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Manufacturing

U.S. Interstate 191

Lithium-Air Battery R&D Moves Forward

Last week, IBM announced that it is bringing on two corporate partners, Asahi Kasei and Central Glass, to collaborate on research for its Battery 500 Project, the goal of which is to develop a lithium-air battery that can power an electric car for 500 miles on a single charge. In comparison, today’s conventional lithium-ion batteries can only take cars roughly 150 miles between plug-ins. Lithium-air batteries, so-named because they use oxygen to drive a chemical reaction, theoretically have a much higher energy density – hence their appeal. The fact that IBM has dedicated time and money to the development of the technology is an indication of its significant potential. Furthermore, the progression of the Battery 500 Project itself is an interesting case study in innovation.

In late 2009, IBM applied for an ARPA-E grant to support its lithium-air battery research, one of 220 battery-related proposals. Ultimately, the agency chose to fund two other lithium-air projects instead, doling out roughly $5 million to the PolyPlus Battery Company and a little more than $1 million to researchers at Missouri University of Science and Technology. IBM chose to continue its work

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Why is This so Complicated? Yes, Virginia. We do Need a National Manufacturing Strategy.

No wonder we lost over 3 million manufacturing jobs in the last decade due to loss of U.S. competitiveness, and created no net new jobs in the economy because of it. We lacked any semblance of either concern for manufacturing or a national strategy. Now I know why we lacked a strategy. Anytime a President proposes one, he/she gets nailed by all too clever reporters/bloggers/pundits for being out of touch and in the pocket of special interests!

Latest example is a blog by liberal blogger Matt Yglesias at Slate that didn’t just say President Obama’s focus on manufacturing was ill-advised, it was a “foolish” “obsession”. Maybe it’s Matt that has the obsession…

He said the following: “it should be obvious that the path forward for America is to focus on our strengths in information technology and media, and not compete with the Chinese for manufacturing supremacy.” So, given that the IT in ITIF stands for “Information Technology” it should be pretty clear that there is virtually no organization in DC or the nation more committed to IT innovation. However, we also don’t have on ideological blinders. We understand that IT

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microchip

Lessons from Foreign Countries on How U.S. States Can Spur Manufacturing

At the National Governor’s Association March 2012 Chicago Policy Academy forum on “Making” Our Future: Encouraging Growth Opportunities through Innovation, Entrepreneurship, and Investment, I shared several insights on how other countries are implementing innovative policies to attract or to grow manufacturing that may be applicable for policymakers in U.S. states, and thought I would recount those policies proposals here.

One policy instrument gaining global traction is the use of innovation vouchers (or “innovation checks”) to spur R&D, new product development, and/or innovation activity in SME manufacturers. Almost a dozen countries—including Austria, Canada, Belgium, Denmark, Germany, the Netherlands, Ireland, and Sweden—as well as Iowa in the United States, use innovation vouchers. These vouchers, usually ranging in value from $5,000-$30,000, enable SMEs to “buy” expertise from universities, national laboratories, or public research institutes regarding preparatory studies, analysis of technology transfer, analysis of the innovation potential of a new technology, etc. The intent of the vouchers is both to spur innovation in SMEs and to stimulate knowledge transfer from universities and research institutions to SMEs; they also have an added benefit of more closely aligning the interests of industry and academia in a country.

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NIST Manufacturing Systems Integration Program

Manufacturing is Innovative Too!

There is an emerging cottage industry among the economic punditry these days: attempting to debunk any talk that manufacturing is either in trouble or important. The pundits all have the same underlying motivation: we don’t want to be seen as being on the wrong side of history: e.g., technology protectionists living in the 20th century. We’re 21st century guys and gals who understand globalization and the new economy. Not like those folks who wanted to go back to the mid-1950s and have everyone work in dark, dreary manufacturing plants and come home with grease on their hands. The latest addition to this anthology is the article in the New York Times by Eduardo Porter, The Promise of Today’s Factory Jobs. He starts out with standard observation:

“Much of the anxiety about factory jobs is based on the misconception that job losses have been due to a sclerotic manufacturing sector, unable to compete against cheap imports. Until the Great Recession clobbered the world economy, manufacturing production was actually holding its own. Real value added in manufacturing, the most precise measure of its contribution to the economy, has grown by more than two thirds since its heyday in 1979, when manufacturing employed almost 20 million Americans — eight million more than today."



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FTC in DC

Ending the Piracy Subsidy

What do information technology, intellectual property rights, and manufacturing have to do with each other? Everything. We focus on these issues at ITIF because they are more closely linked than ever and are integral to U.S. economic competitiveness and prosperity.

Therefore, I was glad to see over a dozen U.S. Senators from both parties (members of the Senate Committee on Small Business and Entrepreneurship) recently add their voices to a plea from the nation’s attorneys general for the Federal Trade Commission to crack down on foreign manufacturers who are ripping off U.S. intellectual property and using stolen information technology in their products. It signals a growing understanding that value-added manufacturing, intellectual property, and information technology are each important in their own right but also inextricably linked. These efforts also demonstrate a growing consensus that the U.S. needs to step up enforcement of commercial rights and obligations.

As ITIF has documented in compelling and sobering detail, the U.S. manufacturing sector has experienced declines worse than those of the Great Depression in the last decade.

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Rebuild America Act Advances Range of Critical Policies to Revitalize U.S. Manufacturing

On Thursday, March 29, 2012, Senator Tom Harkin (D-IA) introduced new legislation in the Rebuild America Act that contains a number of important policy provisions to revitalize American manufacturing. In particular, the legislation requires the President to develop a national manufacturing strategy and submit that strategy to Congress. (While the Obama Administration did release A National Strategic Plan for Advanced Manufacturing in February 2012, the Bill would ensure that this is not a one-off occasion, and that the strategy should be updated on an ongoing basis by future Administrations). An ideal U.S. manufacturing strategy would ensure the United States implements smart policies regarding the “4Ts”—tax, technology, trade, and talent—as ITIF calls for in the Charter for Revitalizing American Manufacturing in order to ensure that the United States offers the world’s most competitive and attractive manufacturing environment.

One of the best proposals in the Rebuild America Act is its call for the creation of sector-based Technology and Innovation Centers (TICs). These Technology and Innovation Centers would be centers of applied research and development on specific technologies or sectors (such as robotics, wireless technologies, optics, foundries, etc.) that would particularly help small and medium-sized (SME) manufacturers bridge the gap between R&D and manufacturing efficiency at scale. The Bill’s proposal calls upon the Secretary of Commerce to provide grants to coalitions of stakeholders that would partner with national laboratories or institutes of higher-education to launch the TICs. While the actual centers might be located near the geographic center of gravity of an industry—such as locating a TIC for optics near Rochester, NY—the critical point is that the TICs would serve firms beyond their local/regional footprint, so that an optics center might be in Rochester, but would serve optics firms or firms with optics needs around the nation.

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The Case for Manufacturing and the Need to Understand the Transformation

A recent post by Stephen Ezell referenced, a recent op-ed by Christina Romer has touched off a back and forth on the blogshere on whether manufacturing matters.  The fact that the question is even asked illustrates the lack of understanding of the issue and of the structure of our economy. Back in December Susan Hockfield, the President of MIT, made the case for manufacturing in her own op-ed "Manufacturing a Recovery". Central to her argument is a description of some advanced manufacturing companies:

Like the jet aircraft made by Boeing, one of the country's largest exporters, products like these require sophisticated manufacturing equipment, operated by skilled workers, and benefit from the tight integration of design and production. With goods like these, the United States can reassert an economic advantage. If we can find ways for companies of every size to exploit the possibilities of nanofabrication, advanced materials, robotics and energy efficiency, we can create networks of innovation, joining lab research to new production processes and business models.

That tight linkage between product creation and product manufacturing has been highlighted by a number of others, most notable Gary Pisano and Willy Shih at the Harvard Business School in their HBR piece "Restoring American Competitiveness".

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Computer chip example

Manufacturing Policy is NOT “Industrial Policy”

During the 1992 presidential election, Bush economic advisor Michael Boskin infamously stated “computer chips, potato chips, what’s the difference” to reflect his disapproval of candidate Bill Clinton’s proposals to support the high-tech industry. Many people at the time scoffed at Boskin’s comment, thinking how could anyone actually believe this. But in fact, many, many people believed it and still do. Those people are called neoclassical economists. For them the market is sacred and all-knowing and any effort by government to “pick winners,” no matter how mild or broad, is doomed to failure and will only make matters worse. For these ideologues the actual industrial composition of an economy is irrelevant. If America ends up with no high-tech manufacturing, or even no manufacturing at all, we are actually better off for it, since this result would have been produced by the all-knowing market.

Lest you think I exaggerate, just read today’s New York Times article, about the White House’s effort to “lure” jobs to America.

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Magical Manufacturing Thinking: Manufacturing NOT the Bright Spot in the U.S. Economy

A great deal of economic thinking in the U.S. has become based on fads and popular delusions and the current one that says manufacturing is back and leading the recovery is a prime example. Don’t worry about the United States losing a greater share of its manufacturing jobs in the last decade than we did in the Great Depression, this thinking goes, manufacturing is coming back! The New York Times journalist Floyd Norris’s recent article is emblematic of such thinking.

Norris’s piece looks at some recent data to draw what are ultimately faulty conclusions:

In total exports, including manufactured goods as well as other commodities like agricultural products, the United States ranked second in the world in 2010, behind China but just ahead of Germany.

Of course we do, we’re the largest economy in the world. Besides, it’s not exports that matter, its trade balance, and on this we are running massive trade deficits in goods production, which have been increasing since the end of the recession.

Since employment in the United States hit its recent low, in February 2010, the economy has added 2.4 million jobs through November,

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Oops, Never Mind: BCG Gets it Wrong on U.S. Manufacturing and China

A major consulting firm recently released a study that predicted, “within the next five years, the United States is expected to experience a manufacturing renaissance as the wage gap with China shrinks and certain U.S. states become some of the cheapest locations for manufacturing in the developed world.” The study received widespread attention in the media, desperate as we have become for any good news.

Contrast that to another study by a consulting firm that came to the exact opposite conclusion: “We maintain, in contrast, that the cost gap not only is unlikely to close within the next 20 years, but in some cases may actually increase.” So which study should we believe, the one that says don’t worry, the cost gap is closing, or the one that says it’s increasing and even more manufacturing will be decamping America for China?

One way would be to put our faith in the consulting firm that has the better reputation for doing good analysis. The only problem is that both studies, believe it or not, were produced by the same firm: the Boston Consulting Group. Now BCG might say we should cut

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