U.S. Manufacturing Renaissance

EPTA Conference, October 28, 2014

Naba Barkakati, Ph.D.Chief Technologist

U.S. Government Accountability Officewww.gao.gov

U.S. Manufacturing overview

● U.S. is world's second largest manufacturer; 20% of global manufacturing output.

● Manufacturing was fifth of the U.S. economy in the 1980s, but 12.4% of GDP in 2013.

● For every $1.00 spent in manufacturing, another $1.32 is added to the economy

● U.S. manufacturing output increased 30% since the end of 2008 recession

U.S. Manufacturing Gross Output

U.S. manufacturing productivity

Positive signs:

(1) Capital spending on industrial equipment is up 14.7% annually through second quarter of 2014, the fastest increase since late 2011.(2) Factory orders for industrial machinery reached a record high during July 2014. Nondefense capital goods orders excluding aircraft also rose to a record high during August 2014.

Government programs in U.S. and other countries to support manufacturing

GLOBAL MANUFACTURING: Foreign Government Programs Differ in Some Key Respects From Those in the United States, GAO-13-365: Published: Jul 25, 2013. http://www.gao.gov/products/GAO-13-365

U.S. Advanced Manufacturing Initiatives

National Network for Manufacturing Innovation (NNMI) consist of regional hubs —public-private partnerships called Institutes for Manufacturing Innovation (IMIs):● National additive manufacturing innovation (now known as America Makes

), August 2012, initial funding $50 million● Next generation power electronics, Jan 2014, $140 million● Digital manufacturing and design innovation, Feb 2014, $70 million● Lightweight & modern metals innovation, Feb 2014, $70 million

Other initiatives:● National nanotechnology initiative (NNI) -- $17.9 billion since 2003● Materials genome initiative, 2011, $250 million on R&D since launch● Clean energy manufacturing initiative● Innovative manufacturing initiative

Technological trends contributing to resurgence of U.S. manufacturing

3D Printing (Additive Manufacturing)

Human-friendly industrial robots

Nanomaufacturing

Challenges● U.S. funding gap in the middle of the innovation process● Lack of commercial or environmental, health, and safety (EHS) standards● Lack of a U.S. vision for nanomanufacturing● Prior offshoring in some industries with unintended consequences ● Threats to U.S. intellectual property

Potential Actions● Support nanotechnology R&D ● Develop international commercial nanomanufacturing standards, ● Develop revitalized, integrative, and collaborative approach to EHS issues.

Source: NANOMANUFACTURING: Emergence and Implications for U.S. Competitiveness, the Environment, and Human Health, GAO-14-181SP (Jan 31, 2014). http://www.gao.gov/products/GAO-14-181SP

Looking to the future...

● First two industrial revolutions created economic growth and prosperity for all● The third, digital revolution, promises to restructure manufacturing, but may be

more divisive -- many jobs are at high risk of being automated away, creating a split between skilled and wealthy few and the rest of the society

● Challenge for governments is to craft policies that harness the technology while minimizing the societal disruption

The third wave, Special report, The Economist, Oct 4-10, 2014: http://www.economist.com/news/special-report/21621156-first-two-industrial-revolutions-inflicted-plenty-pain-ultimately-benefited

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