong 

coordination, and a certain amount of risk-taking and trust. The lead 

partner in the value chain may not be based on size and revenue but 

rather on intellectual property, process innovations, or product innovation. 

Or there may not be a lead partner at all, but rather a partnership of 

interconnected companies which understands that working better together 

will increase the economic competitiveness of all the partners involved.

One way in which manufacturers increase their competitiveness in the 

global value chain is to collaborate with others. This may include other 

(competitor) businesses, higher education, and government. Collaboration 

to increase regional competitiveness of firms is often referred to as a 

cluster strategy: networks of firms related by common suppliers, shared 

markets, labor pools or infrastructure that leverage interactions (including 

competition) to their mutual advantage. Manufacturing clusters often cited are the semi-conductor cluster in the Austin, TX 

area or medical devices in Jacksonville, FL or Minneapolis, MN. For manufacturing, the connection backward to raw material 

producers and intermediate product suppliers is not a straight line, but involves orchestrating a complex web of financial 

management, transportation and logistics, research and development, adequately skilled labor, appropriate technology, and 

domestic and international regulations. 

Connecting firms into competitive cluster strategies is an important role played by government, industry associations, 

economic development agencies, and others within a state or region. A recent report from the Center for American Progress 

identified the most important characteristics to a successful regional cluster initiative as: (1) a pro-innovation environment 

including the presence of research institutions and committed government, and research and business leadership;

National Innovation 

Marketplace 

www.usainnovation.org

The MEP is connecting manufacturers to 

technology and business opportunities 

resulting in new markets and new 

products that are necessary for success 

in the global marketplace. In partnership 

with other organizations, the MEP 

program is developing the National 

Innovation Marketplace (NIM) to facilitate 

connections between technology 

requestors and potential suppliers. 

NIM encourages technology translation 

and adaption, and estimates the potential 

for business growth. As a clearinghouse 

the NIM, the MEP, and their network of 

partners are facilitating the building of 

technology based supplier networks. 

Process Equipment Company (PECo) of 

Dayton, Ohio participated in the National 

Innovation Marketplace to help overcome 

its drastically declining auto sector and 

layoffs (one-third of employees in the 

last year). Now having been connected 

to a patented 3D nanopositioner, PECo 

expects to see an annual revenue 

increase of over 7%, hire 15 new 

employees to handle expansion, and 

as one manager said, “It could really 

put us on the map.”
February 2010 | Hollings Manufacturing Extension Partnership Advisory Board 26

 (2) management and workforce 

talent; (3) risk capital and debt 

financing; and (4) a regional 

innovation network of similar 

companies competing—especially 

in pre-competitive research—and 

cooperating with each other.41

An additional challenge for 

manufacturers trying to compete 

in the global economy is the 

increasingly blurry line between 

manufacturing and services. Based 

on evidence drawn from over 10,000 

firms in 25 different countries, 

it appears that the majority of 

manufacturers around the world 

are adopting a range of strategies 

that make their products more 

marketable. These strategies 

include, but are not limited to:42

1. Suppliers take on more 

responsibility for retail, 

distribution, finance, and logistics; 

2. Manufacturers attach services 

to the product for the benefit of 

the customer, (e.g. installation, 

consultation, and maintenance); 

3. Services are incorporated directly 

into the product by means of hightech methods, such as “coupled 

product and service” (e.g. a 

Health Usage Monitoring System); 

4. Use-oriented product-service systems where the customer is not the owner of the tangible product; instead 

the product, process, or service is shared, pooled, or leased (such as a leased cable modem or a vehicle 

painting system that is installed in an OEM’s assembly plant but owned and operated by the supplier); and 

5. Result-oriented product service systems whereby the product is replaced by a service (such as support staff 

or replacing answering machines with voice mail service). 

Source: “Clarity is Missing Link in Supply Chain,” Phred Dovorak, Wa;l Street Journal, 5/18/2009

ExporTech

ExporTech is focused on helping manufacturers enter or expand into global. Developed as 

a pilot by the Maryland District Export Council, Baltimore U.S. Export Assistance Center, 

and the Manufacturing Extension Partnership, ExporTech is now deployed nationally 

as a collaborative partnership between MEP, U.S. Export Assistance Centers, and state 

international trade offices, among others. Participating companies meet for three one-day 

sessions over a three-month period, and develop export plans that are vetted by local 

experts. As exporting continues to present significant opportunities for manufacturers and is 

receiving significant support at the federal and local levels, the MEP Board supports national 

program goals to expand ExporTech program into more states in FY2010.

Wilco Machine & Fab is a manufacturer (located in Marlow, Oklahoma) of fabricated and 

machined equipment, products, and tools for the energy industry. In 2009 exports accounted 

for less than 8% of their total revenue. Following their participation in ExporTech, halfway 

through 2009 Wilco’s exports had jumped to 51% of its revenue and were expected to reach 

60% of total revenue by the end of 2009. 
27 Hollings Manufacturing Extension Partnership Advisory Board | February 2010

This hybrid of products and services within manufacturing clearly indicates a new level of sophistication and complexity 

and requires that manufacturers understand the value-add demanded by consumers related to service offerings. It also 

requires the know-how to manage costs and timescales related to developing and executing non-standardized contracts 

or establishing long-term relationships with suppliers. 

Develop and Retain Current and Future Talent

Despite the economic downturn and 

a perceived lack of jobs, data from a 

May 2009 survey of manufacturers 

indicates that skills shortages still 

exist, especially for the most profitable 

companies and for skilled production 

workers, scientists, and engineers. 

The survey also identified that having 

a highly skilled, flexible workforce 

remains critical to business success 

and that new product innovation 

is now seen as the most important 

driver of business success, which 

also requires a highly skilled, flexible 

workforce.43

Anecdotal evidence suggests the lack of skilled workers extends beyond engineers and scientists to all levels of a 

manufacturing enterprise. The job of machinists and welders is now more dependent on a strong base of knowledge and 

skills than ever before. There is a shortage of appropriately skilled workers at nearly all levels of manufacturing, and major 

challenges to be overcome. In addition to concern over the declining percentage of students in U.S. universities studying 

science and engineering, the most recent skills gap report released by the NAM identified additional workforce challenges 

including: the exodus of Baby Boomers from the workforce with substantial accumulated skills; changing job requirements, 

necessitating some level of technical skill in almost all jobs and making truly unskilled jobs a thing of the past; significant 

dissatisfaction among manufacturers with the quality of K-12 education and the dearth of adequate and accurate career 

counseling; and the changing attitudes about careers and job satisfaction among Generation Y.44

Since the U.S. trade imbalance began growing at the beginning of the 21st Century, so too have cries that the U.S. education 

and training system must focus on science, technology, engineering, and math (STEM) based curricula to increase our longterm global competitiveness. Science and engineering occupations in particular are critical to the manufacturing sector. 

Manufacturing is the second largest employer of individuals in science and engineering occupations, behind the professional, 

scientific, and technical services industry. It is worth noting that the research, development, and design industry is tightly 

tied to manufacturing. This industry exemplifies the transition from innovation to product deployment for new sales and new 

markets and is a critical part of manufacturing’s supply chain.

The skills gap report by the NAM identified the changing attitudes about careers and jobs satisfaction among Generation Y as 

a major workforce challenge. This is concerning because long-term attitudes about working in manufacturing are important to 
February 2010 | Hollings Manufacturing Extension Partnership Advisory Board 28

the industry’s economic competitiveness. While manufacturing was identified as key to economic vitality in the Public View 

of Manufacturing survey, the perception exists – particularly among young people – that all of manufacturing represents the 

old economy. Younger people (age 18-24) are less likely to think that manufacturing is important to our economy, less likely to 

believe that additional investments in manufacturing are needed, less likely to think of manufacturing as high-tech, and least 

likely to agree that manufacturing jobs are clean and safe. Additionally, while manufacturing ranked first in terms of economic 

importance, it ranked only fifth as a career choice. Despite data that indicates older populations have a more favorable view 

of manufacturing, parents do not appear to think much differently from their children. Less than one in three Americans 

(30 percent) would encourage their child to pursue a career in manufacturing.45

Yet, what if young workers thought of manufacturing for what it truly is - products that will 

be solutions to major challenges in our world (such as renewable energy and pharmaceutical 

manufacturing), products that young people relate to (such as automobiles and energy drinks), 

products that require high-tech skills and offer premium jobs? What if young workers thought 

about their careers in terms of occupations, skills, and learning opportunities rather than 

as being in an industry silo? Firms and policy makers alike should consider how working 

in advanced technology occupations appeals to younger generations. This may trigger a 

generational transition with significant economic impact.

Getting workers of all ages the knowledge and skills they need to be successful in today’s 

manufacturing is critical. For manufacturers, the country’s community colleges remain a 

strong public option for these activities. More than half of community colleges (55 percent 

or approximately 1,200 institutions) offered specialized training in manufacturing skills, 

with about 871,000 students enrolled in these courses.47 A Center for Regional Economic 

Development Survey of 1,013 community colleges in June 2005 found that the majority of 

funding for these programs came from contracts or grants with private companies working in 

conjunction with a state.48 These types of public-private partnerships are the key to helping 

manufacturers obtain the workers to stay competitive, and to training job seekers with the 

skills to obtain a good job. 

Basic and advanced skill development itself is not sufficient for creating the internal 

infrastructure necessary to foster the product innovation that companies identify as their 

most important economic driver. To help spur innovation many companies are embracing 

the concept of employee leadership and empowerment. Workers drive the innovation of 

new processes and products from within the firm, either as individuals or as part of a group, 

sometimes from a role that is different than their official duties within their organization. 

How do firms create a culture that allows their talent to grow and prosper? This involves 

some combination of talent, process, and rewarding innovation. Two key methods that 

have been used by business to foster employee leadership and empowerment include:49

•	 Employees are granted some form of ownership rights in the internal enterprises they help create.

•	 Employee teams are treated as a profit center rather than a cost center and are responsible for their own bottom line.

One way companies handle this is for the team to have its own budget and its own internal bank account.

Small and medium-sized firms are 

often owned by local business 

people and are funded through 

local financial institutions. The 

needs of these manufacturing 

organizations, and their potential 

to revitalize America through the 

introduction of new products, 

should be a top federal priority...

Many case studies indicate that 

firms with greater training and 

workforce development are more 

competitive and are achieving higher 

productivity gain. It is difficult for 

most of these companies to find 

the resources necessary to support 

these activities.

—Jim Jacobs, President of Macomb Community 

College in Michigan and MEP Advisory Board 

Member46
29 Hollings Manufacturing Extension Partnership Advisory Board | February 2010

Companies are experimenting with employee leadership and empowerment in green product development and green lean 

process innovation. There are strong indications that universities are also following this trend. Beyond becoming green 

and lean themselves, universities have begun educating and training the next generation of leaders who understand the 

environmental aspects of business. For example, a new program offered by the University of Pennsylvania’s Wharton School 

and School of Arts and Sciences is enabling graduate students to earn a dual Master of Business Administration/Master 

of Environmental Studies degree. Four Ohio campuses launched an advanced energy master’s degree program. The first 

doctoral degree in sustainability was launched at the Rochester 

Institute of Technology, with the goal of advancing research and 

education in alternative energy development, sustainable design, 

green product development, industrial ecology, and pollution 

prevention.50

As firms consider their culture of employee leadership and 

empowerment, the sharing of information and internal talent 

development and talent management becomes critical. A 2009 

roundtable of leaders from academia (Harvard and University of 

Michigan), business (Corning, Cisco Systems, Goldman Sachs 

and IBM), and others (Aspen Institute, Conference Board, Deloitte 

and Fortune Magazine) identified what it means to be a talent 

driven firm. The accompanying text box identifies ways in which 

the roundtable described the relationship between information, 

knowledge, innovation, and talent.51

Finally, the need to create and retain jobs is an important element 

of economic and workforce strategy. During these difficult 

economic times, one strategy to stop the hemorrhaging of jobs 

is for business services to focus on stabilizing a company so 

that future growth opportunities can present themselves. This 

strategy of stabilizing a company so that it can retain current 

employees and prepare for future job growth within the company 

is commonly referred to as layoff aversion strategies. Many states 

across the nation are beginning to align their formal workforce 

development layoff aversion strategies with business services 

such as those offered by the MEP.

Small and medium-sized firms are often owned by local business 

people and are funded through local financial institutions. The 

needs of these manufacturing organizations, and their potential 

to revitalize America through the introduction of new products, 

should be a top federal priority. Many case studies indicate that firms with greater training and workforce development are 

more competitive and are achieving higher productivity gain. It is difficult for most of these companies to find the resources 

necessary to support these activities.

Layoff Aversion 

The Workforce Investment Act (WIA) authorizes 

services and funds for dislocated workers as 

well as rapid response activities to facilitate a 

smooth transition to new jobs and careers when 

workers lose their jobs. Over the last decade 

WIA dislocated worker funds have been utilized 

for layoff aversion – to prevent the layoff or 

minimize its scope and effect on both workers 

and communities. In recent years layoff aversion 

programs have been developed in Oklahoma, 

Missouri, Michigan, New York, Pennsylvania, and 

Indiana, and other states, such as California, have 

nascent efforts. 

The Missouri MEP Center – Missouri Enterprise – 

has been responsible for conducting assessments 

for the state’s layoff aversion program at no cost 

to the employers. For these at-risk businesses, 

Missouri Enterprise analyzes and prioritizes 

challenges and opportunities for the company’s 

survival, and helps to develop strategies to avert 

plant closings and business failures. By addressing 

risk factors before they become critical, Missouri 

Enterprise helps businesses increase their 

available options, the likelihood of successfully 

averting layoffs, and helps to stabilize a company 

so that it can consider growth opportunities with 

new products and markets, new technologies, and 

even new jobs. During 2007-2009, 202 jobs were 

created and an additional 371 jobs were retained 

across 69 companies through Missouri’s Layoff 

Aversion program. 
February 2010 | Hollings Manufacturing Extension Partnership Advisory Board 30

Summary – Characteristics of Successful Manufacturers

Four interconnected responses to change have emerged among successful manufacturers. These include:

•	 Innovating constantly to adapt to economic and technological changes;

•	 Embracing green and green lean;

•	 Recognizing and navigating opportunity in the global value chain; and

•	 Developing and retaining current and future talent.

The Manufacturing Extension Partnership, in combination with federal, state, and local partners are working with firms that 

are advanced in these responses to help them use these strategies as sustaining sources of competitive advantage. The MEP 

and its partner organizations are also working with firms that are seeking a navigator, guide, and strategic partner in shaping 

their responses to post-recession economic realities. For example, the Green Supplier Network and E3 are helping firms to 

link energy usage and environmental mitigation with economic success. The National Innovation Marketplace is helping to 

spur innovation and connect manufacturers within the supply chain. And layoff aversion strategies are helping firms and 

communities retain jobs and remain competitive in these challenging economic times.

The Talent Driven Firm

In 2009 the Aspen Institute convened a roundtable of private and public sector leaders who observed that:

Manufacturing firms identify talent as one of the top issues impacting their competitiveness. While knowledge and 

skills development is often done through education and training programs, today’s firms acknowledge an innate need for 

individual workers to gain knowledge and skills within and across firms, through social and professional networks and 

through experimentation and innovation. This will drive the next generation of research and development employees. 

Tacit knowledge is the most valuable type of knowledge, which often embodies subtle but critical insights about process 

or nuances of relationships, and is best communicated through stories and personal connections – modalities that are 

typically discounted in most enterprises.

•	 The primary source of value for companies is shifting from accumulating and exploiting static “stocks of knowledge”

to managing continuous “flows of knowledge.” The information age now means that knowledge is gained 

continuously, 24/7.

•	 How exactly does talent get better faster? Not simply by formal training, but by trying new things, by allowing

workers to experiment with what they do in their jobs and how they do it, and by tackling real problems with other 

talented people with different backgrounds and skills – people who are just as likely to work for other companies, 

in their locales, as they are to be working in the same company. Talented employees develop best by participating in 

talent networks, the largely invisible matrix structures, made up of knowledge flows that run within firms and, with 

increasing frequency, between and across them.

•	 Most businesses are still based on well-established command and control structures and have a hard time accepting

systems, like those built on web-based social networking tools, that encourage bottom-up horizontal collaboration, 

even internally. As a result, the most exciting innovations in building talent-driven firms may well occur in smaller 

entrepreneurial firms and at the edge of large enterprises, rather than at their core. 
31 Hollings Manufacturing Extension Partnership Advisory Board | February 2010

T

he MEP Advisory Board seeks policy action that will help trigger and support the transition to product innovation, 

development and deployment into new sales and new markets. We believe that the manufacturing industry has 

the potential to be part of the backbone of the nation’s economic recovery and the economic future of the nation. 

By recognizing and more clearly defining the characteristics of successful manufacturers, policy makers can 

cohesively support, promote, and re-energize the growth of U.S. manufacturers and in the process re-brand what American 

manufacturing is and what it does. We believe that all policies must abide by three principles: (1) help, not hinder, including 

greater emphasis on technical assistance over compliance; (2) add value; and (3) replicate lean manufacturing by streamlining 

government efficiency and effectiveness. We recognize that firms themselves are ultimately responsible for their individual 

success across the four critical categories of response outlined in this report. It is not enough to “survive” in the short-term; 

companies must be pro-active about long-term sustainability. Toward this end, we offer a menu of opportunities for action 

across each of the four characteristics of competitive manufacturers.

Innovate Constantly to Adapt to Economic and Technological Changes

1. Streamline innovation and growth services targeted to manufacturers. There are a multitude of programs and 

practices focused on increasing the competitiveness of U.S. manufacturers, and businesses in general, but too often 

they operate in silos that deter collaboration and stimulate competition among programs for federal resources. The 

National Innovation Marketplace is a promising effort to electronically connect manufacturers and product developers. 

These connections can also be strengthened through the place-based strategies - also called “cluster” or “sector” 

strategies - that are being promoted by the current Administration. In order to increase these nascent federal efforts to 

support innovation we recommend that a formal review of existing incentives and barriers to innovation, performed by 

a body such as the Manufacturing Council or another policy group or task force, is necessary. A review of the balance 

between existing patent and licensing laws should be included in this effort. Why is it that a musical artist can write a 

song and get copyright protection forever, but inventors get patents for only 17 years? While the two scenarios have their 

undeniable differences, this time interval may be a deterrent to manufacturers making more significant research and 

development investments. The MEP can work collaboratively with the U.S. Patent and Trade Office to develop an efficient 

and effective process to adjust the balance between patent lengths and licensing issues and how products are eventually 

expanded into competitive markets to open the product to new or additional innovations that a competitive marketplace 

can better provide. 

Opportunities for Action 
February 2010 | Hollings Manufacturing Extension Partnership Advisory Board 32

2. Target R&D investments to where measures and outcomes indicate success. While many and varied reports and 

studies have called for a renewed investment in basic and applied research, it is important to see the national laboratories 

(such as Department of Energy, Department of Defense, and National Institute of Health) held accountable for including 

technology transfer measures as part of their mission. We believe the lab should be closely connected to MEP and that 

MEP can help take innovations into the marketplace through its network of regional centers. We would encourage a 

system that links the availability of base funding for national labs to successful technology transfer indicators, and that the 

MEP is in a position to assist these laboratories in making their technology transfer processes more efficient and effective. 

Furthermore, MEP should oversee a manufacturing technology arm of the Small Business Innovation Research (SBIR) 

program to better coordinate services to small and medium-sized manufacturers.

Embrace Green and Green Lean

3. Invest in clean energy innovation and expand the clean energy 

supply chain. We support the increased research and development of 

products related to clean energy technologies including wind, solar, biofuels, 

fuel cells, energy storage and transmission technologies, and advanced 

carbon capture and storage, as they present great opportunities in both 

innovation and green lean. As investments in this area increase, we expect 

to see more and more companies migrating from declining sectors within the 

manufacturing industry into clean energy manufacturing. To help with this 

transition we support the expansion of E3 (Economy-Energy-Environment) 

and the Green Supplier Network, two collaborative, resource-sharing models 

between U.S. agencies, local utilities, local government, and small and 

medium-sized manufacturers. 

4. Increase awareness, understanding, and implementation of green 

and new energy economy industrial standards. While many standards 

are emerging, such as the International Organization for Standardization’s ISO14000 Environmental Management 

Standard, there are likely to be many more standards to come. There is a need to both inform U.S. manufacturers about 

looming standards, certifications, and performance measures in a systematic manner and provide training on ways to 

meet or exceed the standards. Due to the location of the MEP within the National Institute for Standards and Technology 

(NIST) we believe the program is uniquely positioned to bridge the gap around standards awareness and implementation 

with manufacturers.

5. Create market opportunities from major global challenges. We were glad to see this as a major recommendation 

in the recently released report by the National Economic Council and the Office of Science and Technology Policy’s report 

on “A Strategy for American Innovation: Driving towards Sustainable Growth and Quality Jobs.” If we are going to focus 

on innovative new product development, we should also emphasize the social and economic benefits of addressing 

challenges faced across the world, including health care access, costs, and breakthrough treatments; food and hunger 

issues; and drinkable water. MEP can play a role in linking the research done through NIST and other federal laboratories 

to the state and local MEP centers through technology transfer, technical assistance, and other aspects of its current 

product and service offerings. 
33 Hollings Manufacturing Extension Partnership Advisory Board | February 2010

Recognize and Navigate Opportunity in the Global Value Chain

6. Increase efforts to help manufacturers navigate export markets and streamline the technology export 

process. One very promising practice is ExporTech, a collaborative effort between MEP, the U.S. Export Assistance 

Centers, District Export Councils, Small Business Development Centers, and state-based international trade programs. 

This program is a “how to” service to help companies expand into global markets by developing a proactive international 

growth plan customized for their business and moving the company 

into actual, profitable export sales. The program offers detailed 

guidance – all in one place – on the variety of elements critical to 

understand for executing an exporting program, from banking and 

financing to freight forwarding, licensing, and strategy. Secretary of 

Commerce Gary Locke recently announced an initiative to streamline 

the Department of Commerce’s licensing of dual use technology 

exports to many countries. Additional effort is needed to revamp the 

process by which dual use and military technologies are identified, 

licensed, and controlled. These processes should be streamlined 

into an expedited “one-stop” process that eliminates the current 

split licensing process that is managed by the Department of State 

and the Department of Commerce (with Department of Defense 

involvement in both processes). The current licensing process is a 

major impediment to U.S. exporting. 

7. Increase efforts to help manufacturers diversify their 

markets. Growth services include the development of new products 

and services, but just as important they include the creation of 

new market opportunities. For many manufacturers, this means 

diversification from existing markets into emerging industries. The 

Michigan Manufacturing Technology Center (MMTC), the MEP center 

for the State of Michigan, has developed a program specifically 

focused on assisting companies in aligning their core competencies 

and strengths with new customers in both current markets and in new 

markets, improving sales effectiveness and return on investment, and 

increasing marketing support for new sales efforts. 

8. Improve the data available to present the value of manufacturing. It is hard to truly understand the 

competitiveness of U.S. manufacturing based on traditional indicators. New data is critically needed to track the 

implications of the globalization of manufacturing and services in high technology industries for the U.S. economy as a 

whole, and for the health of our manufacturing sector. This need should be addressed expeditiously by relevant Federal 

agencies and include new measurements beyond job creation and production. It is critical that America has a real 

discussion about what we believe constitutes a healthy manufacturing sector. We encourage MEP to work with data 

leaders from key federal agencies and national organizations to identify a series of manufacturing dashboard indicators 

beyond the traditional measures of employment and productivity and produce more just-in-time data to inform national 

manufacturing policy and practice.

What is a healthy 

manufacturing sector? 

Opinions vary. 

•	 Is it jobs and productivity?

•	 Is it year to year firm survival?

•	 Is it wealth generation in a community?

•	 Is it stable, premium wage

employment?

•	 Is it a firm’s ability to increase its ROI?

•	 Is it sustained levels of research and

development investment?

•	 Is it sustained levels of new product,

process, and market innovations?

•	 Is it a sustained percentage of revenue

from products 5 years old or younger?

•	 Is it a neutral balance of trade across

the industry’s sub-sectors?

•	 Is it the development of manufacturing

professionals?
February 2010 | Hollings Manufacturing Extension Partnership Advisory Board 34

Develop and Retain Current and Future Talent

9. Promote career pathways and a rebranding of manufacturing in the economic sector where innovation leads 

to product, development and deployment into new sales and new markets. This effort will take a tremendous 

amount of outreach, awareness, and education. However, it is extremely worthwhile and important to our overall goals 

for many reasons, including attracting young workers to manufacturing. Manufacturing has a largely negative connotation 

with the media and the general public and the value of producing goods has never been held in lower esteem. We need 

to rebrand manufacturing for what it is, a high-technology activity that transitions innovation to product deployment. 

We need to highlight to manufacturers, parents, students, workers, and the media that this is done through employee 

leadership and in “talent driven firms”, and that a career in manufacturing is a career in product innovation, development, 

and deployment. In order to do this, MEP must work with key national, state, and local partners to help ensure workplacebased education can be translated into academic credit; to better connect job training and adult education to careers 

in manufacturing; and to use co-op programs and internships as a federal funding source for higher education. As 

importantly, we must integrate vocational and adult education with academic training so that we recognize career and 

technical education as a gateway into innovation, product development and deployment and reinvigorate trade skills 

as a choice not an alternative in high school. 

10. Emphasize manufacturing within the higher education curriculum. We strongly support an increase in the 

manufacturing emphasis in formal engineering education, an increased emphasis on manufacturing and supply chains 

in both business and science degree programs, and the expansion of international business competitions (in high 

school and post-secondary) to include a focus on manufacturing products. For example, manufacturing courses should 

require mathematics and English as prerequisites. More students need exposure to mechatronics, the trend towards the 

synergistic combination of precision mechanical engineering, electronic control, and systems thinking in the design of 

products and manufacturing processes. MEP should work with national, state, and local education leaders to stress the 

need for more mechatronics training in secondary and post-secondary education and training courses. The Eureka Ranch, 

a strategic partner of MEP, is working on building an innovation curriculum to be utilized in this effort.

11. Endorse and promote national certification and skill standards that relate to manufacturing. The U.S. 

Department of Labor’s 2006 Framework of Competencies for the Advanced Manufacturing Sector52 was developed with 

manufacturers to identify a consistent set of knowledge, skills, and abilities needed to thrive in the 21st century world of 

manufacturing. This effort is being revisited and revised by the Department of Labor and includes staff from MEP in the 

process. In addition to this effort, the Manufacturing Institute partnered with the National Manufacturing Skills Standard 

Council, the National Institute for Metalworking Skills, the American Welding Society, the Society of Manufacturing 

Engineers, and ACT Inc. to develop the NAM-Endorsed Skills Certification System53 that was released in 2009. These 

efforts should be applauded and built upon as a basis for effective communication between education and industry. 

12. Partner with the federal, state, and local workforce system to proactively avert layoffs. We are in unprecedented 

economic times and layoffs are all too commonplace. Preventing or minimizing the scope and effect on both workers and 

communities is an important aspect of economic and workforce development. Companies and workers can be determined 

to be “at risk” of closing or necessitating layoffs for a variety of factors, addressing these risk factors before they become 

critical increases the number of available options and improves the likelihood of successfully averting layoffs. Layoff 

aversion assistance is clearly authorized in the Workforce Investment Act and in its final regulations, allowing dislocated 

worker funds to be used for economic trends monitoring and creation of early warning networks, pre-feasibility studies, 

employee stock ownership plans, incumbent worker training, and linkages to loan programs and other business assistance 

programs. The MEP Centers in Missouri, Oklahoma, Pennsylvania, and others are leading the way in working with the state 

and local workforce system (through early warning systems and other processes) to avert mass layoffs. This process needs 

to be fully supported - layoff aversion is a critical job creation strategy in today’s economic climate.
35 Hollings Manufacturing Extension Partnership Advisory Board | February 2010

Summary – Opportunities for Action

The MEP Advisory Board offers twelve specific recommendations across four broad categories that are designed to emphasize 

technical assistance over compliance, add value, and share the burden across the private, public, and education sectors. Our 

recommendations fall into the following four areas:

•	 Innovate constantly to adapt to economic and technological changes;

•	 Embrace green and green lean;

•	 Recognize and navigate opportunity in the global value chain; and

•	 Develop and retain current and future talent.

The Manufacturing Extension Partnership, in combination with its federal, state, and local partners is ahead of the curve in 

working with firms that are advanced in these responses to challenges of accelerated global competition. This partnership is 

ready to continue to work with firms to make continuous innovation, green product development, and green lean continuous 

process improvement a sustaining source of global competitive advantage. The MEP and its partner organizations are also 

ready, willing, and able to work with small and mid-sized firms that are seeking a navigator, guide, and strategic partner in 

shaping their responses to these ongoing global challenges. 

For example, the Green Suppliers Network and E3 are helping firms in a way that links energy and environmental impacts 

with economic success. The National Innovation Marketplace is helping to spur innovation and connect manufacturers within 

the supply chain. And layoff aversion strategies are helping firms and communities retain jobs and remain competitive in 

these challenging economic times. These programs must be supported, expanded, and taken to scale to serve more firms, 

communities, and workers. 
February 2010 | Hollings Manufacturing Extension Partnership Advisory Board 36

U.S. Products Lost or At-Risk to Globalization

Appendix A:

Industry Already Lost At-Risk

Semiconductors “Fabless Chips” DRAMs

Flash Memory Chips

Lighting Compact fluorescent lighting LEDs for solid-state lighting, signs,

 indicators, and backlights

Electronic Displays LCDs for monitors, televisions, and handheld devices 

like mobile phones

Electrophoretic displays for Amazon’s Kindle e-reader 

and electronic signs

Next-generation electronic paper displays 

for portable devices like e-readers, retail 

signs, and advertising displays

Energy Storage and Grewen 

Energy Production

Lithium-ion, lithium polymer, and NiMH batteries for 

cell phones, portable consumer electronics, laptops, 

and power tools

Advanced rechargeable batteries (NiMH, Li-ion) for 

hybrid vehicles

Crystalline and polycrystalline silicon solar cells, 

inverters, and power semiconductors for solar panels

Thin-film solar cells (the newest solarpower technology)

Computing and 

Communications

Desktop, notebook, and netbook PC’s

Low-end servers

Hard disk drives

Consumer-networking gear such as routers, access 

points, and home set-top boxes

Blade servers, midrange servers

Mobile handsets

Optical-communication components

Core network equipment

Advanced Materials Advanced composites used in sporting goods and other 

consumer gear, Advanced Ceramics, and Integrated 

circuit packaging

Carbon composite components for 

aerospace and wind energy applications

Many high-tech products can no longer be manufactured in the United States because critical knowledge, skills, and suppliers 

of advanced materials, tools, production equipment, and components have been lost through outsourcing. Many other 

products are on the verge of the same fate.

Appendix

Excerpted from Harvard Business Review, July-August 2009, “Restoring American Competitiveness,” by Gary P. Pisano and Willy C. Shih
37 Hollings Manufacturing Extension Partnership Advisory Board | February 2010

Understanding the Global Marketplace

Appendix B:

Export Largest Market Second Largest Market Third Largest Market

Country Percent Country Percent Country Percent

All technologies China 9.6 Canada 9.3 Japan 7.7

Computer software Canada 41.6 Mexico 8.6 China 6.5

Advanced materials Mexico 14.1 China 11.5 Japan 11.1

Aerospace Japan 8.7 France 8.5 China 8.1

Biotechnology Netherlands 28.8 Belgium 13.1 UK 12.6

Electronics China 16.9 Malaysia 11.1 Mexico 10.6

Flexible manufacturing South Korea 15.4 Taiwan 13.7 Japan 13.0

Information/ communications Canada 16.2 Mexico 13.7 China 8.0

Life sciences Japan 12.6 Germany 10.9 Canada 8.6

Nuclear technology Japan 36.9 UK 15.0 Taiwan 9.8

Optoelectronics Japan 15.4 Germany 10.6 Taiwan 9.7

Weapons UK 16.4 Japan 14.4 South Korea 10.0

Three largest export markets for U.S. technology products: 200654 

Import Largest Supplier Second Largest Supplier Third Largest Supplier

Country Percent Country Percent Country Percent

All technologies China 25.3 Mexico 10.6 Japan 8.9

Advanced materials Japan 44.2 Mexico 11.3 Germany 10.1

Aerospace France 24.7 Canada 22.9 UK 13.0

Biotechnology Germany 25.6 Ireland/UK 11.1 Belgium 9.3

Computer software Mexico 23.7 China 17.0 Canada 16.6

Electronics Taiwan 16.2 South Korea 11.1 Malaysia 10.8

Flexible manufacturing Japan 43.4 Netherlands 10.2 Germany 9.5

Information/communications China 40.5 Malaysia 13.4 Mexico 10.1

Life sciences Ireland 35.3 Germany 10.6 Mexico 6.6

Nuclear technology UK 29.9 Russia 27.8 Netherlands 14.9

Optoelectronics Mexico 51.9 China 22.8 Japan 6.8

Weapons Canada 15.8 UK 15.0 China 13.4

Three largest foreign suppliers of technology products to United States: 200655 
February 2010 | Hollings Manufacturing Extension Partnership Advisory Board 38

Sustaining the Supply Chain: Suggested Model for Decision Making

Appendix C:
39 Hollings Manufacturing Extension Partnership Advisory Board | February 2010

This report was done in partnership between the MEP Advisory Board and the Corporation for a Skilled Workforce. In addition 

to the authors, we would like to thank the following for their contributions:

MEP Advisory Board Members

•	 Edward W. (Ned) Hill (Chair), Dean, Maxine Goodman Levin College of Urban Affairs, Cleveland State University

•	 Mark Rice (Vice Chair), President of the Maritime Applied Physics Corporation

•	 James R. (Jim) Bean, President and CEO of Preco Electronics, Inc.

•	 Lydia Carson, President and CEO of Balm Innovations, LLC

•	 Cheryl Hill, owner and CEO of Hill Manufacturing, Inc. in Broken Arrow, Oklahoma

•	 James Jacobs, President of Macomb Community College in Michigan and the Associate Director for Community College

Operations at the Community College Research Center

•	 Fred P. Keller, Chairman and CEO of Cascade Engineering

•	 Keith Mayeaux, President of A+ Corporation

•	 Capers W. McDonald, Executive in Residence, Johns Hopkins University’s Carey Business School

CSW Staff

•	 Jeannine LaPrad, President and CEO

•	 Tammy Coxen, Policy Analyst

Acknowledgements
February 2010 | Hollings Manufacturing Extension Partnership Advisory Board 40

1. The State of Manufacturing 2009, Enterprise Minnesota, 

2009.

2. Andrew, James and Emily Stover DeRocco and Andrew 

Taylor, “The Innovation Imperative in Manufacturing: 

How the United States Can Restore its Edge,” The Boston 

Consulting Group, March 2009.

3. “Supply Chain Globalization: How Surviving SMEs Can 

Position Themselves for the Future,” Manufacturing 

a Better Future for America, Alliance for American 

Manufacturing, 2009.

4. “People and Profitability: A 2009 People Management 

Practices Survey of the Manufacturing Industry,” The 

Manufacturing Institute, Deloitte, and Oracle, May 2009.

5. “2005 Skills Gap Report – A Survey of the American 

Manufacturing Workforce,” Deloitte, NAM, and The 

Manufacturing Institute, 2005.

6. Jacobs, James, “The Diminished Role of Training and 

Education in American Manufacturing and the Imperative 

for Change,” Manufacturing a Better Future for America, 

Alliance for Manufacturing, 2009.

7. Adler, Richard P., “Talent Reframed: Moving to the Talent 

Driven Firm,” The Aspen Institute, 2009.

8. The Facts about Modern Manufacturing, 8th Edition, The 

Manufacturing Institute, 2009.

9. U.S. Bureau of Economic Analysis.

10. U.S. Census Bureau, http://www.census.gov/foreign-trade/

Press-Release/current_press_release/ft900.pdf.

11. “Can the Future be Built in America?”, Pete Engardio, 

Business Week, September 10, 2009.

12. Science and Engineering Indicators 2008, National Science 

Board.

13. Ibid.

14. Ibid.

15. Ibid.

16. U.S. Bureau of Labor Statistics.

17. Ibid.

18. The Facts about Modern Manufacturing, 8th Edition, The 

Manufacturing Institute, 2009.

19. Ibid.

20. The Facts about Modern Manufacturing, 7th Edition, 

Manufacturing Institute, 2006.

21. The Facts about Modern Manufacturing, 8th Edition, The 

Manufacturing Institute, 2009.

22. Science and Engineering Indicators 2008, National Science 

Board.

Endnotes

23. “Improving the Manufacturing Skills Gap through People 

Management Practices,” Deloitte, October 5, 2009.

24. The Facts about Modern Manufacturing, 8th Edition, The 

Manufacturing Institute, 2009.

25. Science and Engineering Indicators 2008, National Science 

Board.

26. Pisano, Gary P. and Shih, Willy C, “Restoring American 

Competitiveness,” Harvard Business Review, 2009.

27. Ibid.

28. http://online.wsj.com/article/SB124603518881261729.html.

29. Kill, Bob, “The Future of Manufacturing: How Manufacturers 

Will Thrive in the 21st Century,” The State of Manufacturing 

2009, Enterprise Minnesota, 2009.

30. Andrew, James and Emily Stover DeRocco and Andrew 

Taylor, “The Innovation Imperative in Manufacturing: 

How the United States Can Restore its Edge,” The Boston 

Consulting Group, March 2009.

31. Science and Engineering Indicators 2008, National Science 

Board.

32. The Facts about Modern Manufacturing, 8th Edition, The 

Manufacturing Institute, 2009.

33. Ibid.

34. Next Generation Manufacturing Study: Overview and 

Findings, American Small Manufacturers Coalition, June 

2009.

35. Ibid.

36. Makower, Joel, “State of Green Business 2009,” GreenBiz.

com, February 2009.

37. Aeppel, Timonty, “Coming Home: Appliance Maker Drops 

China to Produce in Texas,” Wall Street Journal, August 24, 

2009.

38. McCormack, Richard, “The Plight of American 

Manufacturing,” Manufacturing a Better Future for America, 

Alliance for Manufacturing, 2009. For more information visit 

http://www.dmea.osd.mil/trustedic.html.

39. “Next Generation Manufacturing Study: Overview and 

Findings,” American Small Manufacturers Coalition, June 

2009.

40. Petrick, Dr. Irene, “Supply Chain Globalization: How 

Surviving SMEs Can Position Themselves for the Future,” 

Manufacturing a Better Future for America, Alliance for 

American Manufacturing, 2009.

41. Sallet, Jonathan, Ed Palsley and Justin Masterson, “The 

Geography of Innovation,” Center for American Progress, 

September 2009.
41 Hollings Manufacturing Extension Partnership Advisory Board | February 2010

42. Neely, Andy. Exploring the Financial Consequences of 

the Servitization of Manufacturing, Advanced Institute of 

Management Research Working Paper Series, ISSN: 1744-

0009, Cambridge, England, February 2009.

43. People and Profitability: A 2009 People Management Practices 

Survey of the Manufacturing Industry, The Manufacturing 

Institute, Deloitte, and Oracle, May 2009.

44. “2005 Skills Gap Report – A Survey of the American 

Manufacturing Workforce,” Deloitte, NAM, and The 

Manufacturing Institute, 2005.

45. “Public View of Manufacturing,” Deloitte and The 

Manufacturing Institute, June 2009.

46. Ibid.

47. Ibid.

48. Jacobs, James, “The Diminished Role of Training and Education 

in American Manufacturing and the Imperative for Change,” 

Manufacturing a Better Future for America, Alliance for 

Manufacturing, 2009.

49. Small Business Notes http://www.smallbusinessnotes.com/

choosing/intrapreneurship/intorg.html.

50. Makower, Joel, “State of Green Business 2009,” GreenBiz.com, 

February 2009.

51. Adler, Richard P., “Talent Reframed: Moving to the Talent 

Driven Firm,” The Aspen Institute, 2009.

52. http://www.doleta.gov/pdf/AdvncdManufactFWK.pdf.

53. http://manufacturingskills.org/index.shtml.

54. Science and Engineering Indicators 2008, National Science 

Board.

55. Ibid.