Amidst the Worst Manufacturing Slump since the Great Depression, American Companies Prevent Recovery by Axing Innovation
A faltering American Tradition: Pictured Here, Johnson & Johnson Manufacturing Plant circa 1894, New Brunswick, New Jersey.
According to representatives at the National Association of Manufacturers, “…the recession in manufacturing is both longer and deeper than any downturn since the Great Depression.” Manufacturing output has collapsed 12% this year, the fastest rate of shrinkage since 1946. Roughly 1 out of every 8 blue collar workers, a staggering 1.7 million Americans, have been laid-off in the last 18 months in this sector alone. Writing for Reuters, James B. Kelleher reports that not only has the manufacturing sector gone bust, but funding that would fuel innovation, the only thing that could potentially get us out of the FICRY mess, has been all but obliterated.
Facing strict credit restrictions, a slump in demand and a relatively strong foreign manufacturing output, American companies have cut way back on research and development. Kelleher asserts, “…industry-funded research and development has fallen faster than industry output, according to figures from the National Science Foundation and the U.S. Federal Reserve.” If this trend continues, the U.S. could be playing technological catch-up for years to come.
Cutbacks in innovation raise questions about the future viability of American products on the global market. Chances for full economic recovery will be slim to none if American manufacturers slash research and development in order to support the production of technologically outmoded products.
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I’ve always subscribed to the ‘cleansing fire’ mentality myself. And I don’t see the loss of billion dollar bloated corporate R&D budgets being the end of American innovation. If fact, they created this mess. The cushy pampered 401kers did their part to quell America’s inner entrepreneur. The sedentary corporate life, even in R&D does not foster the great innovative ideas. Rather the intensity of an entrepreneur facing difficulty that creates true innovation as it has in America’s past. In adversity one is confronted in solving problems, and is that not the mentality of the true innovator? That was success story for the ‘great’ generation, and the emigrated European Americans trying to put food on their table. It was their tribulation that forced them to think on their feet and innovate. It wasn’t the boomer generation with their cush office jobs- they got us into this mess in the first place, especially with all the so called ‘financial innovation’- in which they crafted arcane and obscure invisible products to pull the wool over the public’s eyes… We now require a next generation of innovators to get us out of this mess, assuming they are actually up to the task.
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[...] Without a doubt, Americans must use innovation and entrepreneurship to climb their way out of today’s global recession. In a best case scenario, the behavior of women in the financial crisis will be indicative of a cultural shift. Entrepreneurship and social work should compete with corporate and financial jobs as the most desirable careers for both talented men and women. Click here to read more from FICRY.com about American innovation. [...]