What Goes on Under the Hood? How Engineers Innovate in the Automotive Supply Chain

23 Pages Posted: 31 Aug 2016 Last revised: 13 Sep 2016

See all articles by Susan Helper

Susan Helper

Case Western Reserve University - Department of Economics

Jennifer W. Kuan

Tulane University - A.B. Freeman School of Business

Multiple version iconThere are 2 versions of this paper

Date Written: August 2016

Abstract

The questions addressed in this volume are motivated by the recognition that engineers play an important role in generating innovation and economic growth. In this chapter, we seek to offer some description of engineering work by looking in detail at a specific manufacturing industry—firms that supply automakers—to gain insight into how engineers create innovation. Autos account for 5% of US GDP and in 2011, 70% of auto suppliers contributed design effort, a task typically performed by engineers, making the auto supply chain an important context in which to study engineering and innovation.Some highlights from our original survey data include a wide range in terms of size and strategies of supply chain companies; a majority was small- to medium-sized, often family-owned. We observed barriers to patenting for manufacturing firms developing process rather than product innovations. And interviews revealed the importance of customers for the innovative efforts of supplier firms. Certain Japanese customers were preferred because they shared expertise and helped suppliers improve, while other, American, customers were viewed as having unreasonable demands for regular, incremental price reductions and did not offer technical or organizational support.

Suggested Citation

Helper, Susan and Kuan, Jennifer W., What Goes on Under the Hood? How Engineers Innovate in the Automotive Supply Chain (August 2016). NBER Working Paper No. w22552, Available at SSRN: https://ssrn.com/abstract=2832556

Susan Helper (Contact Author)

Case Western Reserve University - Department of Economics ( email )

Cleveland, OH 44106
United States
216-368-5541 (Phone)
216-368-5542 (Fax)

Jennifer W. Kuan

Tulane University - A.B. Freeman School of Business ( email )

7 McAlister Drive
New Orleans, LA 70118
United States

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