A new report outlines the future for small and mid-sized manufacturers.

The Future Success of Small and Medium Manufacturers: Challenges and Policy Issues outlines two important trends that are shaping the future of these smaller manufacturers.

First, large manufacturers are increasing their dependence on suppliers of parts as they streamline their operations to increase productivity.

On the positive side, this trend opens new opportunities for supplier firms. At the same time, the pressures to reduce costs and ti innovate are increasing.

The second trend involves the development of increasingly sophisticated production in developing countries. Smaller U.S. manufacturers are facing increasingly sophisticated competition.

In order to stay competitive, these companies have to offer value to their customers that low-cost overseas competition cannot match, such as proprietary, high-technology products, a willingness to customize, and fast turnaround times.