• April 16, 2014

Obama Calls on University Research to Help Create Manufacturing Jobs

Obama Calls On University Research to Help Create Manufacturing Jobs 1

Mandel Ngan, Agence France-Presse, Getty Images

President Obama will announce a $500-million endeavor to develop manufacturing innovations in an appearance today at Carnegie Mellon U., one of six universities to join the initial effort.

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close Obama Calls On University Research to Help Create Manufacturing Jobs 1

Mandel Ngan, Agence France-Presse, Getty Images

President Obama will announce a $500-million endeavor to develop manufacturing innovations in an appearance today at Carnegie Mellon U., one of six universities to join the initial effort.

[Updated (3:45 p.m.) with coverage of the president's speech and comment from Eric E. Schmidt of Google.]

With the nation's economic concerns mounting, President Obama is again turning to its research universities for help.

In a speech Friday morning at Carnegie Mellon University, in Pittsburgh, the president announced a $500-million endeavor through which universities and companies will be asked to develop innovations in manufacturing with the goal of expanding domestic employment.

"American innovation has always been sparked by individual scientists and entrepreneurs, often at universities like Carnegie Mellon or Georgia Tech or Berkeley or Stanford," Mr. Obama said. "But a lot of companies don't invest in early ideas because it won't pay off right away. And that's where government can step in."

The idea is based on recommendations from the President's Council of Advisors on Science and Technology, an advisory group of scientists and engineers.

"Investing in manufacturing based on new technologies can provide high-quality, good-paying jobs for American workers," Eric S. Lander, a co-chairman of the advisory panel, said on Thursday in a briefing with reporters. Mr. Lander is director of the Broad Institute of Harvard and MIT, a biomedical research center in Cambridge, Mass., that is jointly run by Harvard University, the Massachusetts Institute of Technology, and the Whitehead Institute for Biomedical Research.

Basic or Applied Research

The White House hasn't worked out all details of the effort, including the degree to which it will involve actual research versus commercialization of discoveries. Organizers have, however, identified some initial projects, including allocations of $100-million to develop new materials used in manufacturing and $70-million for robotics development.

Such work is similar to federally financed research already taking place on university campuses that is coordinated by the National Science Foundation, said Ron A. Bloom, assistant to the president for manufacturing policy. The new effort, however, is expected "to provide more focus and direction to this spending."

The total amount of money isn't guaranteed, with the $500-million coming both from money already included in the NSF budget and from future increases requested by the president, Mr. Bloom said.

The administration has invited six universities to join the effort, with more expected to participate later, he said. The initial six are Carnegie Mellon, the Georgia Institute of Technology, MIT, Stanford University, the University of California at Berkeley, and the University of Michigan at Ann Arbor.

From Discovery to Commercialization

The University of Michigan's president, Mary Sue Coleman, said that while those six were probably chosen because of their expertise in manufacturing engineering, the project is especially important to her state, given the decline of its signature automotive industry.

Ms. Coleman, who joined President Obama for the announcement at Carnegie Mellon's National Robotics Engineering Center, said she hoped to emphasize to the president the importance of filling the financial gap between discovery and commercialization.

Ms. Coleman said that she planned to join President Obama for the announcement at Carnegie Mellon's National Robotics Engineering Center, and that she hoped to emphasize to the president the importance of filling the financial gap between discovery and commercialization.

In Michigan, she said, university researchers and companies already can get federal money to invent better ways of making products. The problem, she said, is in the development phase. For example, many small automotive-parts manufacturers don't have the $500,000 to $700,000 they typically need to apply an innovation on a commercial scale.

"I have talked to a number of our scientists, and they say this is a real hang-up," Ms. Coleman said.

And some economists point out the general difficulty of ensuring that greater spending on improving industrial technology will really create more jobs. Labor history in many fields, especially agriculture, has shown that innovation can often lead to machinery's replacing human workers, rather than creating new jobs, said James L. Butkiewicz, a professor of economics at the University of Delaware.

In that regard, universities could be especially important, Mr. Butkiewicz said. That's because manufacturing innovations discovered at universities often center on improving products, which can increase sales and thereby boost employment, he said. Companies, by contrast, might be more focused on improving the efficiency of their manufacturing methods. It will be difficult to judge how well President Obama's new effort will succeed in that regard until more specifics are known, he said.

Creating Jobs

Mr. Obama has repeatedly emphasized the importance he places on universities in preparing American workers for a more-competitive future, in which job success is increasingly tied to educational achievement. At separate events earlier this month, he touted business partnerships with community colleges as a means of helping American workers find new manufacturing jobs, and outlined plans to help train 10,000 new engineers a year.

The president planned the trip to Pittsburgh among growing signs—including stagnant hiring rates, high gas prices, and financial troubles in Europe—that the economic worries of the past five years will continue.

University and company officials leading the president's advisory committee said they were confident the $500-million effort would lead to substantial domestic job production, though they said they could not offer any estimates of how much.

One member of the presidential advisory panel, Eric E. Schmidt, executive chairman of the technology company Google, said some technological improvements could cost American jobs. But over all, Mr. Schmidt said, university-driven improvements in manufacturing technology would undoubtedly help employment.

"Given that the world is moving to more sophisticated and more complex products, wages and growth go to the people who master that," Mr. Schmidt said after the president's announcement. "And ultimately you have two choices: You can basically decide that you're going to invest in the way that we're describing, and build these industries in America, or you can permanently give them up to somebody else. And it's pretty obvious I think to all of us that strategically these are the jobs that America wants and here is a mechanism to get them."

The White House, as part of its announcement, said Mr. Obama would be asking his National Economic Council and his Office of Science and Technology Policy to help develop specific strategies for the endeavor.

The recommendations from the advisory panel led by Mr. Lander included an expansion of federal investment in shared facilities, such as federal and university laboratories, that small and medium-size companies could use to develop new products.

The panel's recommendations also included encouraging a new level of partnerships between industry and academe to identify emerging technologies—such as small-scale flexible electronics and advanced materials—that could be especially valuable in helping the American manufacturing sector to grow.

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