Manufacturing Innovation: Gaining the Advantage In a Fiercely Competitive Global Economy

This article originally appeared on the Commerce Blog.

Good ideas—for new products, new processes, or new services—are terrible things to waste.

Yet, time and time again, inventions and discoveries that first sprouted in the U.S. have taken root in the factories and economies of other nations. Think of computer-controlled machine tools, solar cells, industrial robots, consumer-electronics devices, lithium-ion batteries... 

To many, the list is painfully familiar. And the costs are too: lost jobs, shuttered manufacturing plants, withering supply chains, trade deficits, lost opportunities for spin-off technologies, and more.

But wait, a far better story for U.S. manufacturing is beginning to take shape.  Over the past five years, U.S. manufacturers have added an average of nearly 15,000 new jobs every month, and exports have grown at an average annual rate of 10 percent—or more than three times faster than the average for the preceding decade.

And now, U.S. industry and the federal government are taking deliberate strides to seize and maintain an innovation advantage in the fiercely competitive global economy. One key step is the establishment of the National Network for Manufacturing Innovation (NNMI), accomplished with the inclusion of the bipartisan Revitalize American Manufacturing and Innovation Act in the government funding bill passed by Congress last December.

This young partnership, consisting of regional hubs of manufacturing innovation, is devoted to the economy- growing principle that if a technology is invented in the U.S., we should do our very best to make it here.  The NNMI institutes will leverage the individual and collective knowledge, talents, capabilities, and resources of industry, university, and government partners. These collaborations will cultivate promising discoveries and ideas into new technologies and into cost-effective ways to convert these innovations into American-made products sold to customers around the world.

There’s no time to waste. The competition has a head start. China, Korea, Germany, Taiwan, and other nations intent on building innovation-driven economies already have mounted major programs and the supporting infrastructure to sustain long-term collaborations—the kind required to speed research breakthroughs into proofs of concept, then prototypes, and, ultimately, manufacturable products and related services.

In today’s most advanced manufacturing industries—the ones that make the highest-value goods, pay the highest wages, and export all over the world—product and process innovation are two sides of the same coin. Inventing, designing, making, and improving happen in concert.  And this back-and-forth interaction draws on the strengths of varied organizations, many clustered in the same region.  Solo acts can no longer outperform the competition.

So, the NNMI  is assembling the diverse competitive assets—the people, organizations, and resources—necessary for the U.S. to stay at the head of pack in the global race to innovate and to make.  We have all the essential ingredients: universities and government labs that excel at basic science and technology research, top-flight original equipment manufacturers, capable suppliers, enterprising start-ups, and a new generation of workers ready to master the skills and knowledge needed for next-generation manufacturing.  Each institute provides a shared-use facility for workforce training for veterans, students, and others.

Funded by the Department of Defense or the Department of Energy, eight NNMI institutes have been launched by President Obama since 2012 and now are in various stages of development.  The first, America Makes, is turning additive manufacturing technology—or 3D printing—into a more robust, reliable, and widely useful capability for companies of all sizes. About 125 organizations, including community colleges and small manufacturers, are members of America Makes, headquartered in Youngstown, Ohio.

Next to open their doors are the Digital Manufacturing and Design Innovation Institute (Chicago), Lightweight Innovations for Tomorrow (Detroit), and PowerAmerica (Raleigh, N .C.).  In January, the President announced that the University of Tennessee, Knoxville, will lead a public-private consortium of 122 U.S. manufacturers, nonprofits, and universities in launching the Institute for Advanced Composites Manufacturing Innovation.

In the wings are institutes that will focus on photonics, hybrid electronics, and smart manufacturing—all aiming to accelerate the transfer of laboratory research to the factory floor and to prepare prospective workers with the skills and knowledge required for advanced manufacturing jobs.

In his proposed 2016 budget, the President has called for expanding the NNMI.  He has requested $350 million spread across four departments: Commerce, Energy, Defense, and Agriculture.  Seven new institutes would be launched, including the first two Commerce Department-led institutes, under the management of the National Institute of Standards and Technology.

Existing and future innovation institutes will comprise an integrated, nationwide network that coordinates and leverages their individual and collective strengths. This ecosystem will create the sorely missing collaborative infrastructure and the necessary mass of intellectual might and technology resources needed for our nation to succeed in innovating, producing, competing, and building future prosperity.