A new report from the Massachusetts Institute of Technology (MIT) suggests if American companies renew their commitment to research and development in domestic production, they could see significant gains for both their businesses and the United States economy as a whole.
Partnerships can lead to benefits
The Production in the Innovation Economy (PIE) report revealed partnerships with other businesses, federal agencies or even universities can allow enterprises to experience growth and increase their capabilities in the long run. As more companies are engaging in nearshore manufacturing and looking to enhance their organizational adaptability as business risks grow, they could find it beneficial to reinvest in their firms and work with others to develop new solutions.
"It has been suggested by previous reports that sustaining the strength of United States manufacturing is essential to America's future; a strong advanced-manufacturing base is crucial to national security, and it represents a key source of good-paying jobs," said Rafael Reif, president of MIT, according to MIT News. "But as the PIE report makes clear, local production is very important to sustaining a vibrant innovation ecosystem in a region. Thus, we must also take steps now to regain U.S. manufacturing momentum if we want to sustain the nation's signature economic advantage: innovation."
Considering risks of worldwide production
While the report emphasized how the American economy would benefit from an increased focus on domestic manufacturing, it also brought up the risks individual companies face when doing business overseas. According to the research, quality control can be a serious issue when manufacturing takes place far away from research and development initiatives, which can lead to faulty or poor product designs and limited efficiency. This highlights the importance of American production and the cost savings benefits it can lead to when a company takes the initiative to implement such programs.