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26 ISE Magazine | www.iise.org/ISEmagazine innovation R Disruptive innovation can revive manufacturing By Nabil Nasr Restoring U.S. manufacturing lead- ership requires doing things first that competitors in lower-cost environments simply cannot achieve. Instead of evolu- tionary or incremental progress, today's industrial leaders are companies that break from the norm. Reclaiming an impactful manufacturing economy re- quires disruptive innovation. But what makes something disrup- tive? Just as Ford's Model T displaced horse-drawn carriages a hundred years ago, today's innovations must of- fer a completely new value propo- sition. Products and services that stand alone against conventional competition attract attention from investors and customers, often un- expectedly overtaking the existing market. After decades of technological revo- lution, today's manufacturing economy remains fairly well-defined in specific, traditional markets – aerospace, auto- motive, electronics, etc. To create dis- ruptive innovations from within these markets, manufacturers must use the technology and purpose of those mar- kets to do something that never has been done before. This simple concept is diffi- cult to execute. To do so requires defin- ing what some corporate executives call a "big dream" or what outsiders might call a big lie, as the technological objec- tive might be so beyond the norm that we wonder if the company truly believes it can be accomplished. By creating and standing by this seemingly impossible objective, manufacturers can drive the disruptive innovation required by syn- thesizing a newly perceived necessity. For example, more than a decade ago Tesla stated that it intended to design and manufacture affordable all-electric vehicles with the same range and per- formance as traditional cars, predicting a future of electric transportation. With an estimated 260 million cars (nearly all of them combustion-driven) and nearly 170,000 gasoline stations on U.S. roads, Tesla's "big dream" was ostensibly im- possible. But because it defined its dis- ruption and stood for it publicly, Tesla created the necessity that drove the shifts required to achieve it. Leveraging exist- ing technologies in electric propulsion, regenerative braking and battery sys- tems underused by traditional automo- tive leaders, Tesla created a product that changed the value proposition of the au- tomobile. Tesla is now worth more than both Ford and General Motors, com- panies with 10 times the longevity that deliver more vehicles in one week than Tesla does in one year. The success that follows disruptive in- novation is related to the intrinsic value it provides to the market, meaning that where, how many and what a product is made of will become less of a driver of profitability than how beneficial that product can be to its users. This is nec- essary, as years of economic evidence demonstrate that cutting costs on fac- tory labor and materials while making the same things will not do. Instead, we must do what others cannot by setting goals that seem impossible, creating the necessity required to achieve them and leveraging advanced technologies. For manufacturers like Tesla and SpaceX (whose "big dream" is consum- er space travel to Mars), the result- ing innovation and technological breakthroughs can drive time-to- market from years down to months – setting both products and mar- kets above the competition. For others like General Electric, which claims that most of its revenue will come from digital service rather than hardware manufacturing, innovation prepares companies for a changing in- dustrial economy. The next generation of manufactur- ing is now, and disruptive innovation is the key to success. When disruptive in- novations inevitably hit, companies that miss the ball do not last long. Reach be- yond the possible or the status quo will sink us. Nabil Nasr is director of the Golisa o I stitute for Sustai ability (GIS) at the Rochester I - stitute of Tech ology a d director of the Ce ter for I tegrated Ma ufacturi g Studies, a tech- ology developme t a d tra sfer arm of GIS. He fou ded the Ce ter for Rema ufacturi g a d Resource Recovery (C3R) at RIT. Tesla created a product that changed the value proposition of the automobile.