From ARPA-E: 7 thoughts about the state of U.S. manufacturing - SmartBrief

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From ARPA-E: 7 thoughts about the state of U.S. manufacturing

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The ARPA-E Energy Innovation Summit annually showcases the importance of emerging technologies and sustaining them until they can get venture capital. But this year’s event last week was also a de facto referendum on the problems facing U.S. manufacturing.

It wasn’t just the obvious sessions – “Barriers to Domestic Manufacturing” and “Obstacles to a Manufacturing Workforce” – but also speakers repeatedly emphasizing similar sentiments and attendees sharing their stories in panel sessions or on Twitter. These were some of the most general consensus points:

  • U.S. universities are still the world’s best, but our outdated immigration/visa policy means we lose too many of the best foreign-born, American-trained minds. Decades ago, “people were willing to put up with the indignities of the U.S. immigration system because there wasn’t a good second choice,” said Susan Hockfield, president of the Massachusetts Institute of Technology. Now, they have options.
  • Universities and industry are often in different “silos,” missing key opportunities to collaborate and advance technology. Clean-energy technology can’t scale up quickly without the knowledge of market leaders already supplying large populations with energy, said Hockfield.
  • Companies have difficulty finding workers with the right skill set and often have to bring them in from overseas – or move production there. Xerox CEO Ursula Burns talked extensively Wednesday about the importance of improving not just education, but also of adopting the mindset of “how can we do this” rather than “we can’t do this.” For MEGE Associates’ Bruce Sohn in Tuesday’s initial manufacturing panel, he said today’s youth need more exposure to what modern factories look like. They are generally unfamiliar, but then visit and say, “I didn’t know manufacturing was so cool.” Another misconception about today’s manufacturing jobs is that many people don’t realize they often require education and/or training beyond high school, said Matthew Ganz of Boeing Research & Technology.
  • Manufacturing is often divorced from research and development, which can help with the vital task of lowering production costs, said Boeing’s Ganz. “There are no more important technologies that we can develop than those for manufacturing and assembly,” he said, and Hockfield was among others who emphasized the need for innovation to live in manufacturing. “Let manufacturing innovations drive product design, not vice versa,” said Christine Furstoss of General Electric Global Research. Furthermore, those sentiments reflect the reality, which is that 60% of American scientists and engineers have jobs in manufacturing, according to the DOE’s Leo Christodoulou.
  • The U.S. is a leader in intellectual property and productivity. U.S. respect for intellectual property led Atul Kapadia, CEO of Envia Systems, to make cost secondary in siting production in California instead of China. And for all of the woes of American manufacturing, Hockfield said, the U.S. has a tremendous global edge in productivity.
  • Regulation is not necessary despised, but uncertainty is, and so is a punitive-first approach. Fred Smith of FedEx said the fundamental question was this: “How do you create an environment that holds them accountable” while making it feasible and desirable to invest in domestic manufacturing? On the corporate-tax front, former President Bill Clinton announced that he was the last president to raise that tax, but that today was a different situation. His proposal is to “broaden the base, reduce the reductions and lower the rates.”
  • There’s no one sure answer. Officials and executives offered some possible fixes, but on the larger issue of reviving manufacturing, Smith may have spoken for many: “Beyond the lip service … what do we do to make manufacturing want to come back to this country? I don’t know if the government has the answer right now.”