Majority Statement

• Senator John D. (Jay) Rockefeller IV

  Chairman

  U.S. Senate Committee on Commerce, Science, and Transportation
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  Majority Statement

  Senator John D. (Jay) Rockefeller IV

  Today, the Committee seeks a solution to our nation’s economic drift away from our commitment to manufacturing. This drift threatens our long-term growth, our position at the forefront of global technological innovation, and our national security. Just last week, we held a hearing about how investments into basic research and development really are the core of American ingenuity. 

  If we’re going to continue to lead and compete in the global economy, we have to protect our lead in science and research. But the flow of federal funding isn’t certain right now. That’s why we have hearings in this Committee – we’re worried about the path this country is on and we desperately want to help. Today’s hearing builds on that conversation. Just as R&D will lead to new scientific discoveries and product innovations, these investments are crucial for the long-term growth of the manufacturing sector.   

  Innovation and manufacturing have long come together to form the backbone of the American economy.  Great ideas conceived by American scientific minds were then molded and built by American hands. The steel we milled, the automobiles and planes we produced, and the computers we made won us World Wars, spurred our economy, and secured the livelihoods of our great middle class. But, unfortunately, success stories are becoming all too rare. In the last decade, we have wasted promising scientific research and have failed to translate technological success into manufacturing growth and jobs. 

  Factories have vanished across the country, and with those factories gone, we’ve lost the jobs, the know-how, and the infrastructure that feed the manufacturing sector and many, many local communities. The list of products we’ve already lost is too long to recite. Laptop computers, flat-panel displays, lithium-ion batteries, solar cells, and semiconductors are all examples of products that were invented here but now are produced overseas. They all have driven – and will continue to drive – the global economy. But the skilled workers, infrastructure, and knowledge to manufacture them are no longer based in the United States.  

  Meanwhile, foreign countries are taking the technological innovations created by American hands and brains and using them to their economic advantage. And, these countries are investing in even greater support for their manufacturers to help them bring new, better, and cutting-edge products to market. The United States must do the same – it must continue to invest in programs that help keep production in the United States and commercialize technologies wherever they are conceived.  

  Experts say a key problem for U.S. manufacturing is the so-called “valley of death” – the gap between invention and commercialization that dooms many manufacturers today. It is vital that we bridge this gap – that is, we must help transform the brilliant scientific discoveries taking place in university laboratories into real-world applications on the factory floor. Today, we will be hearing about proposals that seek to bridge that very gap.  

  The proposals would establish a public-private network of manufacturing hubs, each dedicated to a particular technology that holds promise to help America stay ahead of our global competitors. In short, these hubs would help our economy by lending a hand where the free market doesn’t work well – the risky and uncertain period that stands in the way between great inventions and great commercial products. These hubs would leverage our scientific research and close the “valley of death.”

  Already, a pilot institute in Youngstown, Ohio, has shown the economic promise of this proposal.  That institute has brought together the private sector, public sector, and academia to solve common problems in additive manufacturing, also known as “3D printing.” This institute is bringing us closer to the day when household products, industrial parts, artificial limbs, and even human tissue can easily and cheaply be created from scratch from a digital code that involves no assembly or parts. The implications of this technology are enormous, and, because of the pilot institute, may soon play a role in strengthening our manufacturing sector and the rest of the nation’s economy. 

  I look forward to hearing from the witnesses today on this initiative and their ideas to strengthen U.S. manufacturing, and I thank them for appearing before this Committee. 

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Minority Statement

• Senator John R Thune

  Ranking Member

  U.S. Senate Committee on Commerce, Science, and Transportation
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  Minority Statement

  Senator John R Thune

  Mr. Chairman, I want to thank you for holding this hearing on efforts to promote U.S. manufacturing and advance our innovation economy. 

  There is no question that manufacturing is critical to our nation’s economy and our global competitiveness. We see evidence of this in each of our states. 

  In my home State of South Dakota, more than a thousand manufacturing firms support more than 41,000 jobs, or roughly 10 percent of the state’s workforce. Manufacturing comprises 9.4 percent of South Dakota’s economy, contributing $4 billion to the state’s GDP. And in 2012, as reported by the Governor’s Office of Economic Development, South Dakota had the fifth largest increase in manufacturing among the 50 states. 

  I would add that South Dakota is a great partner when it comes to providing low costs for doing business. In fact, CNBC ranked South Dakota as the top state for business in 2013. This is attributable not only to the low tax burden – no individual or state income taxes and low sales and property taxes – but also to the low utility rates and favorable legal and regulatory climate.

  South Dakota, like most of our states, also participates in programs managed by the Department of Commerce to promote domestic manufacturing. For example, in January of this year, the Manufacturing Extension Partnership, or MEP, run by the Commerce Department’s National Institute of Standards and Technology, awarded cooperative agreements of $400,000 to South Dakota Manufacturing and Technology Solutions to support the first MEP center in the state in 10 years. The new center is based at the University of South Dakota in Vermillion, and is part of its Small Business Development Center network.

  So, I appreciate that the federal government has a role to play in promoting U.S. manufacturing. Today we’ll begin an examination of what that role should be, with a particular focus on the administration’s proposal to create a network of manufacturing hubs – a proposal that is largely embraced in legislation recently introduced by Senators Brown and Blunt.

  I welcome Senator Brown to the committee today. I look forward to hearing from him and our colleague on the Committee, Senator Blunt, about their legislation, which enjoys the support of groups like the National Association of Manufacturers and the Semiconductor Equipment and Materials International. I also welcome Secretary Pritzker back to the committee for her first appearance since being confirmed. And, I look forward to the perspectives of our impressive panel of industry witnesses – several of whom are experienced at turning cutting-edge research into commercial products.

  I hope that, as we examine the issue of how best to ensure U.S. leadership in advanced manufacturing, we will do so with an eye towards maximizing value for the taxpayers and avoiding duplication with the host of existing government programs. Also, while perhaps outside the scope of this committee’s jurisdiction—if we admit any limits to our jurisdiction—we should acknowledge that there are several policies that may hold even greater promise for incentivizing innovation and manufacturing. These include eliminating barriers to free trade and enacting meaningful tax reform, including a competitive territorial tax system that will strengthen the ability of U.S. companies to compete with global competitors – not to mention the long-overdue need to reinstate Trade Promotion Authority that, until recently, hasn’t been a priority of the Obama administration. 

  We also cannot ignore the importance of regulatory reform when it comes to our competitiveness in manufacturing. Just two weeks ago, the National Association of Manufacturers announced that our former colleagues Blanche Lincoln and George Allen will co-chair the Manufacturing Competitiveness Initiative, an effort aimed at examining and highlighting the competitiveness challenges facing manufacturers. Among the first issues this bipartisan initiative will address is the impact of unnecessarily burdensome regulations on U.S. manufacturers.

  With that said, Mr. Chairman, I thank you again for calling today’s hearing and thank our witnesses for their testimony. 

Opening Remarks

• The Honorable Sherrod Brown

  United States Senator

  Ohio

Testimony

• The Honorable Penny Pritzker

  Secretary of Commerce

  U.S. Department of Commerce
  Download Testimony (6.56 MB)

Witness Panel 2

• Mr. Eric A. Spiegel

  President and CEO

  Siemens Corporation
  Download Testimony (15.68 KB)

• Dr. Martin A. Schmidt

  Associate Provost and Acting Provost, Professor of Electrical Engineering

  Massachusetts Institute of Technology
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• Mr. Michael S. Garvey

  President and CEO

  M-7 Technologies
  Download Testimony (177.09 KB)

• Dr. Terry Brewer

  President

  Brewer Science, Inc.
  Download Testimony (219.92 KB)