Obama’s science advisers call for new initiative to spur advanced manufacturing in US

The federal government should create a multiagency advanced manufacturing initiative to help US industry regain its competitiveness, says a new report by the President’s Council of Advisors on Science and Technology (PCAST).

The program should be funded at $500 million during the first year, and increase to $1 billion by the fourth year. The initiative would be coordinated by the White House Office of Science and Technology Policy, with the Departments of Energy, Commerce, and Defense as the major federal participants, the PCAST report recommends.

Agencies would assist US industry and universities with applied research on new manufacturing technologies and design methodologies. The proposal calls for formation of public–private partnerships to transfer technologies at the pre-commercial stage. Small manufacturers would have access to shared R&D facilities under the plan.

After a briefing on the report’s major findings and recommendations, PCAST unanimously approved the report at a 19 May meeting. ‘We were quite shocked to see how quickly [manufacturing] jobs have disappeared with globalization,’ said Eric Schmidt, the former CEO of Google who co-chaired the PCAST subcommittee that wrote the report. Without government intervention, he said, job losses ‘will continue apace.’

During a 19 May presentation of the report’s major findings and recommendations, PCAST cochair Eric Lander, an MIT biologist, observed that the US trade deficit in advanced technology manufactured products has increased from $17 billion in 2003 to $81 billion in 2010. Prior to 2000, the US had always run a trade surplus in those goods. ‘We’ve been very careful to ensure that what we recommend does not constitute industrial policy,’ said subcommittee cochair Shirley Ann Jackson, president of Rensselaer Polytechnic Institute. ‘But there are cases when individual companies cannot justify the investments that are required to fully develop many important new technologies,’ and where private investments need to be complemented by public ones.

In determining the projects the initiative will fund, OSTP managers should consider the potential for ‘transformative impact,’ the presenters said. Specifically, a project should have a high probability of creating jobs, of providing a competitive advantage to the US, and of addressing a ‘market failure,’ where private investment is unavailable. Candidate technologies may include clean energy, pharmaceuticals, and advanced materials, said PCAST member Chad Mirkin, a Northwestern University professor.

‘We need to create ways of moving these types of discoveries past the valley of death,’ Mirkin said, a reference to the gap in financing that startup companies often face in the early stages of bringing a new technology to the market.

A model for the proposed manufacturing initiative was the government–industry collaboration known as the SEMATECH (Semiconductor Manufacturing Technology), the consortium created in 1987 by 14 US-based semiconductor manufacturers to overcome common manufacturing problems, said PCAST member Richard Levin, president of Yale University. That collaboration was widely seen as saving the US semiconductor industry. The $500 million that SEMATECH received in federal funding over a five-year period was matched by the industry partners. Similar cost-sharing would be expected from the initiative’s manufacturer members.

The PCAST report also urges that the US corporate rate be lowered from its current 35% to bring it into line with the 27% average tax rate of other developed nations. It calls for the R&D tax credit to be made permanent, and it endorsed the continuation of the 10-year doubling of the budgets of NSF, NIST, and the Department of Energy’s basic research program. More generally, the PCAST recommends improving US science and mathematics education and raising the limit on the number of highly skilled foreigners who are allowed to work in the US.

Pending minor editing, the report is to be delivered to President Obama and then released publicly. Although PCAST, like other advisory committees, is required to make all materials it considers and discusses publicly available, OSTP declined to provide a copy of the report to Physics Today. An OSTP spokesman said the agency’s lawyers were reviewing whether public release is mandated.

David Kramer