Basic Changes to Restore Competitiveness Urged : MIT Study Calls Industrial Weakness Biggest Peril to Living Standard, Security

Restoring U.S. competitiveness demands grass-roots changes by companies, labor unions, schools and workers, concludes a two-year MIT study released today.

While government has a role to play, changes that come from the bottom up are essential to improving the nation’s lagging rate of productivity growth, says the study by scientists, engineers and economists at Massachusetts Institute of Technology.

The report, called “Made in America,” pegs weakness in American industry as the biggest threat to the nation’s standard of living and security.

“To live well, a nation must produce well,” said the study, which is being released as a 344-page hard-cover book.

The study differs from many others in that it does not focus on such economic issues as the high cost of capital in the United States and the shortage of national savings.

Instead, it focuses on what it calls an excessive concern with short-term profits; outdated corporate strategies that focus too much on mass production and the domestic American market; and lack of cooperation within and among U.S. companies.

It also blames neglect of people, technological failures in translating discoveries into products, and unwise public policies.

For industry, the main recommendation is to focus on steady, continuous improvements in the production process. That involves meeting customers’ demands for higher quality, faster delivery and more custom-tailoring.

To hurry things along, companies should go to work on designing products and the processes for making them before the research and development is even complete, the study says.

Companies should cultivate a work force that is more involved in the company’s welfare, less specialized and continuously learning, the study says.

But it also says traditional labor-union stands on work rules, job security and compensation “need to be revised to fit a world of changing technologies, international competition and a more educated work force.”