Summit ’18: Innovation to Boost National Wealth and Security

How do we bring big ideas to market?

There’s no doubt: America’s $140 billion federal investments in research and development activities are creating meaningful knowledge.

But are these investments boosting our national wealth and security?

It’s an open question. In fields including energy storage, flexible electronics, nanotechnology, predictive analytics, we’re seeing a troubling trend: Foreign governments and investors are seizing the fruits of U.S. basic research investments, building their own production capacity, and exporting products back to U.S. shores.

The consequences are clear: In spite of our world-leading investments in R&D, the nation’s annual trade deficits in advanced technology products still hover around $100 billion.

MForesight’s new flagship report — Manufacturing Prosperity — identifies a series of critical next steps for addressing “grand challenges” to U.S. manufacturing. The report’s first identified step — investing in translational research and manufacturing innovation — seeks to address this critical challenge.

Restoring capacity to generate wealth and security outcomes from R&D investment should be a top national priority for policymakers. It’s a unifying principle.

While the innovation cycle — how we convert new inventions and discoveries into successful commercial product — is functioning impressively well in the software space, it isn’t currently serving our national interests in manufacturing or “hardware.”

There’s a dearth of funding for the translational research needed to develop operational prototypes, demonstrate manufacturability, and identify viable markets. The result is that promising technologies are either languish in laboratories or willingly transferred to other countries for further development and scaling. Funding and expertise are needed to address the needs and ensure domestic production.

Prof. Willy Shih

As Professor Willy Shih of Harvard Business School described in his policy keynote at the 2018 MForesight National Summit: “We typically talk about translational research just in medical and clinical research, but it goes way beyond that.” We need a bigger national strategy for translational research.

We should do more to leverage promising ideas that come from public funding to create new platform technologies and U.S. jobs in advanced manufacturing.

When it comes to boosting national wealth and security, there are options for getting a real return on investment for the tax dollars we put into science and tech research. We have to start taking innovation outcomes seriously.

The Manufacturing Prosperity report puts forward solutions that policymakers can implement in the near-term. The report reveals significant gaps in our innovation pipeline, including lack of investment in translational R&D, manufacturing process technologies, hardware start-ups and scale-ups. Federal investments do currently seek tomature technology readiness levels(TRLs) to a certain extent, but focus little attention on maturing manufacturing readiness levels (MRLs). This lack of focus on manufacturing technologies has not only accelerated the dangerous trend of “invent here, manufacture there,” but it has reached its logical conclusion — “invent there, manufacture there”

While tax, trade, and regulation policies could help existing industries, these steps do little to enable creation of new industries focused on emerging technologies.

Manufacturing cuts across multiple disciplines and missions of various federal science and technology agencies. So it stands to reason that we need a central focal point for manufacturing R&D within the federal government. This is a key missing element in America’s R&D ecosystem. Throughout the Manufacturing Prosperity process, experts and policymakers recommended the creation of a new central office such as a National Innovation Foundation.

Another solution, Translational Research Centers (TRCs) would be independent non-profit corporations affiliated with one or more universities. TRCs would combine funding with expertise in product development, engineering, production, marketing, and other business functions needed to identify and nurture promising research results into commercial products and processes manufactured in this country. TRCs would provide needed skills relevant to commercialization; they would moreover help to lower the risk of commercialization and create stronger pipelines from academic R&D to new products. The aim would be sweeping: To ensure positive impacts on national security and economic outcomes. As Bill Bonvillian of MIT put it at the 2018 Summit: “It’s always terrifying to propose new institutional fixes — they’re hard to do…but Translational Research Centers are worth it.” They’re a cost-effective and potentially-transformative solution.

Panelist Bill Bonvillian (MIT)

Universities are natural focal points for this work. But, as Charles Zukoski, Provost of the University at Buffalo, pointed out: “universities are designed to curate and transfer knowledge to the next generation.” We need to be thinking critically about how to empower universities to use their broader assets to transfer technologies — turning good ideas into useful products.

Panelists Joe Beaman (University of Texas at Austin), Jill Sorensen (SC Launch), and Charles Zukoski (University at Buffalo)

Another actionable idea is the establishment of new Manufacturing USA institutes. While existing institutes are mostly focused on specific technologies like flexible electronics, robotics, and bio-pharmaceutical, new institutes could seek to rebuild foundational manufacturing know-how and promote platform manufacturing technologies for multi-industry applications. In line with this “big-picture” orientation, they could focus on continuous improvement of widely-used manufacturing processes and work closely with domestic equipment makers to speed technology dissemination to commercial industry. In areas like metal forming, joining technologies, and laser processing, these new institutes could provide critical help. This, in turn, could advance U.S. competitiveness.

Innovation competitions present another option. Such competitions have proven to be an effective method for generating creative solutions to technical challenges in a variety of fields from engineering to financial services. They’ve been used by government agencies like DARPA, non-profits such as XPRIZE, and private manufacturers like General Motors to essentially “crowdsource” innovation. The goal of new competitions would be to engage researchers to focus on significant manufacturing challenges — creating new capabilities in key industries and providing U.S. producers with competitive advantages in key industries. As Sue Babinec of the Department of Energy emphasized, we need clear national goals — modern Manhattan Projects — to catalyze broad-based innovation. The contest model could follow this mode of thinking. For example, federal agencies could invest in defining a number of “moonshots” — important, long-term national objectives requiring advances in manufacturing technology and product innovation — and creating open, incentive competitions to answer each call.

The challenges are daunting, but the takeaway from MForesight’s new research is clear: solutions are available.

At the 2018 Summit, Eric Chewning, Deputy Assistant Secretary of Defense for Manufacturing and Industrial Base Policy, underscored that translational research is essential — not only for economic development but also defense readiness.

Eric Chewning (right), chatting with Master of Ceremonies, Oisin Lunny, and attendees.

As MForesight’s Executive Director Sridhar Kota pointed out at the Summit, the world’s leading manufacturing nations, including Germany and South Korea, spend far larger proportions (Germany 12%; Japan 7%; S. Korea 30%; U.S. 0.5%) of their national R&D budgets on Industrial Production and Technology.

This is a moment of opportunity for the United States. Because of a confluence of economic and technological forces, the nation now has an opportunity to rebuild its manufacturing base and restore its global competitiveness. The new parameters play to American strengths: flexibility and adaptability, a large capital market, superior higher education, and the world’s leading R&D capacities.

America can’t afford to keep outsourcing innovation. It’s time for sustained action to ensure we can move good ideas from laboratories to market.