The US Is Lagging in R&D Investment, But We Can Turn It Around
Opinion/Analysis
In Michigan, we are well-versed in the critical importance of manufacturing, from automotive production to pharmaceuticals, medical equipment, aerospace and defense and household appliances. Manufacturing accounts for nearly 20% of the state’s total gross product and 15% of our entire workforce, and $52 billion of Michigan’s annual exports.
Our economy depends on the U.S. manufacturing sector being best-in-class globally. Yet it is no secret that U.S. manufacturing has been lagging China for the last decade—and the gap is growing, which creates an urgency to act.
For example, in the research and development space, the Chinese government's R&D investment grew by 13% in 2019—and, through its "Made in China 2025" initiative, China plans to increase its investment by 7% each year through 2025. Here at home, our investment grew by just 8% in 2019, despite competing in the same global race. We are not investing to win, and that is hugely problematic for our nation.
Do we truly expect to win this race without applying an equal or more significant investment? Are we so much smarter than China?
It is more likely that we will continue to fall behind without making the investments needed.
However, this is not a "gloom and doom" story. We already have world-class universities and national research laboratories that have and continue to generate the “ideas.” The question is, what is beyond the idea?
As a nation, we have spent the last several decades generating world-class ideas that we have failed, in many cases, to develop, commercialize and manufacture within the U.S. The challenge is to change this paradigm systematically.
The model of the Manufacturing USA institutes is the right one to move the needle in support of the U.S. manufacturing sector, our national economy, and national security, and we should commit to it going forward. We are, after all, American, and understand well the phrase "let's go BIG."
Prerequisites for success are adequate funding, measured against our global competitors, and alignment of the institutes' activities with commercial market needs. Without both foundational prerequisites being satisfied, success is possible through happenstance but highly unlikely. I applaud Sens. Peters and Stabenow, along with many of our other Congressional leaders, for the support they have voiced for LIFT and our sister Manufacturing USA institutes.
Designed to serve as the bridge between basic research in academia and commercialization in the marketplace, the institutes allow small and medium-sized manufacturers to understand critical emerging technologies and gain accelerated traction in the global markets. In addition, they support the development of the future manufacturing workforce, applying those technologies within a growing U.S. manufacturing industrial base. Success is driven by strategic, rigorous, sustained, and focused effort that services a future market need – something industry knows very well.
In LIFT's case, we have successfully demonstrated these goals are achievable via the current public-private partnership model. We connect the voice of large industry to resources and small and medium-sized manufacturers, satisfying the need to understand and focus on actions that drive tangible commercial results in the manufacturing base.
With that success in mind, the question before us as a nation is, will the federal government make the necessary investments to create change across the U.S. faster and better than our global competitor China?
Our recommendation strongly supports this foreseeable need. For a robust national economy and national security, we have to be simply the best in the world at manufacturing and all that entails.
Nigel Francis is the CEO and Executive Director at Detroit-based LIFT, one of the founding Manufacturing USA institutes.
