When It's Time To Scale, US Manufacturing Hits a Wall

curtwoodward writes "MIT researchers looked at 150 of the school's spin-out companies in manufacturing businesses over a decade, and found many of them hit the same chasm: Once it was time to ramp up to large-scale production, they couldn't find domestic investors and had to go overseas. The bulk of the research will be published later this year, but it raises an interesting conundrum — if an MIT-pedigreed company has serious trouble ramping up production in the U.S., how much harder is it for the 'average' business that wants to grow? Is it even still possible to do high-tech manufacturing here — or should it be?" Intel seems to be doing OK with U.S. manufacturing, but they have the advantage of established operations.

Comments

Manufacturing

[phantomfive]

The US produces something like 18% of the world's GDP. It's silly to say the US can't manufacture things. There are problems with labor-intensive manufacturing, but manufacturing overall is still something that's done in the US.

But that is not even the point of the study. If you read the article, it mentions that at least some of the companies stayed in the US to do manufacturing (the article doesn't give numbers, it says "often they moved out of the US for manufacturing"). The problem they had was they couldn't find investors in the US. They had to find foreign investors. Sometimes they found foreign investors and managed to stay in the US for manufacturing, but there is the assumption that foreign investors encouraged manufacturing out of the US as well. THAT is what this study is about, not a poorly-informed speculation on the decline of US manufacturing.

Re:The Problem: They're in Massachussets

[WindBourne]

Not just Germany, but nearly the entire rest of the western world. Canada and Australia are good example.