The U.S. industrial design sector accounts for only a tiny fragment of domestic producer service employment, yet its importance to the U.S. manufacturing base is arguably disproportionate to its size. With only around 12,000 workers spread across 1800+ establishments, most firms in this sector are micro-businesses that employ fewer than ten people (U.S. Census Bureau 2007). Few consultancies have more than one business location, and most are single-person units. According to the latest data from the U.S. Census Bureau, around 73 per cent of U.S. industrial design companies in 2005 had between one and four employees.

This article examines the extent to which US producers of durable goods outsource design and development work to external organizations. Evidence from a sample of sixty-eight large manufacturing companies suggests that independent design consultancies and other design service vendors contribute significantly to the product development efforts of major corporations. External organizations are increasingly expected to deliver innovative design solutions with respect to materials selection, aesthetics, ergonomics, product performance, and ease of manufacture. These vendors vary from single-person establishments to firms that employ over 500 people. We find that the outsourcing of industrial design has been driven primarily by the ability of external companies to offer innovative services that complement the core competencies of client firms. Our data also point to the rising importance of design service imports, notably from the United Kingdom, France, and Italy. Such imports currently account for about 35 percent of externalized design expenditures, compared to less than 15 percent ten years ago.

This paper examines China's emerging industrial and international trade potential within the commercial aerospace sector. Decades of industrial offset agreements between Western aerospace companies and Chinese subcontractors have endowed China with the technological fundamentals required to build commercial passenger jets. These offset agreements were designed to secure sales of Western-built aircraft to China, and often involved critical streams of knowledge transfer from prime contractors to Chinese suppliers. By now, China has acquired virtually all of the technological know-how to enter the commercial aircraft market on an internationally competitive basis. The implications for Western producers are presumably not bright, as China's unit costs are extraordinarily low. Further, it is clear that China's first regional jet has been designed to lead to a replacement for the Boeing 737. Looking to the future, I contend that China will challenge Airbus and Boeing in the market for medium-to-large passenger jets by the mid-2020s.

ABSTRACT This paper documents the results of a twelve‐year tracking study of New York State (NYS) manufacturers of scientific instruments (1994–2005). The main goal of the tracking exercise was to probe for firm‐level changes in the use of external producer services, notably in technical fields such as industrial design, contract research, and engineering. Another goal was to assess the extent to which these outside inputs have been contributing to the product innovation efforts of users. The results show that innovation and service utilization rates have converged across NYS's three major regions (i.e., Western New York, Upstate/Central, and the New York City metropolitan area). This convergence has been powered by Internet‐based technologies, as well as by strategic management change at the company level. The link between recourse to external technical help and successful innovation is found to be statistically stronger in 2005 than it was twelve years ago. Of special importance is the fact that a growing number of manufacturers have been outsourcing research, design, and product development activities at levels that far exceed those reported in the 1990s. The paper concludes with a brief discussion of the implications of these trends for the geography of innovation within high‐technology sectors.

This article examines the impact of the 2002 U.S. Bio-terrorism Act (BTA) upon Canadian exporters of food products to the United States. A major goal of the BTA is to secure U.S. ports of entry against imports that might threaten the health or safety of U.S. citizens. Although this is a respectable goal, data from a sample of 144 Canadian exporters suggest that the BTA represents a non-tariff barrier to Canada-U.S. trade. Current regulatory procedures have disrupted cross-border supply chains in significant ways. These disruptions have damaged the Canada-U.S. commercial relationship by imposing extra shipment and distribution costs upon Canadian exporters. These delays have had a serious impact upon small-to-medium sized firms (SMFs). The article concludes with a brief discussion of possible remedial actions that might be taken by Canadian exporters.

Using surveys, on-site interviews of approximately 225 publicly-traded pharmaceutical firms in the United States, and a matching dataset with 42,849 observations of pharmaceutical patent citations, we combine both quantitative and qualitative research methods to investigate the relations between geographic proximity to innovation resources and stock returns. We develop a geographic innovation index to capture the key geographic factors that might have a positive impact on the firm's knowledge creation. We then examine the stock investment performance in terms of risk-adjusted returns for companies that have greater proximity to geographic innovation resources versus those companies that have less proximity to geographic innovation resources. We find that investments in companies with greater proximity to geographic innovation resources tend to achieve better risk-adjusted returns in the stock markets.

This paper examines the technological and business characteristics of US companies in the industrial design sector. Evidence from a survey of 85 design consultancies suggests that this sector has become increasingly export-active, technologically innovative and researchoriented. The vast majority of design firms are small-to-medium-sized enterprises (SMEs) that employ fewer than 20 workers. These firms supply critical innovation inputs to their clients. Potential benefits to users include reduced defect rates for new products, optimized ergonomics, aesthetic superiority, ease of manufacture and improved product performance. However, at least two problems can be anticipated for this sector over the next few years. First, domestic service vendors may soon experience significant foreign competition. Second, the de-industrialization of the US manufacturing base suggests that foreign export markets will eventually become important to the survival of US design firms. Our data suggest that export-oriented design companies exhibit stronger business performance than their domestically-focused counterparts, notably in terms of sales growth, employment creation, research spending and profitability. Most importantly, business performance is associated with investment in human capital, technology upgrades and the provision of contract R&D services.

This paper assesses the competitive factors associated with company growth in the US industrial design sector. This small but technologically advanced sector delivers critical innovation inputs to firms that produce durable goods. Evidence from a survey of 85 US design companies suggests that competitive success hinges upon service diversity. Specifically, the most commercially buoyant companies have diversified their service offerings beyond product or component design. These firms have developed strategic competencies in fields such as contract research, prototype development, product testing, technological forecasting, market analysis and even advertising. Although most US design companies are small-to-medium-sized enterprises, successful firms do not differ from their less successful counterparts in terms of employment size, occupational structure, regional location or market focus ( client sectors). Instead, the key differences lie in service diversity and the quality of human capital. The paper concludes with a brief discussion of the implications of the empirical findings for future research on the dynamics of the design industry.

Growth and ChangeVolume 39, Issue 3 p. 517-520 Remaking Regional Economies: Power, Labor and Firm Strategies in the Knowledge Economy – By Susan Christopherson and Jennifer Clark Alan MacPherson, Alan MacPherson Canada-United States Trade CenterUniversity at BuffaloEmail: [email protected]Search for more papers by this author Alan MacPherson, Alan MacPherson Canada-United States Trade CenterUniversity at BuffaloEmail: [email protected]Search for more papers by this author First published: 12 August 2008 https://doi.org/10.1111/j.1468-2257.2008.00436.xRead the full textAboutPDF ToolsRequest permissionExport citationAdd to favoritesTrack citation ShareShare Give accessShare full text accessShare full-text accessPlease review our Terms and Conditions of Use and check box below to share full-text version of article.I have read and accept the Wiley Online Library Terms and Conditions of UseShareable LinkUse the link below to share a full-text version of this article with your friends and colleagues. Learn more.Copy URL Volume39, Issue3September 2008Pages 517-520 RelatedInformation

Japanese firms have become increasingly important first-tier suppliers to the U.S. commercial aircraft industry (large passenger jets). Over time, this relationship has evolved from a simple “build to print” subcontractor arrangement to a turnkey “design and build” risk-sharing partnership. Using the Boeing 767, 777, and 787 as examples, we argue that the motives for Boeing’s commercial outsourcing to Japan are to access the Japanese market, spread risk, gain access to capital, and lower U.S. spending on research and development (R&D). This has clear implications for U.S. trade and employment, in that Japanese-subcontracting boosts foreign imports and reduces the need for domestic production workers and U.S. suppliers. From a trade perspective, however, a troubling feature of allowing the Japanese to produce large commercial aircraft subassemblies is that major Japanese public financial supports are involved which contravene existing international agreements on production subsidies. We review the types of production contracts that Japanese companies have sought on the Boeing 767, 777, and 787 programs. These contracts have allowed the Japanese to develop new capabilities in terms of production capacity, tooling, design, and final assembly. Ultimately, these capabilities imply that Japan will eventually enter the market as a fully-fledged producer of commercial aircraft. This does not bode well for the U.S. commercial aerospace sector.

Despite a promising report in 2000, the machine toolindustry in the Unites States appears to be declining.This articleexamines the extent of this decline and steps that may prove beneficial inattempting to recover from this downward trend. A survey in 2000 found thatlabor availability, import competition, and demand cyclicality were the threemost concerning competitive problems for U.S. machine tool producers. Data for this study were collected as a follow-up to the 2000survey.Only 66 of the original 104 companies surveyed were still involvedin the machine tool industry.Results indicate that the problems cited inthe 2000 survey resurfaced but at a higher rate of concern.Further, themore export-intensive firms are shown to have a higher likelihood of positiveinnovation and job creation.Sustained export development is a key factorin a firm's survival. The firms that have survived have placed emphasis on research anddevelopment (R&D) and have looked for customers over a wide geographicarea.Addressing the problems with human capital and price wars arecritical to the success of the machine tool firms.Focus for these U.S.firms should be on creating innovative products, providing high service levels,and exploring new markets. (SRD)

After several decades of decline, the US machine tool (MT) industry entered a modest period of recovery in the mid-1990s. With the slowdown of the global economy in the early 2000s, however, this recovery has stalled. By now, there are clear signs that rates of firm exit are increasing. This paper compares the results of a survey of MT producers (conducted in 2000) with more recent industry data (2004). Four years after the optimistic findings of the 2000 survey were reported, we find that many of the small-to-medium sized producers have either ceased operations or have downscaled substantially. While virtually every US manufacturer of MT products has been negatively affected by the global economic downswing, adverse business conditions have had a disproportionately severe impact upon firms that cater primarily to local markets. MT manufacturers located within the nation's traditional industrial heartland have been the hardest hit, notably as a result of rising import competition. In contrast to locally-oriented producers, our findings suggest that a small number of innovative MT companies have been faring quite well as a result of continued export development. The paper concludes with a brief discussion of several futures for the domestic MT sector.

Geographical indications are legal signs which identify a good as originating in a specific country or region, where the reputation of the product is attributable to its geographical roots. South Korea has operated with a geographical indication system since 1999. This research analyses the regional impacts of geographical indications using the case study of 'Boseong' green tea. The results show that geographical indication has enhanced the image of the product, leading to increased production and the stimulation of tea-related industries. We argue that geographical indication can be used as an effective policy to cope with trade liberalisation.

This paper examines the relationship between Asian firms’ technological and non-technological strategies and innovation capability. Particular attention is focused on subsidiaries in the United States (US) with headquarter units in South Korea, Singapore, and Taiwan. Empirical evidence from a sample of 151 subsidiary plants and establishments suggests that Asian firms invest in the US to upgrade their their knowledge base with a view to supporting new product and market-based innovations. The results of an ordered probit regression model of innovation performance suggests that new product development and marketing capability make a significant contribution to increased US patents among Asian firms while applied research is only marginally significant in explaining firms’ innovation capability. The major sources of innovation capability are revolved around a tacit understanding of technology and products than more explicit forms of knowledge. Our empirical findings also suggest that stronger business performance is associated with new product development and marketing capability.

This paper investigates the role of university-based industrial extension services in the business performance of small manufacturing firms in an economically declining region of the United States (Western New York). The outreach initiatives of a specific University at Buffalo (UB) programme are described. Particular attention is given to the activities of UB's Centre for Industrial Effectiveness (CIE), an outreach unit with a mandate to improve the product and/or process development efforts of local manufacturing firms. Our data suggest positive returns on investment for firms that have sought technical support under CIE programmes. A key finding is that CIE's services typically entail the transmission of well-established procedures rather than radically new ways of doing things. A further finding is that firms that have used CIE to develop improved products have experienced stronger investment returns than their counterparts that have focused upon process development (although the returns are positive in both instances). More broadly, our data suggest positive correlations between levels of project investment and a variety of commercial outcomes, including sales growth, job-retention, and unit-cost reduction. The implications of these results for regional economic development policy are discussed. The paper also reviews some of the weaknesses that curtail the effectiveness of university-based centres such as CIE.

This paper adopts a resource-based view (RBV) to illuminate the technology and/or innovation acquisition processes of Taiwanese and South Korean firms that have invested directly in the United States (US). Specifically, it shows that inward investment to the US by Asian firms reflects a strategy of resource renewal and expansion. Further technological resource acquisition is driven by a reverse product cycle model that emphasizes incremental innovations. Survey data from a sample of Taiwanese and South Korean firms points to significant differences in the technology acquisition processes that characterize these Asian investors. The US appears to be a more important source of knowledge for resource acquisition among Taiwanese firms (these firms are typically smaller and younger than their South Korean counterparts). Further, ordered probit regression reveals that Taiwanese firms are more likely to develop technological competency from local basic research, whereas South Korean firms are more likely to build technological competency from applied research and market-derived knowledge. For reasons we discuss in the concluding section, it is unclear if such a strategy of resource acquisition will lead to long-term competitive advantage on a sustained basis.

This paper examines the effects of geographic sources of competitive advantage on firm value among publicly traded pharmaceutical companies in the United States. A central argument is that firm value responds positively to geographic factors. We hypothesize that firm value is influenced by the degree of industry clustering, university and industrial R&D spending, the presence of related or supporting industries, and the proximity of competitors. The empirical results lend support to our hypotheses. Even after controlling for the firm value determinants used by Fama and French (1998), geographic variables explain a significant part of the cross-sectional variation in firm value.