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Fuchs drew similar lessons from a case study on the automotive industry, where cars made with polymer composite bodies are far lighter and thus consume less gasoline than cars with conventional steel bodies. Producing the new composite bodies could be competitive with the prevailing technology when the manufacturing was done in the United States. But in China, the newer technology is more expensive to make than the prevailing one. Her analysis shows, for example, that assembly accounts for more of the cost in steel bodies than composite bodies, and assembly is cheaper in China than in the United States. In composite automotive parts, material costs dominate, and there China lost its advantages.

Of course, consumers in different countries tend to prefer different types of cars, and those preferences can also help determine which technology is most economically attractive for local manufacturers. But surprisingly, says Fuchs, she found that manufacturing variables were far more significant than consumer preferences in determining the economic viability of the automotive technologies.

What happens to emerging technologies when manufacturers abandon them? Where do the engineers who worked on the newer technologies go? Can new companies sprout up in developed countries to exploit the newer technologies? Fuchs is beginning to look at those questions. Much of the responsibility for commercializing the emerging technologies will fall to small firms, supported by venture capital and government funding. But it’s unclear whether those companies can compete in the short term with larger, multinational firms pursuing older technologies that are currently more cost-effective. “Does our innovation ecosystem have a way to push the new technology forward anyway—to have inventors move to new places and pick up the technologies, or to have other firms pick up the new technologies?” she asks.

But Fuchs also says her research suggests there are plenty of opportunities for businesses that learn how to take advantage of regional and national differences to match technologies with manufacturing locations. In this globalized world, “we have to understand national differences and what they mean for the economic viabilities of emerging technologies,” she says. “And we have to learn to integrate [these national differences] into new technology development, not just from the market side but also from the production side.”

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Credit: Ken Andreyo / Carnegie Mellon University

Tagged: Business, Business Impact, Advanced Manufacturing

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