Working Paper | October 9, 2023

Models for Building Regional Manufacturing Economies: From ‘Home Alone’ to Regional Ecosystems

At the national level, U.S. manufacturing has suffered from slow productivity, wage, and job growth for decades. At the regional level, industrial decline has hollowed out once-thriving industrial cities. Places with a legacy of manufacturing have often faced population losses, infrastructure decay, and even declines in public health. At the firm level, U.S. manufacturers that have survived these challenges are often – as MIT’s Production in the Innovation Economy study put it – “home alone.” How can the federal government’s investments in revitalizing U.S. manufacturing support the growth of high-performing manufacturing regions?

In this study, we examine U.S. regions that have experienced high levels of manufacturing growth since 2000. Firms in these high-performing manufacturing regions continued to grow even during a period of national industrial decline. Data across more than 20 variables measuring the regional manufacturing economy suggest that the high-performing regions do not follow a single pattern. They come from nearly every part of the country. Some stand out for regional innovation; others have high levels of unionization and few college graduates; still others appear to rely on exports or defense contracts. But there are common lessons from these diverse places.