CHAPTER 4
When Is Manufacturing Critical to Innovation?
The role that manufacturing plays in the economic well-being of a country has been the subject of a long-running debate among policy makers, scholars, and business executives. As we pointed out earlier, there is a large camp that contends that as long as Americans are doing the design and R&D (the high-value-added stuff), manufacturing is irrelevant. According to this line of thinking, the United States has a comparative advantage in innovation, and therefore it makes perfect economic sense to let other countries (or, to be more precise, workers in other countries) do the manufacturing. They argue that Americans are the entrepreneurs and the innovators; that’s their comparative advantage, ...
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