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Obama Team Pins Manufacturing ‘Renaissance’ on Technology

The U.S. should spend $1 billion on promoting advanced technologies over the next four years as part of an effort to boost domestic manufacturing, according to recommendations from a panel advising the Obama administration.

The government needs to partner with the private sector to support development in fields including information technology, biotechnology and nanotechnology, the President’s Council of Advisors on Science and Technology said in a report released today. Doing so may help slow the decline in the U.S. share of high-technology exports, which fell to 11 percent of the global market in 2008 from 20 percent in the late 1990s.

Federal funding of basic research and the “promotion of early commercialization through procurement” has spawned the creation of “entire industries, hundreds of U.S. companies and millions of high-quality jobs for Americans for decades,”, according to the 56-page report.

“It’s easy to understand that there’s really a fundamental problem in all of these western economies around the production of manufacturing jobs,” said Google Inc. (GOOG) chairman Eric Schmidt, a member of the panel. “The study shows that there is a solution, that it’s not hopeless. It involves focusing on the advanced manufacturing jobs.”

The panel cited the Internet as an example of the results of government investment and said its recommendations, if followed, would help the U.S. compete with Japan and Germany in the race for high-skilled manufacturing business.

‘American Breakthroughs’

President Barack Obama kicked off his manufacturing initiative by announcing plans to designate $500 million toward technology development by companies and universities.

“If we want a robust growing economy, we need a robust, growing manufacturing sector,” Obama said in a speech at Carnegie Mellon University in Pittsburgh. “This new partnership that we’ve created will make sure tomorrow’s breakthroughs are American breakthroughs.”

The initial funding announced by the president is being drawn from existing programs and proposals, said Ron Bloom, Obama’s manufacturing adviser. The panel called for funding its recommendations in part from existing programs, with money going to the Commerce, Defense and Energy Departments, according to the report.

The panel also supported Obama’s previously announced policies to reform corporate income taxes to match other countries, extend the R&D tax credit permanently and increase the rate to 17 percent, and promote research, education and workforce training in high-skill sectors.

“Industry is ready to do this,” Schmidt said, and the president’s initiatives may help spark “a renaissance in American manufacturing using new technologies,” and give the U.S. a “pretty good chance of bringing back a reasonable number of high-paid, highly skilled manufacturing jobs.”

To contact the reporter on this story: Juliann Neher in Washington at jfrancis31@bloomberg.net

To contact the editor responsible for this story: Allan Holmes at aholmes25@bloomberg.net

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