Ensuring Disruptive Manufacturing
“Disruptive” by definition means to interrupt the norm. To ensure the future of manufacturing we must disrupt it. Thankfully, the President’s Council of Advisors on Science and Technology (PCAST) strongly agrees. Last month, PCAST published a Report to the President on Capturing Domestic Competitive Advantage in Advanced Manufacturing. The report presents 16 specific recommendations to “set the stage for advanced manufacturing to thrive in the United States.”
PCAST has obviously been listening to the voice of the manufacturing customer. This may be because the Advanced Manufacturing Partnership (AMP) Steering Committee that initiated these recommendations consists of 12 members from industry and 6 from academia. Collectively, this group represents virtually every industry from automotive (Ford) to high-tech (Intel) to consumers (P&G) to industrial (Caterpillar) to aerospace (Northrop Grumman) and beyond. In other words, these are people and companies who know a thing or two about manufacturing. And while some of the goals are lofty, they are practical—nuts and bolts, as it were—recommendations for truly transforming manufacturing in the United States. The ever-present challenge, however, is implementing them.
The business case for building a stronger manufacturing sector is well documented. As MAPI, the National Association of Manufacturers, and The Manufacturing Institute describe in the 9th edition of The Facts About Modern Manufacturing:
- For every $1 invested in manufacturing, the economy receives $1.34 in output in return;
- If the U.S. manufacturing sector were its own country, its $1.7 trillion worth of annual value-added would make it the ninth-largest economy in the world; and
- More than 1 in 7 U.S. private sector jobs rely on manufacturing—12 million directly in manufacturing and 6 million indirectly in support sectors.
As has also been well documented, however, the U.S. manufacturing sector faces some real and potentially grave challenges in that the median age for manufacturing workers is getting older, the math and science capability of our students is getting weaker, and national policies and regulations place a 20 percent higher cost burden on American manufacturers than on manufacturers in our nine major competitor countries.
That’s the funny thing about “disruption”—while PCAST’s recommendations are timely and thoughtful, they must actually be implemented to achieve their goal of encouraging advanced manufacturing in the U.S. to thrive.
The three “pillars” of PCAST’s recommendations echo the concerns that manufacturers have been expressing for years about “enabling innovation,” “securing the talent pipeline,” and “improving the business climate.” These pillars serve as a strong foundation for the council’s 16 recommendations, which each have multiple, carefully crafted ideas that could be swiftly implemented to generate positive manufacturing disruption.
Some of the recommendations seem so simple that they beg the question “Why haven’t we done this already?” Examples include:
- Increasing R&D funding for cross-cutting technologies by identifying a “starter list” of vital technologies that could serve multiple purposes and supporting their development with more R&D funding;
- Establishing tax-free bond-funded university facilities to foster industry and university collaboration;
- Creating a searchable database of manufacturing resources and making it available to all manufacturers to serve as an enabling infrastructure for small and medium-sized companies;
- Promoting an advertising campaign to build excitement and interest in manufacturing so that young people see that manufacturing can be and is “high-tech,” challenging, and rewarding;
- Tapping the talent pool of returning veterans to fill the workforce skills gap and to help those who have provided a great service to our country; and
- Establishing national manufacturing fellowships and internships to build important career resources.
These are all very practical ideas, but being practical does not preclude being disruptive. Again echoing the toll manufacturers have been sounding for years, PCAST points out that there are several national policy changes that must be made to truly disrupt yet preserve the U.S. manufacturing sector. Changes such as:
- Altering the tax code to increase the R&D alternative simplified tax credit to 20 percent and making it permanent;
- Reforming and modernizing export controls and centralizing the myriad controls into a single platform; and
- Speeding the development of renewable energy sources.
On paper, these ideas hardly seem disruptive. But therein lies the rub—the power of disruption lies not in the planning but in the implementation, and so it is with these recommendations. To truly disrupt manufacturing, the U.S. needs to disrupt its political, social, and cultural norms as well.
Manufacturers know how to get things done. We simply need academia to jump on board, and government to remove the blockade. The PCAST recommendations are a sound building block for getting us to the next stage. Let’s now focus on disrupting the political norm and getting the job done.
The 16 recommendations made by the council:
- Establish a National Advanced Manufacturing Strategy
- Increase R&D Funding in Top Cross-Cutting Technologies
- Establish a National Network of Manufacturing Innovation Institutes
- Empower Enhanced Industry/University Collaboration in Advanced Manufacturing Research
- Foster Commercialization of Advanced Manufacturing Technologies
- Establish a National Advanced Manufacturing Portal
- Correct Public Misconceptions About Manufacturing
- Tap the Talent Pool of Returning Veterans
- Invest in Community College Level Education
- Develop Partnerships to Provide Skills Certifications and Accreditation
- Enhance Advanced Manufacturing University Programs
- Launch National Manufacturing Fellowships & Internships
- Enact Tax Reform
- Streamline Regulatory Policy
- Improve Trade Policy
- Update Energy Policy