Using Intellectual Capital to Build Two Kinds of Factories

Yesterday, I drove my mother to the airport in Providence RI after a vacation on Cape Cod. The route from Cape Cod to Providence is a mini-history lesson. You pass through New Bedford which has been a fishing hub for centuries–and still is. You pass  through Fall River which has dozens of shuttered factories built during the industrial era. There is still some manufacturing going on there. But it doesn’t look very prosperous. Of course, neither is our country. We never really replaced all the jobs that those factories created in the last couple centuries.

I have been thinking about manufacturing a lot lately. Because I am increasingly convinced that it is the key to an economic recovery. But not like those old factories in Fall River. A whole new kind of manufacturing.

We know that we live at the juncture between the industrial and the knowledge economies. For the past few decades, we have made the assumption that having an “advanced” economy means that it’s OK to outsource all our manufacturing to poorer countries. A knowledge economy, the logic goes, has “higher” level jobs that create new industries.

But there is more to the story. I have pointed out in posts on American industry, we need to start over again with our approach to so many industries. My friend, Ken Jarboe at the Athena Alliance, has had a great series of posts on manufacturing. And this week, Robert Kuttner had great post called Smoking the Green Shoots where he said:

The last time we had a massive financial meltdown like this, it took the hyper-stimulus of a war – World War II – to recapitalize industry and re-employ workers.

What, then, is the moral equivalent of war for the 21st century? Let’s think way, way outside the box.

We might begin with a serious strategy for rebuilding American manufacturing. American corporations and politicians have been cavalier about just letting manufacturing go. Uniquely among advanced and developing nations, we have no national strategy for nurturing manufacturing at home. There’s even an office in the Commerce Department that helps companies outsource.

As a result, even a modest uptick in purchasing power will not produce enough American jobs because there are so many things that America no longer makes.

We could start with clean energy, and move on to mass transit, and reclaim America’s capacity to make things. Right now, even if we massively shifted to wind and solar energy, other nations would get most of the production jobs because most solar panels and wind turbines are not made here, while Americans would just get the temporary installation jobs.

I couldn’t agree more. But please do not assume that creating manufacturing jobs will be a repeat of the industrial era. Because this time we will do it–we must do it–in completely new ways. That use sustainable practices and create completely recyclable products that solve our energy, health and

The only way to build this new kind of factory  is to also build an intellectual capital factory that uses knowledge and information to create a continuous cycle of innovation and improvement. The physical factory contains machines that help create products. The intellectual capital factory contains people, knowledge and networks that fuel the physical factory.

We need both kinds of factories to solve our economic and social challenges. The good news is that we have the capability to do it. Do we have the will?

Build your own intellectual capital factory to get started.