Making things and the future of the U.S. economy, A Reading List

I have been very absorbed in what (finally) seems to be an accelerating conversation in the media about the future of the U.S. economy. The catalyst is the budget story in Congress but even more, the fact that the recovery doesn’t feel that strong. And the fundamentals are still pretty scary.

U.S. policy and business practice have not focused on the role of manufacturing in our economy. I think there is a lot here we need to understand. Here’s my recent reading list on this subject: Read more

Intangibles Are the New Raw Materials

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Raw Materials
In the tangible economy, raw materials are combined and sometimes transformed to make finished goods. It is often impossible to see the different raw materials in the finished product—together, they make something completely new. In fact, there is often a progression of processes that lead to a final product. Stalks of wheat, for example, are processed and ground to make flour which then goes into making bread. Grains of sand become silicon in computer chips and oil becomes a high tech plastic.
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The raw materials of the knowledge era are knowledge-based intangibles. You may be nodding your head as you read this. But do you really know what it means? If not, you are not alone. Knowledge continues to be seen as an amorphous, misunderstood part of business. This widespread ignorance isn’t helped by the vocabulary. The word intangibles itself is troubling because its very definition implies that an intangible is invisible, untouchable, and unknowable. The word knowledge is also very general and lacks a specific connotation for business value creation. Yet knowledge is the core asset of this century. Read more

IC and Manufacturing

For a long time, intangible capital has been seen as some abstract and theoretical concept. Indeed, many people call it intellectual capital (here’s why we don’t use the term intellectual capital). But I spend a lot of my day every day refuting this. Intangible capital is very real and very practical. It drives how and why businesses get paid by their customers.

There were two great explanations of the practical side of IC in discussions of manufacturing in the past week. Read more

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. Read more