Why American Manufacturing Rocks
A slowdown in hiring ... a faltering stock market ... high gasoline and food prices ... depressed home sales ... the bad economic news in the U.S. has piled up over the past few weeks. But earlier this month came a ray of good news: the U.S. Commerce Department reported that exports of goods and services hit a record high of $175.6 billion for the month of April. And nearly three-quarters of that amount ($126.4 billion) were goods made in America.
Why are American manufacturing and exports on the rebound? One reason for the rising exports is the falling value of the U.S. dollar compared to most major currencies that has helped make U.S. goods less expensive overseas. And many factories overseas that relied on Japan as a supplier have had to look for alternatives after Japan's earthquake and tsunami in March.
At the core, however, is a steady strengthening of American manufacturing, particularly since the 2008-2009 recession, that transcends currency fluctuations or supply-chain disruptions. In fact, the value of goods exports has gone up by more than half since April 2009.
One factor behind the renewed growth in U.S. manufacturing is the stronger connection between academic research and businesses, particularly small businesses. Federal law, the Bayh-Dole Act of 1980, gives universities and institutes ownership of the intellectual property from federally-funded academic research. The institutions, in turn, often encourage researchers to commercialize their findings by starting their own small businesses.
A good example of this process of converting academic research into an innovative product is 1366 Technologies in Lexington, Massachusetts. The company has developed new methods for making silicon wafers used in photovoltaic solar panels. Those methods were first developed in research labs at MIT, where engineering professor Emanuel Sachs, with entrepreneur Frank van Mierlo, started the company to turn that research into a marketable product.
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