Innovation Needs to be a Central Focus of the Federal Budget Thomas Niedermueller, Getty Images

Innovation Needs to be a Central Focus of the Federal Budget

The budget contains several cost-effective proposals to improve technology transfer among universities, public and private research labs, and companies bringing innovations to global markets. Congress would be wise to give those programs and investments serious consideration this Spring.

As American manufacturing continues its slow recovery from the Great Recession, improved competitiveness and innovation need to remain strong federal priorities. It’s therefore heartening to note that the President’s FY 2016 budget request illustrates the administration’s belief in the power of public/private research partnerships to restore American industry’s competitive edge in advanced industries.

The budget contains several cost-effective proposals to improve technology transfer among universities, public and private research labs, and companies bringing innovations to global markets. Congress would be wise to give those programs and investments serious consideration this Spring.

First and foremost is the President’s call for a significant expansion of the National Network for Manufacturing Innovation (NNMI), a unique public-private-university partnership designed to bridge the gap between basic research performed at U.S. universities and research laboratories and product development and commercialization by U.S. manufacturers.

The network consists of manufacturing innovation centers, tied with American research universities in regions with significant existing capacity in targeted industries. Currently five centers are operating—focused on additive manufacturing, next-generation power electronics, digital manufacturing and design innovation, lightweight and modern metals manufacturing, and advanced polymer composites—and at least four more are in the planning stages—including ones focused on photonics, smart manufacturing, and flexible hybrid electronics manufacturing.

The President’s budget proposal builds on the nine institutes already funded through 2015 with more than $350 million in ad­ditional discretionary funds to support seven new manufacturing institutes to be stood up by the Departments of Agriculture, Commerce, Defense, and Energy. Longer term, the President’s budget requests a total of $1.9 billion to fund a fully-formed, 45-Institute network featuring centers in nearly every region of the country.

As ITIF has written, NNMI will promote the rapid transition of basic research to market, advance the development of a host of new industries in the United States, and significantly strengthen the overall U.S. innovation ecosystem.

The budget also provides funding for the National Institute of Standards and Technology’s (NIST) Hollings Manufacturing Extension Partnership (MEP) program, a vital yet unheralded agency which supports America’s small-to-medium-sized manufacturers as they adopt new technology, introduce more efficient manufacturing operations, develop new products and customers, and expand into global markets.

Unfortunately, other countries invest significantly more in their manufacturing support programs than the United States. In fact, as a share of GDP, Japan invests thirty times more and Canada almost ten times more. Congress should look to increase MEP funding to at least $200 million annually if we wish to keep pace with our global competitors. Still the Administration’s request for $141 million in FY 2016 does improve over last year’s funding level.

Also of note is the Administration’s $4 million request for NIST’s efforts to accelerate and expand technology transfer activities across the federal government and $30 million for the public-private NSF I-Corps program, which aims to bring together the technological, en­trepreneurial, and business know-how necessary to bring discoveries ripe for innovation out of university labs. The budget further invests in innovation at the regional level, including $25 million for a Regional Innovation Strategies Program to promote economic development projects that spur entrepreneurship and innovation in local communities.

Clearly, the $4 trillion budget proposal will be pared down by Congress. However, President Obama’s laudable call for significantly increased investments in the NNMI and funding for other innovative programs around technology transfer and commercialization are modest in cost and achieve tangible, non-partisan objectives while keeping the United States globally competitive in advanced industries. These proposals to improve technology transfer, create public/private partnerships, and speed commercialization are essential to America’s future economic success.

Stephen Ezell is a Senior Analyst with the Information Technology and Innovation Foundation (ITIF).

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