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Report Urges US Investment in Manufacturing

Bill Koenig
By Bill Koenig Senior Editor, SME Media

A new report urges the United States invest in emerging manufacturing technologies, saying the private sector can’t preserve US manufacturing by itself.

“Market forces alone are unlikely to achieve the needed change,” according to report by a group called MForesight. “They have not so far….Only government can overcome this market failure to ensure that the United States remains globally competitive.”

The report, titled Manufacturing Prosperity, essentially attempts to revive a 1980s political debate whether the US should have an industrial policy.

During that decade, supporters of the idea cited how European and Asian governments actively planned and worked with industry. Opponents said market forces were better and industrial policy was an attempt to add more regulation. The industrial policy movement went nowhere.

The new report advocates for “sustained, strategic investments” by the US in manufacturing.

Manufacturers, the report said, are “driven by short-term financial incentives” and concentrate “on applied research and incremental product development” instead of efforts “to capture the ‘next big thing.’”

“Only government can overcome this market failure to ensure that the United States remains globally competitive,” according to the report.

The report was written following a series of eight “roundtable discussions” in different cities earlier this year. Participants included executives and academics. Sites of the discussions included Boston, Washington, Dearborn, MI, San Jose, CA, and Indianapolis.

Participants at the Dearborn session on March 29 included Jeff Krause, executive director of SME, parent organization of SME Media, which manages this website.

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Cover of the MForesight report

As companies have shifted manufacturing capacity outside the US, they are also moving to establish more research and development facilities overseas, the report said. Examples include General Motors Co., Intel and Apple putting R&D centers in China, according to the report.

“For some companies, moving R&D offshore is the high-skilled equivalent of moving production offshore for low-cost factory labor,” the report said.

Emerging Industries

The report identified emerging industries where the United States should concentrate efforts. They included self-driving cars, robotics, metal 3D printing and quantum computing.

“The United States needs a broad national conversation to identify the necessary steps to achieve these objectives,” MForesight said.

One of the steps the group suggested was establishing what it calls Translational Research Centers. Such centers would “provide funding for product development to fill the gap between academic researchers with a potential hardware product or manufacturing process technology and domestic production.”

The Obama administration established the Manufacturing USA network of institutes. Companies, academics and other groups collaborate on manufacturing technology. But the ultimate commercialization is left to companies.

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