Interview With Willy Shih and Gary Pisano

(Photo Credit: Nyoyn’s photostream)

Forbes India has published an interview with Willy Shih. Shih co-authored a 2009 paper in the Harvard Business Review called, “Restoring American Competitiveness.”

The authors argue that “innovation” cannot be separated from “manufacturing.”

Here is a snippent from the interview:

For any individual company, it is often better, in the short or intermediate term, to outsource production to an overseas supplier. The company can buy manufacturing services at a much lower rate if it goes to China or elsewhere, depending on the industry.

But if everybody is doing that, you get a general erosion of the economy, which could lead to a decline in the standard of living. An individual company, though, can move assets anywhere. So companies can reward their shareholders regardless of what happens to the national economy. As a result, the interest of companies and the country have diverged.

Shih: I’ll give you a historical example. In the semiconductor industry, outside of Intel and a few smaller players, most U.S. semiconductor manufacturing has moved offshore to places like Taiwan, Singapore, South Korea, and increasingly China. As more and more capability moved offshore, other industries in the host countries have benefited from the semiconductor manufacturers’ capabilities. It’s no coincidence that the entire flat-panel display industry emerged from semiconductor industry capabilities. The people who built the factories to make semiconductors used that knowledge to build factories to make flat-panel displays.

The next thing to watch is the replacement of the incandescent lighbulb. The lighting industry is moving to LED technology at a very high speed. And all the LED lighting companies draw on the same capabilities that emerged in the flat-panel display and the semiconductor industries. So the world’s supply of high-efficiency lighting will be from those same regions of the world, primarily Taiwan, South Korea, and China.

The full interview can be read here.

– The Editors