Anthony Demands an Explanation

On Jul 29, 2010, at 11:10 PM, Anthony wrote:

Is there a relationship between manufacturing and in innovation?   If manufacturing has moved to Asia, will innovation follow?   Can there be brisk innovation without manufacturing?  

http://www.youtube.com/watch?v=981c2LzHA9U

Saw this guy, Paul Craig Roberts, on Max Keiser.  He said you can't innovate if you don't make.  New products grow out of the production process.  Evidently Andy Grove of Intel supports this view.  But that is not what the Spiers method says.  

Anthony

Roberts is a good man and he is on our side, but he and Buchanan and the others are dead wrong with the close the borders stuff.

I'll be the first to say USA does way too much importing and the wrong kind of exporting.  But the problem is our monetary policy, which is the basis for all the waste fraud and abuse.  None of this would be possible on a gold standard.  So I say take care of the core problem and let the chips fall where they may.

To answer your question, heck yes, the manufacturers innovate indirectly with the esoteric information they bring to the problem.  They always suggest improvements in whatever is brought to them.  But that is secondary.  The very fact that someone is tooling up, listening and responding generates synthesis, which advances you or their next customers.  Move manufacturing overseas and that phenomenon goes with it.  Apple moved its iPod production to China.  It taught the Chinese about the special plastics Apple spec'd. China kept innovating in this plastic, to the point where the usa plastic people are no longer sure what they chinese are doing.  USA quit innovating in this thread.. (this from an apple engineer when we had a similar conversation at a seminar).  A list member, well paid, important position, with a usa top manufacturer was just laid off.  He is a grad of a top usa U and is at the top of his game.  Now he moved to China where he is doing the same thing for less (pay does go farther in china) for a subcontractor of the company that laid him off.  His intellectual capital is fast becoming an asset of China.  But hey, this huge corp is saving a buck.

Innovation comes from experiencing problems, so Roberts goes too far saying "you can't innovate if you don't make."  Innovation is customer driven. But truly the manufacturers contribute a lot to advancing innovation with their expertise and input.  Check out the history of apple, and see how their leaps forward occurred when manufacturers overseas designed a product for Apple, especially Apple's laptop, the macbook.

 http://oldcomputers.net/

Ultimately the customers call the shots. We all just contribute to a solution: the entrepreneur, the factory, the sales force.  It is ungainly to have your manufacturer overseas when your goal is to satisfy customer demand, but such is the distortion as a result of our monetary policy that we import so much (and export the wrong stuff.).  Certainly by moving so much manufacturing overseas domestic ability to innovate has atrophied, so we are becoming ever more dependent on the kindness of strangers.

Andy Grove made his money selling to government, he's a welfare queen, so I would not trust anything he has got to say.  And again, there is no Spiers method. I am just passing on what I was taught by my betters, what proved true for me too.  As a sideline I am trying to find out if it is true in all places and time. 

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