Cambridge Business Association
Skills and Innovation Strategies to Strengthen U.S. Manufacturing
Report

Skills and Innovation Strategies to Strengthen U.S. Manufacturing

Lessons from Germany

Joseph Parilla, Jesus Leal Trujillo and Alan Berube
Brookings Institution, 2015
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Editorial Rating

8

Qualities

  • Innovative

Recommendation

The “valley of death” – the gap between basic research and the commercialization of new products – is a chasm too wide to cross for many US manufacturers, especially those in small and medium-sized businesses. Not so for Germany’s thriving manufacturing sector, which benefits from a top-down culture built on innovation. The Brookings Institution’s intriguing report shows how the United States can prepare for a manufacturing renaissance by nurturing innovation through government, industry and civic cooperation. getAbstract recommends this informative study to manufacturing executives, policy makers, educators and researchers.

Summary

Despite a recent recovery, US manufacturing hasn’t realized its potential to create jobs and wealth. Manufacturing accounts for just 10% of total US jobs and 12% of GDP. In Germany, by contrast, manufacturing employs 20% of the workforce and constitutes 22% of GDP. While America carries a $667 billion trade deficit in manufactured goods, Germany has a surplus of some $425 billion, despite an average hourly pay rate of $45.79 versus US workers’ $35.67. Innovation is critical to Germany’s success: German manufacturers conduct 86% of private-sector R&D; US companies, just 64%. ...

About the Authors

Alan Berube is a senior fellow and deputy director of the Metropolitan Policy Program at Brookings Institution, where Joseph Parilla is a research analyst and Jesus Leal Trujillo is a research assistant.

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