Job losses threaten US innovation

Long-term reductions in the work force have damaged the United States' capacity to innovate and harmed the prospects for long-term economic growth, experts say. Economists and business leaders say 30 years of manufacturing job losses have had an effect far beyond industries like automobile manufacturing and steel production, The New York Times reported. "In sector after sector, we've lost our innovation edge because we don't produce goods here anymore," said Mitzi Montoya, dean of the college of technology and innovation at Arizona State University. The losses are particularly troubling because it isn't always just low-level manufacturing jobs that are lost but positions in research and development that can yield long-term benefits to the economy, experts said. "Outsourcing has not stopped with low-value tasks like simple assembly or circuit-board stuffing," Willy C. Shih and Gary P. Pisano of the Harvard Business School have written. "Sophisticated engineering and manufacturing capabilities that underpin innovation in a wide range of products have been rapidly leaving, too." "Other nations are competing intensely to create an attractive business and regulatory environment for manufacturing firms" said James Manyika, director of the McKinsey Global Institute, in a report of innovation's importance in manufacturing. "The United States just hasn't done this as aggressively as other countries have." The White House has acknowledged the risk of the United States falling behind in fast-growing industries and areas of cutting-edge technology, the Times said. "A vibrant manufacturing sector is inextricably linked to our capacity as a nation to innovate," a White House report earlier this year said, advocating investments and efforts to return manufacturing and keep it in the United States.