The Impact of Offshore Manufacturing on Technology Innovation: Implications for U.S. Policy
Economists have long focused on how offshoring manufacturing can result in lower prices, as low wage nations are able to produce products more cheaply than in the United States. But until now, very little effort has been made to understand the impact of offshoring on innovation. However a new study by Carnegie Mellon Professor Erica Fuchs examines the impact of offshore manufacturing on innovation, using the photonics and automobile industries as case studies. She examines the impact of offshoring the production of photonics and automobiles to China on not just costs of production, but on the impacts on innovation and the development of next generation technology systems. The ITIF Forum will feature a discussion of the implications of offshoring on innovation and the kinds of policies the U.S. government can put in place to ensure continued robust technological innovation and U.S. competitiveness.