Is the Concept of a "National Manufacturing Technology Strategy" Dead in the Water?

August 1, 2011 Dennis D. McDonald

Assuming that the immediate threat of a US Government financial default is at least temporarily postponed, can we now return to considering other issues of national strategic importance?

Consider the idea of a “national manufacturing technology strategy” as put forward by Robert Atkinson in MIT’s Technology Review (beware of the Review’s onerous online registration requirements). Atkinson says:

America cannot hope to compete with low-wage nations without robust efforts to boost productivity and spur the development of complex products that are hard to produce there.

Also:

When companies invest in product and process innovations, spillover effects can benefit other firms and the entire economy. But firms can’t capture all the benefits of their own investments in R&D and new capital equipment, which means that left on their own, they will produce much less innovation and productivity than is optimal for society. This is the key rationale for government support of manufacturing-technology research and for policies such as the R&D tax credit and accelerated depreciation of investments in new equipment. Moreover, small and medium-sized manufacturers often lack the resources to stay abreast of the innovative technologies and processes constantly emerging around the globe.

These ideas echo what Dow Chemical’s Andrew Liveris has been saying in books and speeches as described in Dow Chemical’s Andrew Liveris on the Future of Manufacturing — and Making America Competitive Again. Liveris, co-chair of the Advanced Manufacturing Partnership (AMP), promotes a national strategy with these goals:

The goal of the new AMP is to invest in the emerging technologies that will create high quality manufacturing jobs and enhance the United States’ global competitiveness. Obama’s plan, which leverages existing programs and proposals, is to invest more than $500 million to jumpstart this effort. Investments will be made in the following key areas: building domestic manufacturing capabilities in critical national security industries; reducing the time needed to make advanced materials used in manufacturing products; establishing U.S. leadership in next-generation robotics; increasing the energy efficiency of manufacturing processes; and developing new technologies that will dramatically reduce the time required to design, build, and test manufactured goods.

All well and good, of course. I’ve agreed with these ideas ever since hearing Liveris speak almost 5 years ago on the importance of manufacturing to the economy and the need for a national strategy to improve energy access, education, infrastructure, and government-private sector collaboration.

Unfortunately, having listened to the rancorous debate on the debt limit, and having watched how amendments are being introduced in Congress to hobble — in the name of “reducing Federal intrusion” — the ability of agencies such as the EPA in their enforcement of the law, I have a hard time believing that any serious Federal money or regulatory emphasis can now be placed on implementing a “national manufacturing technology strategy” of the type Atkinson promotes.

I hope I’m wrong about that, but just as I believe that our expenditures on wars in Iraq and Afghanistan doomed our ability to fund a follow on to the Space Shuttle, our current ideology-driven economic shackles may also prevent us from doing what is needed to ensure that the U.S. manufactures things that we can sell to others.