Is manufacturing important for maintaining innovation?

Does innovation rely on a strong manufacturing sector? It's an interesting concept and one that needs to be addressed, given the pressure currently being applied to Australian manufacturers.

A recent article in the HBR spoke about the importance of the domestic manufacturing base to maintaining the United States' position as a leader in innovation.

The article, written by Willy C. Shih, explained that "advanced manufacturing provides an important institutional foundation for learning and developing process skills and capabilities that are increasingly intertwined with core R&D in some of the industries most important to the country's economic future."

He argues that contrary to popular belief about the routine manual labour taking place in factories, the employees are in fact "inventive people who are the source of important ideas for making products better or in different ways".

Ultimately, he says that if a country loses the ability or the capacity to manufacture, it will also lose the innovative edge in an increasingly competitive marketplace.

Are we facing the same crisis here in Australia?

Recent announcements about the impending closure of locally based manufacturing sites could potentially lead to a similar inability for Australia to lead innovation on a global scale. The inevitable link between R&D and manufacturing surely means the two require a degree of cohesion to ensure products are produced in such a way that they are commercially viable, and with a factory based abroad, you could question the feasibility of this.

What do you think? Is it possible to remain innovative without the capacity to manufacture locally?

Read the full HBR article.
Read more market insights.