Working Paper: NBER ID: w22552
Authors: Susan Helper; Jennifer Kuan
Abstract: The questions addressed in this volume are motivated by the recognition that engineers play an important role in generating innovation and economic growth. In this chapter, we seek to offer some description of engineering work by looking in detail at a specific manufacturing industry—firms that supply automakers—to gain insight into how engineers create innovation. Autos account for 5% of US GDP and in 2011, 70% of auto suppliers contributed design effort, a task typically performed by engineers, making the auto supply chain an important context in which to study engineering and innovation.\n\nSome highlights from our original survey data include a wide range in terms of size and strategies of supply chain companies; a majority was small- to medium-sized, often family-owned. We observed barriers to patenting for manufacturing firms developing process rather than product innovations. And interviews revealed the importance of customers for the innovative efforts of supplier firms. Certain Japanese customers were preferred because they shared expertise and helped suppliers improve, while other, American, customers were viewed as having unreasonable demands for regular, incremental price reductions and did not offer technical or organizational support.
Keywords: automotive supply chain; innovation; engineering; customer interactions; process improvements
JEL Codes: D2; L23; L62
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| engineering activities (Q49) | innovation outcomes (O36) |
| engineers (R42) | innovation through incremental improvements (O35) |
| customer interactions (Japanese firms) (L14) | innovation outcomes (O36) |
| customer interactions (American firms) (L14) | innovation outcomes (O36) |
| engineering practices (L79) | capacity for innovation (O36) |
| barriers to patenting (O34) | redefining innovation (O35) |
| firms with fewer than 500 employees (M13) | innovative activities (O35) |