RAMI Legislation Poised to Revitalize American Manufacturing

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This Friday morning, July 25, the House Committee on Space, Science, and Technology will hold a full Committee markup of H.R. 2996, the Revitalize American Manufacturing and Innovation (RAMI) Act of 2013. This is the House’s companion legislation to Senate Bill 1468, which passed out of the Senate Commerce, Science, and Transportation Committee by voice vote in May.

The legislation would provide authorization, using existing funding of up to $300 million, for the Secretary of Commerce to establish up to 15 Institutes of Manufacturing Innovation (IMIs), public-private partnerships that would focus on developing advanced manufacturing product and process technologies, facilitating their commercialization, and developing workforce skills around advanced manufacturing technologies. As ITIF writes in Why America Needs a National Network for Manufacturing Innovation (NNMI) and How It Should Work, these Institutes would play a pivotal role in enhancing U.S. industrial competitiveness by supporting development of technologies that will enable U.S. manufacturers to compete in the global marketplace. The additional IMIs would join four already chartered focusing on additive manufacturing, next-generation power electronics, digital manufacturing and design innovation, and lightweight and modern metals manufacturing, all of which are developing manufacturing technologies with both commercial and mission-oriented (i.e., federal agency) applications.

The RAMI legislation makes it possible for new Institutes proposed by U.S. industry and competitively selected on a technology-neutral basis by the National Institutes of Standards and Technology (NIST) to be established. The legislation requires that proposing consortia finance at least 50 percent of the cost of each new Institute and specifies that the intent of the federal match is to get the Institutes established; they must be self-sustaining within seven years.

The RAMI legislation makes possible an institutional structure to support advanced manufacturing in the United States that virtually every major American manufacturing competitor nation already enjoys, with their governments making substantial investments in similar institutes. For example, a recent Wall Street Journal article Explaining Germany’s Success Story in Manufacturing credits in large part Germany’s network of 67 Fraunhofer Institutes that “have helped make Germany one of the leading exporters of high-tech manufactured goods.” Germany invests $2.75 billion per year in its Fraunhofer Institutes, two-thirds of which ($1.8 billion) comes from federal-state governments (through a combination of direct funding, grants, and contracting its own research needs to the Institutes). Britain’s total public-private sector investment in its Catapult Centers—a network of seven technology and innovation centers covering a range of sectors: High Value Manufacturing, Satellite Applications, Cell Therapy, Offshore Renewable Energy, Future Cities, Transport Systems and the Connected Digital Economy—has so far reached £1.4 billion ($2.4 billion). Even still, just yesterday, UK Business Secretary Vince Cable admitted that “the British government still isn’t doing enough to support innovation” and called for a doubling of funding for UK’s Technology Strategy Board to £1 billion. Cable highlighted the vital role of public private partnerships (i.e. Britain’s Catapults) in developing advanced manufacturing product and process technologies, noting that “Critical as it is to have a healthy, profitable private sector, it will not, on its own, generate large scale innovation in areas where there are higher risks and wider benefits.”

Elsewhere, Ontario, Canada has launched a $200 million advanced manufacturing fund. In other words, two-thirds of what the U.S. would fund with RAMI’s $300 million authorization is being invested in just one Canadian province. Japan’s $117 billion economic stimulus package, introduced in January 2013, included $2 billion specifically to promote university-industry collaboration, including money to equip universities to conduct industrially relevant research. And, as part of its Horizon 2020 program, the European Union (EU) has committed €17 billion ($23 billion (@$4B/year)) for “leadership in deploying six key enabling and industrial technologies” including advanced manufacturing, advanced materials, nanotechnology, micro-electronics, and photonics. Just as with America’s IMIs, the EU’s investments will focus on technology development, industrial-scale pilots and test-beds, and prototyping/product validation. And this follows on the EUs FY’13 Funding of €230 million ($310 million) for its “Factories of the Future” program. France also invests heavily in its Industrial Technology Institutes. And while China doesn’t have manufacturing institutes, per se, it is only putting $1.7 trillion into its seven key “strategic and emerging industries” through 2020, including $245 billion to support China’s high-end equipment manufacturing sector alone.

In short, around the world, America’s leading manufacturing competitors are making substantial investments to support their manufacturing industries’ ability to innovate, in large part by bringing companies, universities, research institutes, federal agencies, and state and local governments together to collaborate on developing next-generation technologies. RAMI would play a key role in helping “bridge the gap” to transform basic scientific discoveries into useful technologies and on into commercializable products that can be manufactured at scale in the United States.

Therefore, we commend the House Science Committee for taking up the RAMI legislation this Friday, and urge Congressmembers to recognize that allocating $300 million in already-authorized funding toward building out a National Network for Manufacturing Innovation is one of the most important and cost-effective ways Congress can take to restoring American manufacturing competitiveness.

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About the author

Stephen Ezell is a Senior Analyst with the Information Technology and Innovation Foundation (ITIF), with a focus on innovation policy, international information technology competitiveness, trade, and manufacturing and services issues. He is the co-author with Dr. Atkinson of "Innovation Economics: The Race for Global Advantage" (Yale, 2012). Mr. Ezell comes to ITIF from Peer Insight, an innovation research and consulting firm he co-founded in 2003 to study the practice of innovation in service industries. At Peer Insight, Mr. Ezell co-founded the Global Service Innovation Consortium, published multiple research papers on service innovation, and researched national service innovation policies being implemented by governments worldwide.