House Science Committee Discusses Manufacturing and Innovation Legislation

The House Committee on Science, Space, and Technology’s Subcommittee on Research and Technology held a December 12 hearing to consider a potential national manufacturing innovation network and to discuss H.R. 2996, the Revitalize American Manufacturing and Innovation Act of 2013. The significant influence that manufacturing has on the U.S. economy has been a topic of discussion among policy makers who are concerned about declines in manufacturing employment. “Manufacturing is generally more research and development intensive than other sectors of the economy and therefore more closely tied to the nation’s innovative capacity,” cites a hearing charter prepared by committee staff.

H.R. 2996 authorizes $600 million for the creation of a Network for Manufacturing Innovation Program within the National Institute of Standards and Technology. This Network was based on the President’s FY2013 and FY2014 budget proposal which included funds for a National Network for Manufacturing and Innovation (NNMI). The institutes that would constitute those in the NNMI would each focus on an area of manufacturing technology development and would be supported through public-private partnerships.

“Nationally, manufacturing supports 17.2 million jobs - with 12 million Americans, or roughly 9 percent of the workforce, employed directly in manufacturing. Manufacturing represents approximately 11 percent of the American economy, and has the greatest multiplier effect of any major sector in the American economy. According to the Bureau of Economic Analysis, each dollar spent in manufacturing generates an additional $1.35 in spending,” stated Subcommittee Chairman Larry Bucshon (R-IN) in his opening statement. He described the budget for this new program in the broader context of cuts to discretionary research and development programs, noting that budget cuts in discretionary spending would affect “programs like the proposal in H.R. 2996.”

Subcommittee Ranking Member Dan Lipinski (D-IL) highlighted the benefits of the manufacturing network proposed in H.R. 2996. “The manufacturing institutes created under the proposal can serve as centers of manufacturing excellence, accelerating innovation and the transition of cutting-edge manufacturing technologies and processes to the marketplace. They can also serve as the nexus for addressing our manufacturing talent shortage. I think it is important for our manufacturing workforce – from scientists and engineers to production workers and technicians – to have access to and experience with new, innovative technologies.”
Four witnesses testified. Jonathan Davis, Global Vice President of Advocacy for SEMI, a global industry association serving semiconductor manufacturing companies, provided his views on the legislation. “The cost to commercialize technology continues to increase as we compete with global competitors supported by foreign government investment,” he stated as he noted the incentives for U.S. manufacturers to move offshore. “The legislation is technology neutral. The government cannot require specific technologies in the solicitations from the NIST based Network for Manufacturing Innovation (NMI) program office. All industries representing many different technologies can participate in bringing forth solicitation responses for consideration… with competition for the best ideas, and the strongest programs being at the center of the submissions.” He also stressed that “the legislation has an emphasis on proposals that strengthen U.S. manufacturing industries and return value to the U.S. tax payer in retaining and creating U.S. based manufacturing jobs.”

Richard Aubrecht, Vice Chairman of the Board and Vice President for Strategy and Technology at Moog, Inc. spoke about the importance of the manufacturing sector while also cautioning that many skilled manufacturing workers will be retiring in the next ten years. He emphasized a need for effective training capabilities and suggested that Massive Open On-line Courses (MOOCS) could produce appropriate educational experiences. He described what, in his view, is the appropriate role for government stating that he does “not believe the Federal Government needs to spend on manufacturing research” stating that companies work with universities and that research in those consortia is openly shared. “There is a role for the Federal Government in developing a new lower cost model for training programs,” he said.

Stephen Biller, Chief Manufacturing Scientist at GE Global Research described the NNMI initiative’s role in the U.S. manufacturing sector. “Today, government support for innovation has to be more targeted, involve more partners and be committed to longer time horizons. For innovations to be implemented by enterprises of all sizes, funding and collaboration needs to continue to a small-scale production level, or later stages of [research and development] closer to commercialization…. The launch of the Network of Manufacturing Innovation (NNMI) would provide an opportunity to significantly improve the competitiveness of U.S. manufacturing.” He advocated for the Centers for Manufacturing (CMI), established in H.R. 2996 to decrease the time required for manufacturing technology to be introduced in the U.S. supply chain. He provided recommendations for the design of CMIs as he suggested that partnerships provide “great potential to scale up advanced technologies that are currently in their infancy.”

Stan Veuger, Resident Scholar at the American Enterprise Institute discussed the state of the discretionary budget and how that affects manufacturing. He also described how the proposed centers for manufacturing innovation reflect the needs of U.S. manufacturing firms. The manufacturing labor market, he noted, has been affected by automation and information technology. Also, he noted that the post-secondary education system “does not provide graduates with the skills required to be successful in today’s labor market.”

Reps. Tom Reed (R-NY) and Joseph Kennedy, III (D-MA) testified on their proposed legislation. Reed emphasized the “long-term benefit of creating manufacturing hubs and public-private partnerships” as he promoted coordinated efforts at the federal and local level to partner manufacturers with higher education institutions. He promoted the legislation’s proposed public-private partnerships through Centers for Manufacturing Innovation that would link “higher education, community colleges as well as small and large manufacturers to promote best practices and address advanced manufacturing challenges.” Reed also noted the skills gap and the bill’s focus on improving the talent pool. He noted that the “institutes will be selected for participation and funding through a competitive, merit review process run by the Secretary of Commerce and NIST.”

Kennedy spoke about the need for policy-makers focus on the link between innovation and manufacturing to understand “that the latter is a critical vehicle for bringing the former to market.” He expressed support for the manufacturing sector as a means for “stronger, more sustainable pathways to middle class jobs” and noted that outside of “places like Cambridge and Silicon Valley” independent businesses lack the coordinated regional support systems for innovators, entrepreneurs and manufacturers. The bill therefore “sets a strong framework and then lets local stakeholders take the reins.”

Discussions from Members of the Subcommittee were focused on issues faced by the manufacturing industries including regulations, international competitiveness, productivity, skills training, and the U.S. employment rate. The importance of the industry role in the proposed initiative was welcomed by both sides of the aisle.