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Manufacturing Institutes: A Key to Revitalizing U.S. Manufacturing

By Robert Atkinson January 30, 2014

Unfortunately, all too often, breakthrough scientific discoveries made in U.S. universities or corporate laboratories have ultimately been commercialized overseas.

In Tuesday’s State of the Union, President Obama announced that his Administration will launch six new Institutes of Manufacturing Innovation—joining ones already established to promote innovation in additive manufacturing in Youngstown, Ohio and in next-generation power electronics manufacturing in Raleigh, North Carolina—as part of a National Network for Manufacturing Innovation (NNMI).

The Administration envisions NNMI as an industry/government, co-funded public-private partnership comprised of up to 45 institutes connecting industry and universities together in hubs of manufacturing and engineering excellence around well-defined technology areas.

As ITIF writes in Why America Needs an NNMI and How It Should Work, these institutes would accelerate innovation by investing in industrially relevant advanced manufacturing process and product technologies. The NNMI—which the Administration has called for funding through a one-time $1 billion federal investment matched by U.S. industry—would play a vital role in enhancing U.S. industrial competitiveness by supporting development of technologies that will enable U.S. manufacturers to develop the cutting edge technologies needed to compete in the global marketplace.

The network would fill a key gap in the U.S. innovation ecosystem. Public investment in scientific research is vital, but government also has a critical role to play in co-investing alongside industry in applied (or “translational”) research whose intent is to ensure that the fruits of basic scientific research and technological discovery get translated into commercial products manufactured at scale in the United States.

Unfortunately, all too often, breakthrough scientific discoveries made in U.S. universities or corporate laboratories have ultimately been commercialized overseas. For example, the U.S. has been the “first mover” and then lost virtually all market share in a wide range of material and product technologies, including semiconductor memory devices, flat panel LED displays, solar cells, lithium-ion batteries, and robotics. An NNMI would help “bridge the gap” to transform basic scientific discoveries into useful technologies and on into commercializable products that can be manufactured at scale in the United States.

We also need an NNMI because competitors around the world are investing billions to support their own industrially-relevant, applied research activities through industry-university partnerships. As ITIF has documented, Germany invests $2.5 billion annually in its network of almost 70 Fraunhofer Centers conducting applied research of direct utility to industry and society. Last year Japan announced a $2 billion investment to promote university-industry collaboration in applied research, while the UK announced a $1.5 billion investment in a network of seven Catapult Centers, including the High-Value Manufacturing Catapult, which would “transform brilliant manufacturing ideas into valuable products.”

The U.S. can no longer assume that federal investment in basic scientific research on the front end will one day surreptitiously turn into technologies and products that can be commercialized domestically. Rather, it needs to do more to accelerate U.S. advanced manufacturing by catalyzing the development of new technologies, production processes, and educational competencies.

The NNMI is an important step in the right direction and we urge Congress to act on bipartisan legislation already introduced by Senators Sherrod Brown (D-OH) and Roy Blunt (R-MO) that would make this network and the benefits it will provide a reality.

Robert Atkinson is the President of the Information Technology and Innovation Foundation.