On a recent business road trip up the Interstate 85 corridor between Atlanta and Charlotte, I was stricken by the large number of empty small and mid-sized manufacturing facilities lining the expressway. On the drive north to Charlotte, we passed a dozen or more large, but abandoned, industrial buildings with empty parking lots and “Available” real estate signs visible from the road. In a significant manner, these empty facilities demonstrate the debilitating effects of globalization on the formerly vibrant small and mid-sized manufacturing base that previously dotted the landscape of the U.S. After establishing the markets and building the customers for, as some examples, specialty plastics, packaging materials or electronics, these companies lost the “race to the bottom” on price against low cost foreign manufacturers and, as a result, went out of business. When these companies closed their doors, well-paying jobs, the owners’ assets and the local tax base were each lost, maybe forever.
However, as an IP business strategist and consultant, I believe the demise of these small and mid-sized manufacturers may not have been inevitable even in this globalized economy. And, perhaps more significantly, the remaining small and mid-sized U.S. manufacturer base could be bolstered by embracing patent strategy as a bulwark against competition from foreign knock-off products.
Put simply, these small and mid-sized manufacturers were innovators before innovation was “cool”. Small and mid-sized manufacturers have always innovated on a regular basis to meet the needs of their customers. These companies are typically nimble and are able to respond to customer needs more quickly than larger manufacturers and, accordingly, they have often become the preferred providers of non-commodity materials to their customers. Indeed, that is why so many small and mid-sized companies use the word “specialty” in their names or to describe their product lines. Such innovative differentiation in their products is the “secret sauce” that makes their products more desirable than those of their competitors.