The pandemic and its shock to the global supply chain may be igniting a U.S. manufacturing revival...
The pandemic is lending greater urgency to efforts aimed at reviving the flagging U.S. industrial base in response to global supply chain disruptions.
Government initiatives aimed at reviving U.S. manufacturing were already underway when the coronavirus effectively knocked out distribution channels linking Chinese manufacturers and U.S. consumers. For example, the Defense Department’s Industrial Base Analysis and Sustainment Office has aggressively sought to secure the electronics supply chain for critical infrastructure.
Meanwhile, several industrial base proposals have been floated in the U.S. Senate.
The ball has since been picked up by technology lobbying groups in Washington. For example, the Information Technology and Innovation Foundation (ITIF) released a report on April 13 calling for a national industrial strategy aimed at key manufacturing sectors ranging from aerospace and computers to semiconductors and automation.
“Even before this pandemic, China posed an unprecedented competitiveness challenge in the advanced industries that are most critical to America’s economic wellbeing and national security,” said ITIF President Robert Atkinson. “We need to fortify the country’s most invaluable and irreplaceable industries.”
The renewed push for a national industrial strategy responds to vulnerabilities in global supply chains exposed by the pandemic originating in China’s manufacturing heartland. Experts note the current lack of financial incentives for risking new manufacturing initiatives. They also emphasize the decline in U.S. manufacturing skills and “human capital” in the form of production engineers needed to run fabs along with production and assembly lines.
“I would want to have a hedge” to shift production, “which we don’t have at the moment,” Dan Breznitz, a long-time observer of China’s technological transformation, told EE Timesin February as the coronavirus began its inexorable march across the globe.
Even before the pandemic began spreading like wildfire, industry sources said DoD officials have been ramping up efforts to shore up the U.S. electronics supply chain. Among the initiatives are expanded use of emerging digital twin capabilities that would be incorporated into DoD-trusted fabs built around secure manufacturing processes.
The ITIF’s call this week for a national industrial strategy includes expanded federal support for and commercialization of key technologies as a way to reduce dependence on Chinese suppliers. It also calls for market incentives such as tax breaks for investing in advanced technology production and the relaxation of regulations and antitrust rules. To the end, the report calls for a “competitiveness screen” to reduce regulatory burdens.
It further proposes to address the declining U.S. manufacturing base and the loss of production skills through an “industrial retention and recruitment fund.” While the report contains few details on how to fund this and other industrial base efforts, it advocates federal-state funding of manufacturing initiatives.
The pandemic has also generated legislative proposals to revive U.S. manufacturing. A bill reintroduced in March would establish an investment fund overseen by the U.S. Small Business Administration. The proposed Scale-Up Manufacturing Investment Company Actwould offer federal loan guarantees to investors who back advanced manufacturing startups in the U.S.
A group of U.S. senators also has proposed a national advanced industry strategy that includes establishing a national industrial intelligence unit within the U.S. National Intelligence Council.
Others have advocated a reconfiguration of supply networks around regional manufacturing hubs. The ITIF report calls for establishing a joint U.S.-European Union-Japan technology alliance.
Domestically, it advocates expansion of the current Manufacturing USA network and increased funding for the Semiconductor Technology Advanced Research Network. The DARPA effort funds university research on chip design technology.