There is broad agreement that technological innovation must continue in order for the US to regain global competitiveness in strategic sectors like manufacturing. But a formula for fostering innovation remains elusive for companies across electronics industry sectors ranging from product designers to contract manufacturers and distributors, as well as among startups and established players.
Representatives from each of these sectors tackled the innovation question during the DESIGN West conference and exhibition, held in San Jose, Calif., last week. Among the issues they debated is what role if any the government should play in fostering innovation.
“Innovation isn’t dead, it’s just moved around a bit, so you have to understand where it is and how it works,” said James Truchard, founder and CEO of National Instruments. Where it can be found, Truchard argued, is in emerging ecosystems like the Apple iOS mobile platform, where an estimated 1 billion apps have so far been built. “Ecosystems play a big role, and understanding those ecosystems and what role they’re playing is very important to see that innovation stays alive and well.”
In the case of an established company like National Instruments, Truchard said, technology innovation has shifted from instrumentation based on vacuum tubes 35 years ago to pervasive software today. The test, measurement, and embedded systems company has been focusing on delivering “off-the-shelf ecosystems.”
Domestic contract manufacturers of electronics that survived the exodus of US manufacturing to Asia have tended to be smaller, nimble companies able to adjust to varying manufacturing volumes. Some of those companies are starting to retool in hopes of offering higher-volume manufacturing. Richard Szczepkowski, president of the contract manufacturer Swemco, said his company installed new manufacturing equipment nine months ago in an attempt to move from low- to mid-volume production. The goal was “to see if we can’t bring [electronics manufacturing] back from overseas,” he said.
While it remains difficult to persuade companies with overseas manufacturing operations to pull up stakes and bring work back to the US, Szczepkowski said he is betting that US contract manufacturers can grab a larger share of future medium- and high-volume production once they manage to upgrade their facilities and implement “lean” manufacturing approaches that will help them compete against Asian rivals.