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An argument that America's economy needs a strong and innovative manufacturing sector and the jobs it creates.
Manufacturing’s central role in global innovation Companies compete on the decisions they make. For years—even decades—in response to intensifying global competition, companies decided to outsource their manufacturing operations in order to reduce costs. But we are now seeing the alarming long-term effect of those choices: in many cases, once manufacturing capabilities go away, so does much of the ability to innovate and compete. Manufacturing, it turns out, really matters in an innovation-driven economy. In Producing Prosperity, Harvard Business School professors Gary Pisano and Willy Shih show the disastrous consequences of years of poor sourcing decisions and underinvestment in manufacturing capabilities. They reveal how today’s undervalued manufacturing operations often hold the seeds of tomorrow’s innovative new products, arguing that companies must reinvest in new product and process development in the US industrial sector. Only by reviving this “industrial commons” can the world’s largest economy build the expertise and manufacturing muscle to regain competitive advantage. America needs a manufacturing renaissance—for restoring itself, and for the global economy as a whole. This will require major changes. Pisano and Shih show how company-level choices are key to the sustained success of industries and economies, and they provide business leaders with a framework for understanding the links between manufacturing and innovation that will enable them to make better outsourcing decisions. They also detail how government must change its support of basic and applied scientific research, and promote collaboration between business and academia. For executives, policymakers, academics, and innovators alike, Producing Prosperity provides the clearest and most compelling account yet of how the American economy lost its competitive edge—and how to get it back.
How to rethink innovation and revitalize America's declining manufacturing sector by encouraging advanced manufacturing, bringing innovative technologies into the production process. The United States lost almost one-third of its manufacturing jobs between 2000 and 2010. As higher-paying manufacturing jobs are replaced by lower-paying service jobs, income inequality has been approaching third world levels. In particular, between 1990 and 2013, the median income of men without high school diplomas fell by an astonishing 20% between 1990 and 2013, and that of men with high school diplomas or some college fell by a painful 13%. Innovation has been left largely to software and IT startups, and increasingly U.S. firms operate on a system of “innovate here/produce there,” leaving the manufacturing sector behind. In this book, William Bonvillian and Peter Singer explore how to rethink innovation and revitalize America's declining manufacturing sector. They argue that advanced manufacturing, which employs such innovative technologies as 3-D printing, advanced material, photonics, and robotics in the production process, is the key. Bonvillian and Singer discuss transformative new production paradigms that could drive up efficiency and drive down costs, describe the new processes and business models that must accompany them, and explore alternative funding methods for startups that must manufacture. They examine the varied attitudes of mainstream economics toward manufacturing, the post-Great Recession policy focus on advanced manufacturing, and lessons from the new advanced manufacturing institutes. They consider the problem of “startup scaleup,” possible new models for training workers, and the role of manufacturing in addressing “secular stagnation” in innovation, growth, the middle classes, productivity rates, and related investment. As recent political turmoil shows, the stakes could not be higher.
Manufacturing Decline argues that antigovernment conservatives capitalized on--and perpetuated--Rust Belt cities' misfortunes by stoking racial resentment. Jason Hackworth traces how the conservative movement has used the imagery and ideas of urban decline since the 1970s to advance their cause.
Evolving rapidly from a mass-produced product orientation to a flexible, solutions-oriented model, the changing manufacturing sector is poised to lead a global economic recovery. Truly an insider's guide to the future of this critical sector, this book provides policy recommendations based on a wealth of information. Despite the appearance of difficult economic times for U.S. manufacturing, that sector of the American economy is actually the most innovative and competitive in the world. Far from being confined to the tired stereotype of Industrial Age commodities, such as steel and mass-produced consumer products, U.S. manufacturing has long been an engine for growth. In the 1990s, this central role was strengthened as new technology development and application spurred higher levels of growth throughout the economy. In its present configuration, manufacturing includes such high-tech industries as fiberoptics and microchips. Globalization has accelerated the growth of the manufacturing sector by increasing competitive pressures to cut costs and develop new products faster, spreading out the fixed costs of R&D and investment. Truly an insider's guide to the future of this critical sector, this book provides policy recommendations based on a wealth of information. Evolving rapidly from a mass-produced product orientation to a flexible, solutions-oriented model, the changing manufacturing sector is poised to lead a global economic recovery. But it can do so only if the right policies are in place in the United States. To that end, the editors of this volume recommend fiscal and tort reform, higher educational achievement, and continued deregulation. At the international level, further trade liberalization and steps to reduce the trade deficit are recommended to ensure the staying power of U.S. competitiveness, particularly for technology-intensive industries.
How manufacturing textiles and guns transformed the United States from colonial dependent to military power. In 1783, the Revolutionary War drew to a close, but America was still threatened by enemies at home and abroad. The emerging nation faced tax rebellions, Indian warfare, and hostilities with France and England. Its arsenal—a collection of hand-me-down and beat-up firearms—was woefully inadequate, and its manufacturing sector was weak. In an era when armies literally froze in the field, military preparedness depended on blankets and jackets, the importation of which the British Empire had coordinated for over 200 years. Without a ready supply of guns, the new nation could not defend itself; without its own textiles, it was at the economic mercy of the British. Domestic industry offered the best solution for true economic and military independence. In Manufacturing Advantage, Lindsay Schakenbach Regele shows how the US government promoted the industrial development of textiles and weapons to defend the country from hostile armies—and hostile imports. Moving from the late 1700s through the Mexican-American War, Schakenbach Regele argues that both industries developed as a result of what she calls “national security capitalism”: a mixed enterprise system in which government agents and private producers brokered solutions to the problems of war and international economic disparities. War and State Department officials played particularly key roles in the emergence of American industry, facilitating arms makers and power loom weavers in the quest to develop industrial resources. And this defensive strategy, Schakenbach Regele reveals, eventually evolved to promote westward expansion, as well as America’s growing commercial and territorial empire. Examining these issues through the lens of geopolitics, Manufacturing Advantage places the rise of industry in the United States in the context of territorial expansion, diplomacy, and warfare. Ultimately, the book reveals the complex link between government intervention and private initiative in a country struggling to create a political economy that balanced military competence with commercial needs.
A definitive study that uses a blend of theory, history, and data to analyze the evolution of the US brewing industry; draws on theoretical tools of industrial organization, game theory, and management strategy. This definitive study uses theory, history, and data to analyze the evolution of the US brewing industry from a fragmented market to an emerging oligopoly. Drawing on a rich and extensive data set and applying the theoretical tools of industrial organization, game theory, and management strategy, the authors provide new quantitative and qualitative perspectives on an industry they characterize as "a veritable market laboratory." The US brewing industry illustrates many of the important topics in industrial organization, economic policy, and business strategy, including industry concentration, technological change, brand proliferation, and mixed pricing strategies. After giving an overview of the industry, Tremblay and Tremblay discuss basic demand and cost conditions and industry concentration. They describe the evolution of the leading mass-producing brewers and the emergence of both specialty brewers and imports. They analyze the history and the causes of product and brand proliferation (showing how product proliferation leads to firm dominance), discuss price, advertising, merger, and other management strategies, and examine the industry's economic performance. Finally, they discuss public policy, including anti-trust and public health issues. The authors' set of industry, firm, and brand data for the period 1950-2002 -- the most comprehensive data set of economic variables available for an oligopolistic industry -- will be available to purchasers of the book who send an e-mail request. Data sources are listed in an appendix. Robert S. Weinberg, a management strategy scholar and leading consultant to the brewing industry, contributes a foreword. This ambitious, authoritative work, capping the authors' 25-year study of the brewing industry, will be a valuable resource for industry analysts, economists, and students of industrial organization.
At its peak in the 1950s and 1960s, automobile manufacturing was the largest, most profitable industry in the United States and residents of industry hubs like Detroit and Flint, Michigan had some of the highest incomes in the country. Over the last half-century, the industry has declined, and American automakers now struggle to stay profitable. How did the most prosperous industry in the richest country in the world crash and burn? In Wrecked, sociologists Joshua Murray and Michael Schwartz offer an unprecedented historical-sociological analysis of the downfall of the auto industry. Through an in-depth examination of labor relations and the production processes of automakers in the U.S. and Japan both before and after World War II, they demonstrate that the decline of the American manufacturers was the unintended consequence of their attempts to weaken the bargaining power of their unions. Today Japanese and many European automakers produce higher quality cars at lower cost than their American counterparts thanks to a flexible form of production characterized by long-term sole suppliers, assembly and supply plants located near each other, and just-in-time delivery of raw materials. While this style of production was, in fact, pioneered in the U.S. prior to World War II, in the years after the war, American automakers deliberately dismantled this system. As Murray and Schwartz show, flexible production accelerated innovation but also facilitated workers’ efforts to unionize plants and carry out work stoppages. To reduce the efficacy of strikes and combat the labor militancy that flourished between the Depression and the postwar period, the industry dispersed production across the nation, began maintaining large stockpiles of inventory, and eliminated single sourcing. While this restructuring of production did ultimately reduce workers’ leverage, it also decreased production efficiency and innovation. The U.S. auto industry has struggled ever since to compete with foreign automakers, and formerly thriving motor cities have suffered the consequences of mass deindustrialization. Murray and Schwartz argue that new business models that reinstate flexible production and prioritize innovation rather than cheap labor could stem the outsourcing of jobs and help revive the auto industry. By clarifying the historical relationships between production processes, organized labor, and industrial innovation, Wrecked provides new insights into the inner workings and decline of the U.S. auto industry.