WASHINGTON – A new report on U.S. advanced manufacturing calls for a national strategy that includes a mix of tax reforms, R&D funding to foster innovation and greater investment in technical education to spur “a sustainable resurgence in advanced manufacturing” in the U.S.
The report by a presidential advisory committee on advanced manufacturing released on Tuesday (July 17) includes a list of 16 recommendations covering innovation, building up the pool of manufacturing workers and their skills along with a series of tax and trade reforms designed to spur investment in advanced manufacturing. It also cited the importance of electronics manufacturing for maintaining U.S. global competitiveness as well as national security.
The panel said its recommendations “are aimed at reinventing manufacturing in a way that ensures U.S. competitiveness, feeds into the nation’s innovation economy and invigorates the domestic manufacturing base.”
MIT President Susan Hockfield and Andrew Liveris, CEO of Dow Chemical, co-chaired the committee that produced the manufacturing report. Industry members included Intel CEO Paul Otellini.
The manufacturing report stressed the importance of a robust electronics manufacturing sector for supporting U.S. national security. Citing the growing number of counterfeit chips found in U.S. weapons, the panel noted that a strong manufacturing sector “ensures the integrity of [military and commercial] goods, especially electronics and other mission critical items.”
Among the manufacturing sectors seen as critical to advancing U.S. competitiveness are industrial robotics, nanomanufacturing and flexible electronics manufacturing. “Technologies for flexible electronics manufacturing will be major differentiators in the next generation of consumer and computing devices,” the report concluded. “Some of these devices are expected to be among the fastest growing product categories over the next decade.”
The tech industry must work more closely with university researchers and community colleges to develop and deploy new manufacturing technologies and to ensure a steady supply of qualified workers to run advanced manufacturing lines, the panel concluded. To that end, it recommended establishing a “National Network of Manufacturing Innovation Institutes” that would assist in moving products from the research stage to production, the risky period of business development frequently referred to as the “valley of death.”
The problem is particularly acute for electronics manufacturers. Rahul Razdan a former executive in charge of strategy at electronics manufacturing giant Flextronics, noted that “it is exceedingly difficult for primary services cultures to shift to a product mode, and that has indeed been the case for EMS companies.”
Another driver, Razdan added, "is the ability for late-stage customization. That is, the later one can commit to manufacturing the more ability there is for efficiency, minimization of market risk and inventory exposure."
Among the proposed tax reforms was a recommendation designed to remove barriers to greater industry-university partnerships for advanced manufacturing. The panel recommended that companies receive a waiver from tax restrictions related to private industry use of tax-payer supported university buildings constructed with tax-exempt bonds.
Closing the so-called skills mismatch between industry and the U.S. workforce also must be addressed through greater emphasis on technical training by the nation’s community colleges. “The future of manufacturing will be radically different from its past,” the report warned. “The status quo curricula, teaching methods and silos must be replaced with a collaborative, innovative, life-long learning culture.”
Funding these manufacturing initiatives remains perhaps the biggest hurdle. A bill aimed at advancing manufacturing R&D and education was introduced last week (July 9) in the House by Rep. Eddie Bernice Johnson (D-Texas), but the breath of congressional support for the initiative remains unclear.
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