The federal government should continue to make "significant investments" in research, education and infrastructure to re-establish the United States as a global economic leader, the U.S. Commerce Department reports.

The Commerce Department report was mandated last year by President Obama as part of the America Competes Act. The report, delivered to Congress Jan. 6,concludes the government can revitalize U.S. manufacturing by supporting research and development through tax credits and helping to create new product design methodologies.

The Commerce Department notes that past federal R&D initiatives have led to significant medical advancements and helped develop the computer industry with the funding of the first fully electronic U.S. digital computer.

The department encourages more collaboration between universities and the federal government to foster research environments.

"The government could directly fund basic research through support of government labs or grants to universities or private research laboratories. Additionally, government policy could increase the returns earned by the private sector on basic research-through policies such as tax credits and a well-functioning patent system-and encourage the private sector to do more basic research," the report says.

The report also cited the need for more government initiatives that encourage students to pursue science, technology, engineering and mathematics, or STEM, fields.

Support for infrastructure improvements, including utility grid, highway and broadband Internet upgrades, are also necessary for future competitiveness, the report says.