A new report from researchers at MIT ties the long-term health of the American economy to its domestic manufacturing sector.

From the report:

The danger (of outsourcing) is that as U.S. companies shift the commercialization of their technologies abroad, their capacity for intitiating future rounds of innovation will be progressively enfeebled. That's becasue much learning takes places as companies move their ideas beyond prototypes and demonstration and through the stages of commercialization. Learning takes place as engineers and technicians on the factory floor come back with their problems to the design engineers and struggle with them to find better resolutions; learning takes place as users come back with problems.

Translation: When production leaves, the next big innovation follows.

Check out the whole MIT report here.