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For years, many U.S.-based manufacturers have operated under the belief they have the world's most innovative technologies, processes and programs. However, findings in the 2015 RSM Manufacturing & Distribution Monitor survey illustrate that U.S. manufacturers and distributors trail their global counterparts in many key areas that fuel innovation and in turn, business growth.
While the percentage of U.S.-based manufacturers reporting a strong culture of innovation was slightly higher than the full non-U.S. sample, 40 percent of Asia-Pacific manufacturing leaders say their companies excel in this regard. That's slightly higher than the region-specific indices for the United States (38 percent), Europe (34 percent) and Latin America (27 percent) (Figure 1).
In addition, 41 percent of thriving companies overall report a strong innovation culture, which is more than 8 percentage points higher than manufacturers who say they are holding steady or declining.
These are some of the findings from the 2015 Monitor and the insights of RSM's professionals regarding the issues and strategies driving global growth for middle-market companies. Participants were primarily C-level executives, of whom 65 percent represent companies based in the United States, with the remainder from companies based throughout Asia, Europe, Brazil, Canada and Mexico.
Strong link between innovation and business health
In the United States, slightly more than 83 percent of all manufacturers who participated in the Monitor survey say they have formalized processes to drive innovation. That is modestly lower than findings for all global competitors (91 percent of Latin America, 90 percent of Asia-Pacific and 86 percent of European manufacturers). But a closer look at thriving companies suggests a solid connection between innovative activities and business vitality. For example, every thriving Asia-Pacific manufacturer in the Monitor survey indicated they have some formal means of driving innovation in their companies, marking a sizable 10 percent jump over the region's total sample.
"Clearly, a more holistic view of innovation may well be what separates the winners from the losers in the advanced manufacturing sector," says Frank Le Bihan, a principal in RSM's international services office. "Given the confluence of increased shop floor automation, big data analytics and a rapid rise of digital manufacturing, it's likely that future innovation gains will be driven by nations with deep pools of science, technology, engineering and mathematics talent."
The 2015 RSM Manufacturing & Distribution Monitor was conducted using an online questionnaire promoted by RSM, industry associations, and a research panel organization to manufacturing and distribution companies. There were 1,660 total valid respondents to the 2015 Monitor survey, with completed questionnaires received in March and April 2015. Responses were received by The MPI Group, an independent research firm, and then entered into a database, edited and cleansed where necessary to ensure answers were plausible. All respondent answers to the 2015 RSM Manufacturing & Distribution Monitor survey are confidential. As an incentive to complete the study, participants that provided contact information are being provided a customized benchmark report.
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