Thank you, Chairwoman Stevens, Chairman Lamb, Ranking Member Baird, Ranking Member Weber, and members of the Subcommittees. I am Mike Molnar, Director of the Office of Advanced Manufacturing at the U.S. Department of Commerce’s National Institute of Standards and Technology (NIST). In this capacity, I also serve as the Director for the interagency Advanced Manufacturing National Program Office (AMNPO). Thank you for the opportunity to testify today about the Manufacturing USA initiative, early successes, and opportunities for even greater impact for U.S. manufacturing and the nation’s competitiveness.
Background Need and Origin of Manufacturing USA
A strong U.S. manufacturing sector is essential to our economic and national security. American manufacturers contribute more than $2.4 trillion to the U.S. economy.1 Manufacturing also makes up 8.5 percent of U.S. nonfarm employment2 and 11.4 percent of U.S. GDP3 yet drives 60 percent of exports4 and an astounding 70 percent of private-sector research and development (R&D).5 Manufacturing and the strength of the U.S. manufacturing supply chain also are critical to national security.6
There are not enough workers with the right skills to fill current and future manufacturing jobs. Deloitte and the Manufacturing Institute report that, over the next decade, nearly 3.5 million new manufacturing jobs will be needed;7 with 2 million of those jobs expected to go unfilled due to the shortage of skilled workers.
In addition, the United States has been a net importer of advanced technology products since 2002.8 This trade deficit in advanced manufacturing is historically unprecedented for a nation that leads the world in science and technology research. Our country has a great culture of discovery and innovation. And manufacturing is where innovation happens. While the United States leads the world in invention and discovery, other nations have focused on developing these emerging technologies for production. Capitalizing on U.S. inventions and promoting the training of an effective workforce is Manufacturing USA’s mission.
Advanced manufacturing is a top priority for this Administration and is included as one of four Industries of the Future. The race for leadership in advanced manufacturing hinges on innovation, and transitioning those innovations into production, which both creates and requires good jobs. Innovation is an American strength. Competitor nations have significantly increased their efforts in and support of applied research, often leveraging discoveries originally made by U.S. researchers. Our investments in production innovation can help restore our technological competitive edge in manufacturing and promote the manufacture of U.S. technological innovations in the United States.
The Role of Our Network
With passage of the bipartisan Revitalize American Manufacturing and Innovation (RAMI) Act,9 Congress authorized the establishment of the National Network for Manufacturing Innovation Program, or Manufacturing USA. This law authorizes the Secretary of Commerce to establish and coordinate manufacturing innovation institutes and to collaborate with federal departments and agencies whose missions contribute to, or are affected by, advanced manufacturing.
The Manufacturing USA program is about helping industry move discoveries from the Nation’s universities and research laboratories to the domestic production floors that are equipped with the necessary skilled workforce.
The federal role in these public-private partnerships serves to create a “neutral convening ground” where industry and academia collaborate on applied research, addressing the most important opportunities facing U.S. manufacturers. Manufacturing USA institutes have a mission to develop both game-changing manufacturing technology and to train workers with the skills needed for future U.S. manufacturing.
As shown in Table 1, 14 Manufacturing USA institutes are sponsored by the Department of Defense (DOD), the Department of Energy (DOE), and NIST at the Department of Commerce. The program is coordinated by the Advanced Manufacturing National Program Office, located at NIST, which works with the other two institute-sponsoring agencies, DOD and DOE, along with the Departments of Agriculture, Education, Labor, and Health and Human Services, the National Aeronautics and Space Administration, and the National Science Foundation in the broader interagency team. This is truly a team effort.
It is important to note that the RAMI requirements are applicable only to institutes established by DOC/NIST; institutes sponsored by DOD and DOE were established under separate legal authorities and NIST has no role in the management of the institutes sponsored by other agencies. NIST does have the responsibility to convene the network of institutes, communicate about the work of the network to the public, facilitate information and knowledge-sharing among the network, scale workforce efforts, and deliver a report on the network’s performance to Congress each year.
What the Institutes Do and Why it Matters
There are currently 14 Manufacturing USA institutes. Collectively, the institutes:10
Key goals of the Manufacturing USA institutes are to: 1) increase the competitiveness of U.S. manufacturing; 2) facilitate the transition of innovative technologies into scalable, cost-effective, and high-performing domestic manufacturing capabilities; and 3) accelerate the development of a skilled advanced manufacturing workforce.
The institutes focus on developing a broad range of manufacturing capabilities in promising new advanced technologies that have the potential for high impact on the economy, on national security, and on the workforce of the future. Bringing together the best minds from industry, academia, and government to tackle tough manufacturing challenges helps to strengthen and expand the manufacturing base of the nation.
Serving Small- and Medium-Sized Manufacturers
Manufacturing USA also works with the NIST Manufacturing Extension Partnership Program to serve small and medium-sized manufacturers, which are 99 percent of all manufacturers, critical to local economies, and an integral part of the U.S. supply chain. MEP equips small- and medium-sized manufacturers with the resources needed to grow and thrive—working side-by-side with manufacturers to reduce costs, improve efficiencies, develop the next generation workforce, create new products, and find new markets.
Federal Agency Connections
Each institute has a sponsoring federal agency working in partnership with the institute consortia on direction and management. Through our interagency approach, other federal agencies are engaged with Manufacturing USA institutes in significant supporting roles. For example, NIST laboratory programs have technical collaborations with, and provide subject-matter experts to, all 14 Manufacturing USA institutes. NIST has a senior scientist acting as a technical lead for each institute, who coordinates with NIST laboratory resources and aids in standards and technical roadmapping activities.
Industry Advances in Technology Enabled by Manufacturing USA Institutes
The collaborative innovation enabled by the Manufacturing USA institutes has resulted in products that assist workers, make buildings safer, consume less energy, and save lives. Some examples of the hundreds of ways in which Manufacturing USA institutes create research collaborations that enable member companies and their partners to produce innovative products in the United States include:
Developing an Advanced Manufacturing Workforce for the Future
In a healthy economy, workers are trained for new, higher-paying, advanced manufacturing jobs in emerging technology-driven manufacturing sectors. Advanced manufacturing has been the cornerstone of a robust economy and a solid middle class in the United States over the past century.
These new jobs require a workforce with new skills suitable for advanced manufacturing, so workforce development and education is a priority for Manufacturing USA and directly support’s the Administration’s priorities in science, technology, engineering, and mathematics (STEM) education. Institutes partner with educational organizations and industry partners to teach advanced manufacturing technologies through workshops, courses, internships, and apprenticeships in order to create the workforce of the future.
The Manufacturing USA Education and Workforce Development Team has more than 50 members, including institute education and workforce directors, human capital and STEM-educational experts, and representatives from seven participating federal agencies.11 The group develops partnerships and shares lessons learned, success stories, and initiative updates. It provides a cohesive platform for newer institutes to partner with older institutes and to develop processes based on proven models. The team’s sharing of roadmapping models has led to project partnerships and to the creation of advisory committees across many of the institutes. The team’s collaborative online portal, provided by AMNPO, allows for knowledge management, including sharing of hundreds of items, such as institute workforce assessment reports, project call guides, presentations, meeting reports, and industry reports.
Last year, we saw tremendous growth in institute-led workforce efforts in advanced manufacturing, educator and trainer instruction, and STEM activities, resulting in over 191,000 workers, students, and educators participating in Manufacturing USA-led workforce efforts. Education and workforce development initiatives include: summer internships for high school, vocational, community college, and university-based students; educational resources for K-12 educators; career workshops for middle and high school students; technology specific workshops for manufacturing employees; and programming for upcoming funding opportunities on manufacturing jobs training.
Institutes and national partners are creating programs to train new workers and to retrain existing workers and military veterans, as well as to educate and train students to equip them with the skills they need for high-paying jobs in the modern manufacturing sector. Some of these projects include:
In Silicon Valley alone, FlexFactor has trained over 2,000 students. Early in 2018, FlexFactor launched with Lorain County Community College near Cleveland, Ohio, and has since grown from 17 students to over 700 participants in less than a year. The Boeing Company recently partnered with NextFlex and the Alabama Community College System to bring FlexFactor to schools in Northern Alabama where Boeing’s manufacturing operations require a variety of technician and technologist talent.
Global Competition—What Other Countries Are Doing
The United States leads the world in innovation and inventions, yet many U.S. research discoveries are incorporated into manufacturing capabilities and cutting-edge products made in other countries. Global competition has made it unaffordable for most individual companies to transition inventions from the lab to mass production. In countries known for their manufacturing strength, such as China and Germany, this transition is facilitated by coordinated planning and national investments in advanced manufacturing programs, supporting the private sector’s push to develop new manufacturing processes and products.12
Although the United States has established 14 Institutes, that is many fewer than the German counterpart, Fraunhofer, which has 69 institutes and China’s planned 40 institutes. In 2018, Canada awarded $950 million for five innovation “advanced manufacturing superclusters,” which are like our consortia of small and large business, academia, and others.13
China Manufacturing 2025 is one of China’s key policies to reach the goal of “a strong country in manufacturing” or “a global manufacturing power.” China Manufacturing 2025 is one of six key national policies that include: Reforming the One-Child Policy; National Defense; Establishing Rule of Law in the Economy; Encouraging Entrepreneurship; and Urbanization. The significance of each of the other policies underscores the importance which China attaches to its manufacturing initiative. The United States is taking strong actions to address the problematic Chinese policies implementing this initiative, which are designed to promote the development of Chinese industry in large part by restricting, taking advantage of, discriminating against or otherwise creating disadvantages for foreign enterprises.
Just last month, the German government announced a “National Industry Strategy 2030” in which, among other things, the German government may review and reform existing subsidy and competition law, allowing for time-limited subsidies in areas of innovation having a high impact on the economy, as well as company mergers in sectors where size is an absolute necessity for future global economic success.14
The Path Forward
In closing, I like to highlight what we often use as somewhat of a Manufacturing USA tagline: “Securing America’s Future.”
In October, the White House released the quadrennial Strategy for American Leadership in Advanced Manufacturing, which is based on a vision for American leadership in advanced manufacturing across industrial sectors to ensure national security and economic prosperity.
To achieve this vision, the strategy defines three goals:
The Manufacturing USA program is working in support of all three of these goals. Collectively, the Manufacturing USA institutes are moving ideas into production and are training workers in the skills needed for tomorrow’s high-paying, high-skill advanced manufacturing jobs.
Thank you for the opportunity to testify about NIST’s role in coordinating the Manufacturing USA program and the large-scale, collaborative innovations happening across the country at the Manufacturing USA institutes. I will be pleased to answer any questions you may have.
1 Bureau of Economic Analysis, U.S. Department of Commerce, https://apps.bea.gov/iTable/iTable.cfm?reqid=51&step=51&isuri=1&startye…
2 U.S. Department of Labor, Bureau of Labor Statistics, (2019), https://data.bls.gov/timeseries/CES0000000001 and https://data.bls.gov/timeseries/CES3000000001.
3 Bureau of Economic Analysis, U.S. Department of Commerce https://apps.bea.gov/iTable/iTable.cfm?reqid=51&step=51&isuri=1&startye…
4 International Trade Administration, U.S. Department of Commerce (2017), http://tse.export.gov/tse/TSEOptions.aspx?ReportID=2&Referrer=TSEReport….
5 McKinsey Global institute, Making it in America: Revitalizing U.S. Manufacturing, S. Ramaswamy, J. Mayika, G. Pinkus, K. George, J. Law, T. Gambell, and A. Serafino, McKinsey Global Institute pgs. 75 (2017), https://www.mckinsey.com/~/media/McKinsey/Global%20Themes/Americas/Maki…. Nov 2017
6 National Security Strategy of the United States of America, Executive Office of the President, pgs. 55 (2017), https://www.whitehouse.gov/wp-content/uploads/2017/12/NSS-Final-12-18-2….
7 Deloitte and the Manufacturing Institute, The skills gap in US manufacturing: 2015 and beyond, C. Giffi, J. McNelly, B Dollar, G. Carrick, M. Drew, and B. Gangula, Deloitte Development LLC, p. 5, (2015)
8 Producing Prosperity: Why America Needs a Manufacturing Renaissance; Harvard Business Review Press 2012
9 Consolidated and Further Continuing Appropriations Act, 2015, Pub. L. 113-235, Title VII – Revitalize American Manufacturing and Innovation Act of 2014, codified at 15 U.S.C. § 278s, http://uscode.house.gov/view.xhtml?req=(title:15 section:278s edition:prelim).
10 Manufacturing USA Annual Report, Fiscal Year 2017, Advanced Manufacturing National Program Office, National Institute of Standards and Technology, Department of Commerce (2018), https://doi.org/10.6028/NIST.AMS.600-3.
11 The Departments of Commerce, Defense, Energy, Labor, and Education; the National Science Foundation, and the National Aeronautics and Space Administration.
12 See Invented in America, Scaled Up Overseas, E. Reynolds and H. Samel, Mechanical Engineering Magazine (2013), https://www.asme.org/engineering-topics/articles/manufacturing-processi… and Restoring American Competitiveness, G. Pisano, and W. Shih, Harvard Business Review (2009).