National Network for Manufacturing Innovation is Important to Reviving Manufacturing

After decades of warning by business and academic leaders about the value of manufacturing to our American economy, the Great Recession of 2007-2009 served as a brutal wake-up call to the country.

The loss of 5.7 million manufacturing jobs and more than 65,000 U.S. manufacturing firms closing their doors between 2000 and 2011 led to the long-feared ramifications of damaged communities, stagnant wages and shattered dreams.

Finally, business, academic, and government officials realized the need to revive American manufacturing and crafted a "once-in-a-generation investment in manufacturing that could serve as the centerpiece for a new high-tech industrial era in America."

The result was the new National Network for Manufacturing Innovation, or NNMI, which was established by the passage of the Revitalize American Manufacturing and Innovation Act (H.R. 2996). Rep. Joseph P. Kennedy III, D-MA, and Rep. Tom Reed, R-NY, introduced H. R. 2996, but it was cosponsored by 51 Democrats and 49 Republicans. The Senate version also received bipartisan support, and the Act was signed into law in December 2014.

SME's recently released a report titled "Inside America’s Bold Plan to Revive Manufacturing," which describes the NNMI as "a moonshot—with lofty scientific ambitions—aimed at restoring America’s leadership in manufacturing and securing it for the 21st Century."

“We’re committed to communicating and sharing SME experience and expertise," said. SME's CEO Jeff Krause. "The report describes in detail the climate that led to the creation of the Institutes; introduces the leadership and organizations involved and discusses the individual technologies being explored. It’s a great introduction and overview of both the original problem and the innovative solution.”

The report states that "part of the NNMI’s goal is to bring even more manufacturing home and develop workers with high-demand advanced manufacturing skills. But the real heart of this effort is targeted at rebuilding America’s strength in the manufacturing technologies that undergird today’s modern manufacturing facilities, many of which are no longer “factories” in the classic sense."

Lack of Competitive Technology Part of Problem

SME points out that it wasn't just "low-wage countries and trade agreements that are to blame for the U.S. decline in manufacturing, the nation’s diminished competitiveness in these technologies has also played an enormous role… America’s lack of understanding about manufacturing technologies—what they are and what they do—was one reason why many dismissed the value of preserving the manufacturing industry in the U.S. years ago."

The report reminds us that it is "important to remember that manufacturing any part or product usually involves a series of distinct processes...Making an airplane, car, medical device or smartphone today, requires a series of highly engineered processes on the long path from converting raw materials into finished parts that will then be joined and assembled into a final product."

It states, "The advanced manufacturing technologies of today and tomorrow, and the companies that make them...are all in various states of maturity. Some are considered emerging technologies. That includes 3D printing, also known as additive manufacturing (AM). But it also includes "older technologies that have grown very sophisticated over time, with the help of software and other developments."

I thought it particularly important that the report highlighted that it takes "a deep understanding of these manufacturing technologies, and how they work together to make things, which is actually necessary to design many of the cutting-edge products of today and the future."

The report noted that this fact was one of the key arguments of the 2012 book, Producing Prosperity: Why America Needs a Manufacturing Renaissance, by Harvard Business School professors Gary P. Pisano and Willy C. Shih. "Pisano and Shih argued that as America loses its so-called industrial commons, or communities of knowledge built around these manufacturing technologies, the nation will lose its ability to successfully innovate…the knowledge about how to make things is central to innovation—if it can’t be made, it’s just an idea—and usually it is the development of manufacturing technologies that actually leads to the new widgets and gadgets of the future."

Pisano and Shih wrote, “The United States has been losing its competitive advantage in those sectors and technologies that it needs to drive growth in the twenty-first century.” They implored U.S. leaders to “abandon the grand experiment in de-industrialization before it’s too late.”

The report echoes what I wrote in my book, stating that "the U.S. was a leader in manufacturing technologies. But today, a sobering number of manufacturing technologies come from other countries, usually Germany, Japan, China, Italy, South Korea and Switzerland." It cites trade data from the U. S. Census Bureau showing that the U.S. imported $11.4 billion in metalworking machine tools in 2014, while exporting "just $7.5 billion, a decrease of about $189 million from the prior year."

This is why the U. S. has gone from a trade surplus to a trade deficit in advanced technology products, dropping from a surplus of $4 billion in 2001 to a deficit of $86 billion in 2014.

The report covers some of the technologies in which we have fallen behind, such as 3D printing, industrial robots, flat screen TVs, lithium-ion batteries, and solar panels. Even though we originated many of these technologies and have invested billions in them, foreign countries like China have spent trillions to take the lead. For example, "The U.S. supplied less than 16% of the industrial robots in the world in 2013, according to the International Federation of Robotics. About 60% of the world’s industrial robots came from Asia, primarily China, Japan and Korea. Another fourth come from Europe, primarily Germany, Italy and Switzerland."

Collaborative Partnerships

The report also states that is a question of priorities, because "the governments work as strong partners with manufacturers, providing consistent and high levels of financial backing for applied manufacturing research. And they are persistent in their efforts, without prolonged debates or whipsawing with the political winds. Germany’s Fraunhofer Society is an often-cited example of other countries’ commitment to these activities, and for good reason. That network of research institutes has an annual budget of 2 billion euros (about $2.27 billion)..."

The report states that "Leaders in U.S. manufacturing have recognized for some time that if America does not want to be further sidelined in the critical, valuable manufacturing sector—after having a taste of the consequences—the nation would need to recapture leadership in a few key technology areas."

After taking office during the Recession, "President Obama commissioned a number of committees and reports, and meetings were held nationwide, as the depths of America’s manufacturing challenge were explored.

"Although the NNMI was just one of many recommendations that came out of those sessions, it was a centerpiece proposal “because it prioritized reinvestment in manufacturing research,” said Steven R. Schmid, a professor of aerospace and mechanical engineering at the University of Notre Dame in South Bend, IN Schmid served at the Advanced Manufacturing National Program Office, where he helped design the NNMI program. America’s lack of investment in manufacturing research, he told SME, is “a key area where other countries are blowing us away.”

Schmid added. “In a free-market world, manufacturing research investment is considered to be infrastructure, just like roads or airports. If we don’t support our manufacturing infrastructure like these institutes, it gives other nations a competitive advantage."

What were the key provisions of the Revitalize American Manufacturing and Innovation  Act? Basically, it amended the National Institute of Standards and Technology (NIST) Act to direct the Secretary of Commerce to establish a Network for Manufacturing Innovation Program within NIST. The Program purposes to: "(1) improve the competitiveness of U.S. manufacturing and increase domestic production; (2) stimulate U.S. leadership in advanced manufacturing research, innovation, and technology; and (3) accelerate the development of an advanced manufacturing workforce."

The Act required the Secretary to: "(1) establish a network of centers for manufacturing innovation, to be known as the Network for Manufacturing Innovation; and (2) award financial assistance to assist in planning, establishing, or supporting such centers."

Growth of Research Hubs

The SME report states, "By the end of 2015, America will have nine of its own manufacturing research hubs in various stages of development. In addition to workforce development projects, their mission is to invest in applied research projects in technology readiness levels 4 to 7."

The initial pilot institute is America Makes, the Additive Manufacturing Center in Youngstown, OH. The report says it "is the furthest along and has worked through its start-up growing pains, such as intellectual property agreements with members, how to structure itself and deciding which projects to fund…America Makes has more than 140 members and has awarded funds to 47 projects in the area of additive manufacturing or 3D printing. Each applied research project matches public to private investment on a 1:1 basis and involves several companies and universities collaborating."

Other Centers currently selected are:

• Digital Manufacturing and Design Innovation Institute, (Digital Lab, Chicago, IL
• Lightweight Innovations for Tomorrow (LIFT), Materials Manufacturing, Detroit, MI
• Institute for Advanced Composites, Manufacturing Innovation, Knoxville, TN
• PowerAmerica, Semiconductor Technology, Raleigh, NC

Depending on additional funding for FY 2016 and beyond, "The National Network for Manufacturing Innovation may expand to as many as 16 institutes by the end of 2016. The vision is for an eventual total of 45."

Since the report was released, two other Centers have been launched:

• Manufacturing Innovation Institute for Integrated Photonics - Launched: July 27, 2015
• Flexible Hybrid Electronics Manufacturing Innovation Institute - Launched: August 28, 2015

Three more Centers are selected to be launched in the near future:

• Smart Manufacturing Innovation Institute
•  Sensors and Process Controls
• The Revolutionary Fibers and Textiles Manufacturing Innovation Institute

"Given our competitive global economic environment, the U.S. is going to have to decide how to respond to continued long-term public funding by other nations in these key manufacturing technologies,” said Ed Morris, executive director of America Makes

At the WESTEC show this past week Krause said “Advanced manufacturing and industrial-scale production are a big part of and contributors to our nation’s proud history. This National Network for Manufacturing Innovation is the next great chapter in our story: a progressive partnership of public sector, private enterprise and academia working together to effectively explore and develop technologies and products that will inspire, revive and renew American manufacturing opportunity.”

Mr. Krause added his opinion in why the investment in the NNMI's can work: “These new technologies hold such promise, but there is much effort and investment necessary. By combining applied research, product and process development, training and equipping a workforce, a partnership can collaborate and move more efficiently; invest more directly and produce quicker results than one entity.” 

With regard to the role SME can play in the NNMI, Mr. Krause, said, “SME and our leadership, members and staff value the opportunity to have participated with many of the Institutes from their beginning. We’re advocates for manufacturing and engineering and have been for decades. We have the relationships and unique capability to bring together the right people with the right experiences and expertise to attack the challenge in support of advanced manufacturing. This is a really special, really entrepreneurial opportunity and we’re proud to be a part of it.”