Small firms play an increasingly important role in U.S. manufacturing and now account for almost half of America's manufacturing employment.

Dense networks of these small manufacturers are vital to the process of taking a product from concept to market, and the exchange of manufacturing know-how across suppliers is essential for the diffusion of the new products and innovative processes that give the U.S. manufacturing its cutting edge. 

However, these small firms face barriers to innovation, a key element in strengthening U.S. competitiveness. The report describes these barriers and offers suggestions about ways to increase innovation by small manufacturers and improve the flow of innovation and information within supply chains.