The Internet contains some amazing videos that showcase the innovations Germany has made in manufacturing. Immense robot-like machines produce precision automobiles, sophisticated railway cars, aircraft parts and a variety of other heavy-duty industrial goods.
Additional videos and stories outline how German engineering resulted in the invention of the MP3 audio format, thousands of innovative optical devices and tens of thousands of other groundbreaking inventions. It is interesting to note that many of these success stories are not the result of work or investment by massive companies, but rather by small to intermediate-sized firms.
American engineering and manufacturing remain among our greatest national assets. Yet, there is cause for concern. Lawrence H. Summers, former Treasury secretary in the Clinton administration and a Harvard University economist, reminds us that “already the number of people doing production work in manufacturing and the number of people on disability are comparable.” Therefore, America can learn some lessons from the German experience. These lessons generally fall into three categories.
Germany has managed to successfully combine innovation, engineering and manufacturing into a seamless structure that occurs mostly within its borders. Despite relatively high labor costs, Germany continues to be a successful manufacturer. Its ability to design and manufacture in single facilities enhances quality production and control, according to a recent article in The Wall Street Journal.
We are fortunate that Northeastern Pennsylvania has a number of companies that meet rigorous international requirements by designing and manufacturing their high-quality products. Diamond Manufacturing, Pride Mobility, Intermetro, Pulverman Precision Metal Components, Medico Industries, Keystone Automation and Coates Toners are a few examples. Their numbers, however, are not growing at the same rate as similar German companies.
One of the reasons for Germany’s success is that it enjoys an innovation network that is second to none in the world. The Fraunhofer Society is a network of quasi-government-sponsored institutes that work with small and medium-sized companies and universities to develop manufacturing technologies. By working with universities, Fraunhofer is able to translate the latest research advancements into manufacturing innovation. Fraunhofer has helped build Germany into a manufacturing powerhouse and an “exporting juggernaut,” according to Sujal Shivakumar, a specialist in innovation policy at the National Academies in Washington, D.C.
The Fraunhofer Society is larger, but not unlike the Ben Franklin Technology Partners in Pennsylvania that operates four regional offices. Ben Franklin works hand in glove with startup and established companies and universities to find technical expertise and networks to enhance innovation.
A final component of Germany’s manufacturing success is its long-lived system of apprenticeships. Students with acumen for manufacturing are identified relatively early in the German educational system. Following their technically focused high school education they enter apprenticeships in plants and design facilities. These apprenticeships combine applied learning with hands-on skill development. They give young Germans the opportunity to develop their expertise, work habits and skills that make them ideal employees for small and medium-sized engineering and manufacturing firms.
By and large, the United States does not enjoy a comparable apprenticeship program. We do have community colleges and colleges with cooperative programs that in some small ways mirror the German phenomenon, but they are relatively few and far between.
Above all else, the United States does not have a well-organized method for creating innovative designs and manufacturing. The Fraunhofer Institutes’ ability to combine engineering professionals, who have years of industrial experience, with Ph.D. researchers and students has helped to create innovative companies. This system also helps to populate these companies with young professionals, fresh from lengthy apprenticeship experiences, who are ready to work.
President Obama recently requested $1 billion from Congress to help fund a nationwide network of research institutes similar to Fraunhofer. It is a good idea in theory, but without careful thought and significant advice from those already in the field, such as Ben Franklin, and without a true system of apprenticeships, it also has the potential to become one more federal government boondoggle.
Let’s hope that those involved in this prospective new Obama administration initiative do their homework. They need to learn from those who already know how to stimulate innovation in design and manufacturing. The Ben Franklin experience can be helpful, but so too can the German model. It appears that our European allies have the process of creating wealth through innovative design and manufacturing down pat.
Michael A. MacDowell is president emeritus of Misericordia University in Dallas Township. He currently is the managing director of the Calvin. K. Kazanjian Economics Foundation.