President Obama Calls for Creation of a National Network for Manufacturing Innovation in State of the Union Address

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In his State of the Union address this evening, President Obama called on Congress to support creation of a network of at least fifteen manufacturing innovation institutes that would bring together industry, universities, community colleges, federal agencies, and states to accelerate innovation by investing in industrially relevant manufacturing technologies with broad applications. The first institute in this network, the National Additive Manufacturing Innovation Institute, launched in Youngstown, Ohio in August 2012 to pioneer additive manufacturing and 3D printing technologies and tonight the President announced the launch of three more of these manufacturing hubs “where businesses will partner with the Departments of Defense and Energy to turn regions left behind by globalization into global centers of high-tech jobs.

As ITIF explains in Why America Needs a National Network for Manufacturing Innovation, these institutes are poised to play a pivotal role in spurring U.S. industrial competitiveness and revitalizing American manufacturing by helping bridge the gap between basic research and product development, providing shared assets to help companies (including small- to medium-sized enterprises, or SMEs) access cutting-edge capabilities and equipment, and creating a compelling environment in which to educate and train students and workers in advanced manufacturing skills.

The President also called for continued robust investments in life sciences research, noting that every dollar the federal government invested in mapping the human genome returned $140 to our economy, and played an instrumental role in helping develop new therapies and drugs that have helped address a range of medical challenges including regenerating damaged organs or combating Alzheimer’s. He further stressed—as ITIF does in its report Eroding Our Foundation: Sequestration, R&D, Innovation and U.S. Economic Growth—that Congress must not allow the looming sequestration to “devastate priorities like education, energy, and medical research.” Indeed, as ITIF notes in that report, unless altered the sequestration path will result in significant cuts to federal R&D investments from the years 2013 to 2021, leading to GDP losses of up to $860 billion. This would be devastating for sectors like the U.S. life sciences industry, whose global leadership as ITIF notes in Leadership in Decline: Assessing U.S. International Competitiveness in Biomedical Research is already under threat. The sequestration would slash NIH funding by at least 7.8 percent, leading to a $2.4 billion reduction in 2013, the largest cut in the agency’s history. This at a time when, even if current U.S. federal R&D investment levels hold, the U.S. government’s investment in life sciences research over the ensuing half-decade is likely to be barely half that of China’s in current dollars, and roughly one-quarter of China’s level as a share of GDP.

As the President correctly states in his State of the Union Address, “Now is not the time to gut these job-creating investments in science and innovation.” Indeed, as David Brooks wrote this morning in his New York Times article, Carpe Diem Nation, policymakers must make a crucial distinction between federal expenditures that constitute spending and those that constitute investment that are poised to generate future streams of wealth for American society. This generation must not only not leave the next generation with large deficits but it must also continue to make robust investments in basic and applied research and development, education, and infrastructure if future generations are going to continue to enjoy the standards of living Americans have come to expect.

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