"Chicago was the place where all the classic games were made, because you could acquire all the parts that were necessary from local manufacturers" said Steve Kordek (who gave the world two-flipper pinball). It's a quote from the Feb '10 issue of Chicago Magazine. I'm sure it's something that went unnoticed by most readers, but I winced the second I read it. Why? Because 50 years later, Neuros moved its manufacturing (and a lot of the engineering) to China for largely the same reason. Its simply the nature of innovators that they need a support infrastructure that allows them to get innovations to production quickly and with the support they need to allow them to focus on the innovative parts of the process. Its a myth that folks like us move to China for the lower labor cost, that's a production issue that's far enough down the line that its largely ignored for most of us at the product development stage.

So what's the solution? The manufacturing of consumer electronics isn't coming back to the US as far as I can tell. Its simply too far gone. The best answer is a different kind of "integration." Not vertical, but horizontal, and not an integration in the formal sense where one corporate entity controls a big chunk of infrastructure. Today's integration will be looser, collaborative clusters (to borrow from Michael Porter). Western innovators must share the lessons of leveraging global supply chains to get products to market quickly and cheaply. I've started such efforts by doing as much knowledge transfer to western start-ups from babbaco to Music Gremlin to AirStash and I believe this is just the start. Innovation, engineering and production will be distributed in a flat, global world and we better figure out how to innovate in it, while being proximate to the world's largest market is still our advantage.