A Presentation of the Issues and Solution in "Restoring American Competitiveness" in by Pisano and Shih

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According to the article “Restoring American Competitiveness” by Gary P. Pisano and Willy C. Shih, the United States industries have worn down competition through the damages from outsourcing manufacturing. There are several issues that have caused serious problems to the U.S. economy, which are the decline of trade due to shortage of innovation and competition, lack of funding for research and development by government and businesses, and poor financial decisions made by management for outsourcing. There are several recommendations that the government and business executives can do to rebuild U.S. industries.
The U.S. industries have been outsourcing manufacturing for several decades now. U.S. companies thought they were reducing costs
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As a result, neither government nor main corporations are providing for long-term research and development funding.
For making outsourcing decisions, management increased short-term cost benefits, while cutting their spending in fundamental research. These executives where listening to business leader and Wall Street’s advice to “focus on your core competencies, off-load your low-value-added activities, and redeploy the savings to innovation, the true source of your competitive advantage” (2009). Their manager were saying that they could go back to their original plan if the quality or work did not meet their standards, if the expected cost savings were justified, if supply-chain risks were extreme, or if the work was too complicated. Management’s poor decisions did not foresee the damage that outsourcing had caused, since they were more interested on the payoffs they were getting.
There are three recommendations for government officials to help U.S. industries to bring back innovation and manufacturing of high-tech products. The first recommendation is to go back to funding innovative activities, such as basic scientific research, applied research, and commercial research and development. These types of researches can aid scientist to comprehend genetic mechanisms, to find the knowledge to
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