Creating an Economy That’s 'Built to Last'

President Obama is right: America’s long-term success hinges on its ability to invent technology the world wants. It seems simple, but getting America back in the business of making things isn’t. It’s a global process. An idea born in Silicon Valley could be engineered in Switzerland, tested in China, and assembled in Taiwan. A stimulus to boost manufacturing may help the U.S. economy in the short term, but reinvigorating postwar-style production or space-race ingenuity is impossible without an increasingly capable workforce. Business demands it. And without it, long-term success will remain elusive.

These days manufacturing extends far beyond the assembly line. It’s about inventing and solving problems: researching, testing, and experimenting with ideas and technology. The development of new products more and more defies borders. It’s impossible to make electronic goods exclusively on U.S. or U.K. soil—the supplier base, infrastructure, and often the expertise needed to produce everything from electric cars to solar panels is dispersed.

Within that context, it’s easier to understand why highly skilled jobs are going the way of assembly and manufacture. New research by the National Science Foundation (NSF) reports that more companies are taking research and development—and 85 percent of the new jobs it creates—overseas. Still, this is by no means a one-way street. As Caterpillar shifts some R&D abroad, it’s considering moving parts of its manufacturing operations back to the U.S. Creating new products is no longer one size fits all.

But constructing an economy that’s built to last depends on a ready supply of talented individuals: people who invent, create, and develop the ideas that will drive exports and those who can assemble them. China gets it. To make its economy more knowledge and technology intensive, China is investing heavily in science and engineering education, infrastructure, and R&D support. Already wages are increasing, the middle class is growing, and the country is developing new technology rather than just assembling products. And while the U.S. continues to file more patents than any other country, the Far East’s investment in R&D, fueled by China, matched U.S. contributions in 2009, according to the National Science Board’s report, Science and Engineering Indicators 2012.


To compete, the U.S., like the U.K., needs more engineers and scientists. But of the world’s engineering graduates, less than 4 percent of degrees are earned in the U.S. vs. 56 percent in Asia, says a report from the NSF. It’s no wonder such companies as Airbus, 3M, and Caterpillar are looking East for R&D talent.

At my company, Dyson, we’re in the process of doubling the size of our U.K. R&D team to 750, but we don’t have enough qualified people to fill the specialized roles we need. While we carry out R&D of new technologies, we’re increasingly dependent on a combination of engineers at home and abroad to get our machines to market.

Greater job training and partnerships between academia and industry are a step in the right direction. Currently half of U.S. science and engineering degrees go to students from outside the country’s borders. Why train brilliant minds simply to send them home again? In his State of the Union address, President Obama acknowledged that it’s these individuals who will invent new products, start small businesses, and create new jobs.


But long-term success demands more. Government must invest in science and engineering education at an early age. And for homegrown talent, getting young people to be creative, test their ideas, and solve problems—rather than learning by rote—would help inspire and enthuse. More practical science experiments and innovative hands-on engineering classes, combined with more consistent STEM (science, technology, engineering, and mathematics) teacher development, would help reinvigorate interest in subjects children too often give up on.

Manufacturing isn’t about us and them anymore. To safeguard it while creating future jobs, the U.S. needs to invest in a highly educated workforce and allow inventive companies, new and old, to thrive. Countries such as Singapore, where we make high-speed digital motors for our appliances, gear their education systems to better suit the progressively high-tech nature of their economy.

Both the U.K. and the U.S. could offer greater financial incentives for promising students to study STEM subjects and help plug a growing gap. Better career advice—engineering is both highly rewarding and well paid—and more readily available industrial scholarships and experience would ensure that more of these students apply their knowledge to invention.

To make the most of this talent, innovative small businesses should be prioritized when it comes to higher tax relief and lending. These companies often come with bigger risks—R&D is expensive and time consuming—but greater potential rewards. And R&D tax credits are essential: They support creative businesses of all sizes without forcing the government to pick winners.

It’s not possible to follow the old method of making what worked in the past. New economies and customers are emerging, supplies and suppliers are shifting, and talent can’t be treated territorially. The U.S. should embrace the changing nature of manufacturing while investing in the bright minds that will deliver on its long-term potential.