Lindsey Graham and Hillary Clinton are co-chairs of the United States Senate Manufacturing Caucus. Is innovation our ace in the hole? I don’t think so.
There is no ace in the hole. If countries want to keep manufacturing jobs they are going to have to do lots of things right. No country has such an advantage they can expect to rely on their country being more innovative (of offering cheaper labor or their citizens working harder or…) than all the other countries in the world.
Innovation has been an advatage for the USA. It should continue to be an advantage for the USA but many other countries will innovate very well (Japan, Germany, China, Korea, Singapore, England…). The USA has many assets: transportation infrastructure, banking, rule of law, educated and skilled workforce, huge market, decent tax laws, engineering education… The key will be to keep focusing on the whole system (and fix things like huge budget deficient, huge current account deficit, excessive health care costs, excessive executive pay…).
I also believe a key competitive advantage will be in applying management improvement concepts such as lean manufacturing. Companies that don’t use management improvement ideas will find it more and more difficult to compete with companies like Toyota.