[House Hearing, 113 Congress]
[From the U.S. Government Publishing Office]



 
                       EXAMINING FEDERAL ADVANCED
                         MANUFACTURING PROGRAMS
=======================================================================


                                HEARING

                               BEFORE THE

                SUBCOMMITTEE ON RESEARCH AND TECHNOLOGY

              COMMITTEE ON SCIENCE, SPACE, AND TECHNOLOGY

                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED THIRTEENTH CONGRESS

                             FIRST SESSION

                               __________

                           SEPTEMBER 10, 2013

                               __________

                           Serial No. 113-47

                               __________

 Printed for the use of the Committee on Science, Space, and Technology


       Available via the World Wide Web: http://science.house.gov




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              COMMITTEE ON SCIENCE, SPACE, AND TECHNOLOGY

                   HON. LAMAR S. SMITH, Texas, Chair
DANA ROHRABACHER, California         EDDIE BERNICE JOHNSON, Texas
RALPH M. HALL, Texas                 ZOE LOFGREN, California
F. JAMES SENSENBRENNER, JR.,         DANIEL LIPINSKI, Illinois
    Wisconsin                        DONNA F. EDWARDS, Maryland
FRANK D. LUCAS, Oklahoma             FREDERICA S. WILSON, Florida
RANDY NEUGEBAUER, Texas              SUZANNE BONAMICI, Oregon
MICHAEL T. McCAUL, Texas             ERIC SWALWELL, California
PAUL C. BROUN, Georgia               DAN MAFFEI, New York
STEVEN M. PALAZZO, Mississippi       ALAN GRAYSON, Florida
MO BROOKS, Alabama                   JOSEPH KENNEDY III, Massachusetts
RANDY HULTGREN, Illinois             SCOTT PETERS, California
LARRY BUCSHON, Indiana               DEREK KILMER, Washington
STEVE STOCKMAN, Texas                AMI BERA, California
BILL POSEY, Florida                  ELIZABETH ESTY, Connecticut
CYNTHIA LUMMIS, Wyoming              MARC VEASEY, Texas
DAVID SCHWEIKERT, Arizona            JULIA BROWNLEY, California
THOMAS MASSIE, Kentucky              MARK TAKANO, California
KEVIN CRAMER, North Dakota           ROBIN KELLY, Illinois
JIM BRIDENSTINE, Oklahoma
RANDY WEBER, Texas
CHRIS STEWART, Utah
VACANCY
                                 ------                                

                Subcommittee on Research and Technology

                   HON. LARRY BUCSHON, Indiana, Chair
STEVEN M. PALAZZO, Mississippi       DANIEL LIPINSKI, Illinois
MO BROOKS, Alabama                   FEDERICA WILSON, Florida
RANDY HULTGREN, Illinois             ZOE LOFGREN, California
STEVE STOCKMAN, Texas                SCOTT PETERS, California
CYNTHIA LUMMIS, Wyoming              AMI BERA, California
DAVID SCHWEIKERT, Arizona            DEREK KILMER, Washington
THOMAS MASSIE, Kentucky              ELIZABETH ESTY, Connecticut
JIM BRIDENSTINE, Oklahoma            ROBIN KELLY, Illinois
LAMAR S. SMITH, Texas                EDDIE BERNICE JOHNSON, Texas


                            C O N T E N T S

                      Tuesday, September 10, 2013

                                                                   Page
Witness List.....................................................     2

Hearing Charter..................................................     3

                           Opening Statements

Statement by Representative Larry Bucshon, Chairman, Subcommittee 
  on Research and Technology, Committee on Science, Space, and 
  Technology, U.S. House of Representatives......................     8
    Written Statement............................................     9

Statement by Representative Daniel Lipinski, Ranking Minority 
  Member, Subcommittee on Research and Technology, Committee on 
  Science, Space, and Technology, U.S. House of Representatives..    10
    Written Statement............................................    11

Statement by Representative Eddie Bernice Johnson, Ranking 
  Member, Committee on Science, Space, and Technology, U.S. House 
  of Representatives.............................................    12
    Written Statement............................................    13

                               Witnesses:

Dr. Alan Taub, Professor, Material Science & Engineering, 
  University of Michigan
    Oral Statement...............................................    15
    Written Statement............................................    17

Dr. Thomas M. Baer, Stanford Photonics Research Center, Stanford 
  University
    Oral Statement...............................................    25
    Written Statement............................................    27

Mr. Mark Muro, Senior Fellow and Policy Director, Metropolitan 
  Policy Program, Brookings Institution
    Oral Statement...............................................    39
    Written Statement............................................    41

Discussion.......................................................    52

             Appendix I: Additional Material for the Record

Submitted statement by Representative Lamar Smith, Chairman, 
  Committee on Science, Space, and Technology, U.S. House of 
  Representatives................................................    64

H.R. 1421, Advancing Innovative Manufacturing Act of 2013........    65


           EXAMINING FEDERAL ADVANCED MANUFACTURING PROGRAMS

                              ----------                              


                      TUESDAY, SEPTEMBER 10, 2013

                  House of Representatives,
                    Subcommittee on Research and Technology
               Committee on Science, Space, and Technology,
                                                   Washington, D.C.

    The Subcommittee met, pursuant to call, at 10:11 a.m., in 
Room 2318 of the Rayburn House Office Building, Hon. Larry 
Bucshon [Chairman of the Subcommittee] presiding.

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    Chairman Bucshon. Good morning. The Subcommittee on 
Research and Technology will come to order.
    Good morning again. Welcome to today's hearing titled 
``Examining Federal Advanced Manufacturing Programs.'' In front 
of you are packets containing the written testimony, 
biographies and Truth in Testimony disclosures for today's 
witnesses. I now recognize myself for an opening statement.
    Again, I would like to welcome everyone to today's hearing 
where we will examine federal advanced manufacturing programs, 
including research and development programs at the National 
Institute of Standards and Technology, and review H.R. 1421, 
the ``Advancing Innovative Manufacturing Act of 2013'' 
sponsored by the Ranking Member of the Full Committee, Ms. 
Eddie Bernice Johnson.
    Manufacturing plays a critical role in American economic 
competitiveness. Manufacturing represents approximately 11 
percent of the American economy, and manufacturing output has 
risen by 13 percent over the last several years. Manufacturing 
also has the greatest multiplier effect of any major sector of 
the American economy, and nearly 60 percent of all U.S. exports 
are in manufactured goods.
    While there are areas in decline in American manufacturing, 
such as labor-intensive, low-skilled manufacturing activities, 
there are also significant opportunities of growth in knowledge 
and technology-intensive advanced manufacturing. For example, 
the semiconductor industry boasts nearly 250,000 high-paying 
direct jobs in the United States alone, while supporting an 
additional 1 million jobs indirectly.
    The President's Council of Advisors on Science and 
Technology or PCAST, defines advanced manufacturing as ``a 
family of activities that, A, depend on the use and 
coordination of information, automation, computation, software, 
sensing, and networking, and/or B, make use of cutting-edge 
materials and emerging capabilities enabled by the physical and 
biological sciences.''
    With a technical knowledge base supported by our excellent 
universities and research institutes, and with innovation 
leadership supported by our private industries, both large and 
small, the United States has the opportunity to lead the world 
in advanced manufacturing competitiveness.
    However, it is incumbent upon us as policymakers to create 
an environment that will enable American advanced manufacturing 
to thrive. Unfortunately, I am concerned that we have not lived 
up to our end of the bargain.
    While all of our major global competitors have been 
lowering their corporate tax rates, ours is essentially 
unchanged for the past 20 years. Rising costs in health care, 
regulatory compliance and energy all discourage manufacturing 
from thriving domestically, and uncertainty about our future 
debt inhibits private-sector investment in future growth.
    It is critical that we focus on the policies that will make 
America the most competitive country in the world to start or 
grow a business. Given our current budget crisis, it is crucial 
that we maximize our investments to ensure the greatest return 
for our hardworking taxpayers' dollars. We cannot continue to 
spend endless amounts of borrowed money to create programs or 
sustain programs without making cuts elsewhere. Prioritization 
is crucial.
    I look forward to hearing our witnesses' thoughts on 
measurement science conducted at the NIST laboratories, the 
Hollings Manufacturing Extension Partnership, the Advanced 
Manufacturing Technology Consortium program, and the 
Administration's proposal for the National Network of 
Manufacturing Innovation. We also look forward to hearing our 
witnesses' thoughts on the Ranking Member's bill and about 
improvements and prioritization that can be made to our federal 
advanced manufacturing R&D programs.
    I would like to thank our witnesses for being here today, 
and we look forward to your testimony.
    [The prepared statement of Mr. Bucshon follows:]

Prepared Statement of Subcommittee on Research and Technology Chairman 
                             Larry Bucshon

    I would like to welcome everyone to today's Research and Technology 
Subcommittee hearing entitled ``Methamphetamine Addiction: Using 
Science to Explore Solutions.''
    The problem of methamphetamine, or meth, abuse is a serious problem 
facing our country today. The main compound from which meth derives is 
pseudoephedrine, known as PSE, which is also a common drug used to 
treat nasal and sinus congestion. Unfortunately, criminal dealers have 
discovered new, easier ways to make more potent forms of meth that 
require the use of chemicals such as PSE. As our witnesses will testify 
today, meth poses significant public safety and health risks, in 
addition to financial burdens to local communities where these toxic 
and dangerous labs are found.
    According to a 2013 Government Accountability Office report titled 
``State Approaches Taken to Control Access to Key Methamphetamine 
Ingredient Show Varied Impact on Domestic Drug Labs,'' the number of 
meth lab incidents declined significantly after 2004 when state and 
federal regulations on PSE product sales were implemented. Since 2007, 
however, these numbers have significantly increased, reflecting the 
emergence of smaller-scale production facilitated by a new method 
called smurfing, where individuals purchase the legal limits of PSE at 
multiple stores that are then combined for meth drug production.
    But more than figures and statistics, meth addiction is a problem 
that personally hits home for many Americans. As a medical doctor and 
physician, I personally know the devastation that addiction can cause 
and even after meth addicts kick their habit, research shows these 
addicts experience permanent damage. From January to July of this year, 
over 65 meth labs have been dismantled in the biggest county in my 
district, Vanderburgh County, making it the number one county for meth 
labs in the state. This is extremely close to my home next door in 
Warrick County and where we have had TWO meth lab explosions within a 
two mile radius of my house. In November of 2011, a meth lab exploded 
down the street from my house burning a house to the ground and causing 
over $25,000 in damage to houses around it.
    Despite the grim realities of meth addiction, science can provide 
valuable insights to this problem. Basic science agencies like the 
National Institutes of Health have spent over $68 million in FY 2013 to 
understand the neurological basis of meth addiction. NSF also supports 
fundamental non-medical basic science research, in particular 
behavioral research behind the psychology of addiction.
    Our witnesses today reflect the wide spectrum of work and research 
regarding the various facets of the meth problem. Witnesses will 
introduce the extent of the meth problem, and will discuss a wide range 
of topics on how science can help us understand the prevention and 
treatment of meth as well as how technology can be used to stop 
unauthorized purchases of PSE.
    I would like to thank the witnesses for being here today and taking 
time to offer their perspectives on this critical topic for our 
communities. I'd also like to thank Ranking Member Lipinski and 
everyone else participating in today's hearing.

    Chairman Bucshon. At this point I now recognize the Ranking 
Member, the gentleman from Illinois, for an opening statement.
    Mr. Lipinski. Mr. Chairman, thank you for calling this 
hearing to examine federal advanced manufacturing programs and 
legislation introduced by the Ranking Member of the Full 
Committee, Ms. Johnson. I can't think of a better way to start 
out our post-break session here.
    I would also like to thank the witnesses for being here 
today and I look forward to your testimony.
    Today's hearing is an important follow-up to the hearing we 
held in July on my bipartisan American Manufacturing 
Competitiveness Act. I am glad that we are taking an in-depth 
look at these issues as we seek to identify the best federal 
policies that will facilitate the growth of manufacturing and 
job creation. Despite all the attention being focused on other 
important issues right now, the American people are still 
focused on the fact that more must be done to encourage the 
creation of good-paying jobs in our country.
    A vibrant manufacturing sector is critical for America's 
economic growth and the success of the middle class. 
Unfortunately, since the 1970s we have seen a less vibrant 
manufacturing sector with the number of manufacturing jobs 
shrinking, from 20 million in 1979 to fewer than 12 million 
today. The recent recession hit workers in the manufacturing 
sector especially hard and contributed to the stagnation of 
middle-class wages. In addition, our trade deficit in advanced 
technology products is growing, and China is now the world's 
biggest exporter of high-tech goods.
    But there has been some good news recently, with American 
manufacturing showing signs of a comeback. In fact, a report 
last week by the Institute for Supply Management found that 
economic activity in the manufacturing sector expanded for the 
third consecutive month. Despite these positive signs, 
significant challenges do remain.
    Our position as the global leader in technology is being 
threatened as developing countries build up their capabilities 
to become not only the world's assembly line, but also the 
creator of new and innovative technologies. They are investing 
heavily in manufacturing and innovation and they are doing so 
in a much more comprehensive way than the United States.
    Right now, the Federal Government has countless 
departments, agencies, programs and policies that affect 
manufacturing, from our tax code and energy policies to 
programs related to research and development and education and 
workforce, but these efforts are not well coordinated, to say 
the least.
    Through legislation I introduced earlier this year, an 
interagency committee would conduct a comprehensive analysis of 
the U.S. manufacturing sector, examining the impact that 
government policies are having on manufacturing and how we can 
be more efficient and effective. By improving the coordination 
of various government agencies, and more importantly, 
coordination with the private sector, we can develop concrete 
goals and objectives and implement policies that create the 
best condition for American manufacturers to thrive.
    Today, we are going to focus largely on the advanced 
manufacturing activities of NIST and the programs and 
activities proposed in H.R. 1421.
    Although NIST is a relatively small agency, it is an 
extremely important player in federal efforts to spur 
manufacturing, innovation and economic prosperity. For more 
than a 100 years, NIST has supported the competitiveness of 
U.S. industry by advancing measurement science, standards and 
technology. Their work in biomanufacturing, nanomanufacturing 
and smart manufacturing will provide the foundation for future 
U.S. market growth, competitiveness, and the creation and 
retention of high-skilled, well-paying jobs.
    Furthermore, NIST's broad and deep technical expertise as 
well as the ability to serve as a bridge to U.S. businesses is 
unparalleled. This connection to industry is essential. I 
strongly believe we cannot move American manufacturing forward 
without building more bridges between the public and private 
sectors.
    H.R. 1421 encourages the formation of public-private 
partnerships and the development of technology roadmaps to 
address the research needs of industry.
    I look forward to hearing from our witnesses about how the 
Federal Government can help promote deep and long-lasting 
public-private sector collaboration in manufacturing. I am also 
interested in learning more about how the Federal Government 
can help our small- and medium-sized manufacturers become more 
competitive in the global marketplace.
    Mr. Chairman, we must adopt smart policies that encourage 
innovation, entrepreneurship, efficiency and investment in 
American manufacturing. American manufacturing equals American 
jobs and a strong economy. We simply can't afford to lose our 
capacity to manufacture the breakthrough technologies and 
products of tomorrow. I look forward to working with you to 
advance legislation on this important topic.
    Thank you again for holding this hearing, and I yield back 
the balance of my time.
    [The prepared statement of Mr. Lipinski follows:]

     Prepared Statement of Subcommittee on Research and Technology
                Ranking Minority Member Daniel Lipinski

    Mr. Chairman, thank you for calling this hearing to examine federal 
advanced manufacturing programs and legislation introduced by the 
Ranking Member of the full Committee. I'd also like to thank the 
witnesses for being here this morning. Today's hearing is an important 
follow-up to the hearing we held in July on my bipartisan American 
Manufacturing Competitiveness Act. I'm glad that we are taking an in-
depth look at these issues as we seek to identify the best federal 
policies for promoting manufacturing and job creation. Despite all the 
attention being focused on other important issues right now, the 
American people are still focused on the fact that more must be done to 
encourage the creation of good-paying jobs in our country.
    A vibrant manufacturing sector is critical for America's economic 
growth and the success of the middle class. Unfortunately, since the 
1970s we have seen a less vibrant manufacturing sector with the number 
of manufacturing jobs shrinking, from 20 million in 1979 to fewer than 
12 million today. The recent recession hit workers in the manufacturing 
sector especially hard and contributed to the stagnation of middle-
class wages. In addition, our trade deficit in advanced technology 
products is growing & China is now the world's biggest exporter of 
high-tech goods.
    But, there has been some good news recently, with American 
manufacturing showing signs of a comeback. In fact, a report last week 
by the Institute for Supply Management found that economic activity in 
the manufacturing sector expanded for the third consecutive month. 
Despite these positive signs challenges remain.Our position as the 
global leader in technology is being threatened as developing countries 
build up their capabilities to become not only the world's assembly 
line, but also the creator of new and innovative technologies. They are 
investing heavily in manufacturing and innovation and they are doing so 
in a much more comprehensive way than the U.S.
    Right now, the Federal Government has countless departments, 
agencies, programs, and policies that affect manufacturing, from our 
tax code and energy policies to programs related to research and 
development and education and workforce, but these efforts are not well 
coordinated.
    Through the legislation I introduced earlier this year, an 
interagency committee would conduct a comprehensive analysis of the 
U.S. manufacturing sector, examining the impact that government 
policies are having on manufacturing and how we can be more efficient 
and effective. By improving the coordination of various government 
agencies and most importantly, coordination with the private sector, we 
can develop concrete goals and objectives, and implement policies that 
create the best condition for American manufacturers to thrive.
    Today we are going to focus largely on the advanced manufacturing 
activities of NIST and the programs and activities proposed in H.R. 
1421. Although NIST is a relatively small agency, it is an extremely 
important player in federal efforts to spur manufacturing, innovation, 
and economic prosperity. For more than 100 years, NIST has supported 
the competitiveness of U.S. industry by advancing measurement science, 
standards, and technology. Their work in biomanufacturing, 
nanomanufacturing, and smart manufacturing will provide the foundation 
for future U.S. market growth, competitiveness, and the creation and 
retention of high skill, well-paying jobs.
    Furthermore, NIST's broad and deep technical expertise, as well as 
its ability to serve as a bridge to U.S. businesses, is unparalleled.
    This connection to industry is essential and I strongly believe we 
cannot move American manufacturing forward without building bridges 
between the public and private sectors. H.R. 1421 encourages the 
formation of public-private partnerships and the development of 
technology roadmaps to address to the research needs of industry. I 
look forward to hearing from our witnesses about how the Federal 
Government can help promote deep and long-lasting public-private sector 
collaboration in manufacturing. I am also interested in learning more 
about how the Federal Government can help our small and medium-sized 
manufacturers become more competitive in the global marketplace.
    Mr. Chairman, we must adopt smart policies that encourage 
innovation, entrepreneurship, efficiency, and investment in American 
manufacturing. American manufacturing equals American jobs and a strong 
economy and we simply can't afford to lose our capacity to manufacture 
the breakthrough technologies and products of tomorrow. I look forward 
to working with you to advance legislation on this important topic.

    Chairman Bucshon. Thank you, Mr. Lipinski.
    I now recognize the Ranking Member of the Full Committee, 
Ms. Johnson, for her opening statement.
    Ms. Johnson. Thank you very much, Mr. Chairman, and thank 
you for holding this hearing today, and I want to thank our 
witnesses for being here to review the current federal efforts 
in advanced manufacturing as well as to examine legislation 
that I have introduced to help ensure our manufacturing sector 
remains competitive and continues to create jobs over the long 
term.
    Some of you may not know, but my hometown, Dallas, Texas is 
the sixth largest metropolitan economy in the United States, 
and according to the Brookings Institution, the 12th largest in 
the world. I mention this only because one of Dallas's 
strengths is in its manufacturing sector. About 250,000 people 
were employed in a manufacturing job in 2010, and one-third of 
these jobs were in a high technology area. These figures show 
that the Dallas region has the potential to because the hub for 
advanced manufacturing for years to come, but it is by no means 
guaranteed.
    While the United States is struggling to sustain its 
leadership, other countries are focusing their full attention 
on promoting manufacturing and innovation. They are 
aggressively investing in research and development and shaping 
their policies and programs to change the competitive landscape 
in their favor. We simply cannot afford to stand by idly and 
watch our competitors position themselves to move ahead of us. 
We need our manufacturing sector to be the most sophisticated 
in the world, using the largest technologies and the newest, 
and the most efficient methods and processes.
    That is why I introduced the Advancing Innovative 
Manufacturing--or the AIM Act--which can help ensure the 
survival of our manufacturing sector and our global leadership 
by making strategic investments in manufacturing research, 
development and education. First, the AIM Act brings the public 
and private sectors together to develop research roadmaps and 
share the costs of conducting the research contained in these 
roadmaps. It does this by formally authorizing NIST's Advanced 
Manufacturing Technology Consortium program at a level that 
will allow the program to fully accomplish its mission of 
addressing the pre-competitive challenges that American 
industry faces today.
    Next, the AIM Act focuses on a key segment of our society, 
the small and medium-sized manufacturer. These small businesses 
drive job growth, but they often lack the technical expertise 
and capacity needed to transform an innovative idea into a new 
product or service. My bill creates a pilot program that will 
provide small and medium-sized manufacturers with vouchers that 
will allow them to buy R&D or innovation expertise as needed. 
Innovation vouchers programs have been deployed in more than a 
dozen countries with encouraging results. For example, a study 
found that eight out of ten vouchers issued by the Holland 
government resulted in an innovative product that would not 
have otherwise been realized.
    Finally and maybe most importantly, the AIM Act addresses 
our workforce needs by providing community colleges with grants 
that will allow them to prepare our students for the 
manufacturing jobs of the future.
    Mr. Chairman, I would like to end by quoting from a 
comprehensive National Academies report from last year that I 
think clearly summarizes where we stand. ``The United States, 
while retaining the vestiges of its leadership position, should 
recognize that merely maintaining the current policies and 
programs will lead to continued erosion of our economic 
capabilities, especially in the high-technology industries that 
are the basis of future prosperity.''
    Mr. Chairman, we need to be bold and invest in our future. 
I look forward to hearing from our witnesses on ways to improve 
the AIM Act and on what policies and programs should be 
implemented now to build a productive and job-creating 21st 
century economy.
    Thank you, and I yield back.
    [The prepared statement of Ms. Johnson follows:]

          Prepared Statement of Full Committee Ranking Member
                         Eddie Bernice Johnson

    Thank you, Mr. Chairman for holding today's hearing to review 
current federal efforts in advanced manufacturing as well as to examine 
legislation I've introduced to help ensure our manufacturing sector 
remains competitive and continues to create jobs over the long-term.
    Some of you may not know this, but my home of Dallas, Texas is the 
sixth largest metropolitan economy in the United States and according 
to the Brookings Institution, the 12th largest in the world. I mention 
this because one of Dallas's strengths is its manufacturing sector. 
About 250,000 people were employed in a manufacturing job in 2010 and 
one-third of those jobs were in a high technology area.
    These figures show that the Dallas region has the potential to be a 
hub for advanced manufacturing for years to come, but this is by no 
means guaranteed.
    While the United States is struggling to sustain its leadership, 
other countries are focusing their full attention on promoting 
manufacturing and innovation. They are aggressively investing in 
research and development and shaping their policies and programs to 
change the competitive landscape in their favor.
    We simply cannot afford to stand idly by and watch our competitors 
position themselves to move ahead of us. We need our manufacturing 
sector to be the most sophisticated in the world, using the newest 
technologies and the most efficient methods and processes.
    That is why I introduced the Advancing Innovative Manufacturing--or 
AIM Act--which can help ensure the survival of our manufacturing sector 
and our global leadership by making strategic investments in 
manufacturing research, development, and education.
    First, the AIM Act brings the public and private sectors together 
to develop research roadmaps and share the cost of conducting the 
research contained in those roadmaps. It does this by formally 
authorizing NIST's Advanced Manufacturing Technology Consortia program 
at a level that will allow the program to fully accomplish its mission 
of addressing the precompetitive challenges American industry faces 
today.
    Next, the AIM Act focuses on a key segment of our economy, the 
small and medium-sized manufacturer. These small businesses drive job 
growth, but they often lack the technical expertise and capacity needed 
to transform an innovative idea into a new product or service. My bill 
creates a pilot program that will provide small and medium-sized 
manufacturers with vouchers that will allow them to ``buy'' R&D or 
innovation expertise as needed.
    Innovation vouchers programs have been deployed in more than a 
dozen countries with encouraging results. For example, a study found 
that eight out of ten vouchers issued by the Holland government 
resulted in an innovative product that would not have otherwise been 
realized.
    Finally and maybe most importantly, the AIM Act addresses our 
workforce needs by providing community colleges with grants that will 
allow them to prepare our students for the manufacturing jobs of the 
future.
    Mr. Chairman, I'd like to end by quoting from a comprehensive 
National Academies report from last year that I think clearly 
summarizes where we stand. ``The U.S., while retaining the vestiges of 
its leadership position, should recognize that merely maintaining the 
current policies and programs will lead to continued erosion of our 
economic capabilities, especially in the high technology industries 
that are the basis for future prosperity.''
    Mr. Chairman, we need to be bold and invest in our future. I look 
forward to hearing from our witnesses on ways to improve the AIM Act 
and on what policies and programs should be implemented now to build a 
productive and job creating 21st century economy.

    Chairman Bucshon. Thank you, Ms. Johnson.
    At this time I would like to submit the statement of 
Chairman Smith into the record.
    [The prepared statement of Mr. Smith appears in Appendix I]
    Chairman Bucshon. If there are other Members who wish to 
submit additional opening statements--if there are additional 
Members, your statements will be added to the record at this 
point.
    At this time I would like to introduce our witnesses. Our 
first witness is Dr. Alan Taub, Professor of Material Science 
and Engineering at the University of Michigan. Dr. Taub 
previously served as Vice President of Global Research and 
Development at General Motors Corporation and currently chairs 
the NIST Visiting Committee on Advanced Technology. Dr. Taub 
received his bachelor's degree in materials engineering from 
Brown University and his master's and Ph.D. degrees in applied 
physics from Harvard.
    Our second witness is Dr. Thomas Baer, Executive Director 
of the Stanford Photonics Research Center, and a Consulting 
Professor at the Applied Physics Department at Stanford 
University. Dr. Baer has been extensively involved in startup 
companies in Silicon Valley, and was formally a member of the 
NIST Visiting Committee on Advanced Technology. Dr. Baer 
received a bachelor of arts degree in physics from Lawrence 
University and a Ph.D. in atomic physics from the University of 
Chicago.
    Our third witness is Mr. Mark Muro, Senior Fellow and the 
Director of Policy at the Metropolitan Policy Program at the 
Brookings Institution. He previously led the development of a 
state advanced industries strategy for Colorado and is 
currently leading the development of a strategy for Tennessee's 
advanced auto industry. Mr. Muro received a bachelor of arts 
from Harvard University and a master's of American Studies from 
the University of California Berkeley.
    Thanks again for our really very distinguished panel for 
being here. As our witnesses should know, spoken testimony is 
limited to five minutes, after which the Members of the 
Committee will each have five minutes to ask questions.
    I now recognize Dr. Taub for five minutes to present his 
testimony.

             TESTIMONY OF DR. ALAN TAUB, PROFESSOR,

                MATERIAL SCIENCE & ENGINEERING,

                     UNIVERSITY OF MICHIGAN

    Dr. Taub. Thank you. Good morning, Mr. Chairman, Ranking 
Members Lipinski and Johnson, and other Members of the 
Committee.
    As a newly minted academic in my class at the university, I 
teach two key rules of manufacturing. First, if you cannot 
measure it, you cannot manufacture it with quality and 
reliability; and second, if you don't have standards in place, 
you will be hindered in widespread commercialization.
    For over a century, the measurement services and standard 
programs of NIST have ensured the accuracy and reliability of 
nearly every measurement in this country. We tend to take for 
granted our ability to perform even the most basic measurements 
such as length and weight. The reality is, the NIST services 
provide the measurement standards that allow industry to use 
products efficiently throughout the entire supply chain with 
reliability.
    It is important to recognize that NIST's ability to 
successfully deliver high-quality measurement services to the 
Nation's industry is grounded in their world-class measurement 
science capability. What might appear to the non-expert as 
fundamental research without application is actually the 
foundational cure that allows NIST to deliver state-of-the-art 
tools to its industrial partners.
    NIST is also participating with other Federal agencies to 
launch the new advanced manufacturing initiative that will help 
bridge the gap from basic research to product implementation. 
These programs will enable the Federal Government to catalyze 
the integration of efforts across the national laboratories, 
universities and industry so that we will have access to 
advanced manufacturing technology. The AMTech consortia 
described in section 2 of H.R. 1421 together with the National 
Network of Manufacturing Innovation Institutes will create--and 
this is important--industry-driven roadmaps that will then 
target joint investment in pre-competitive advanced 
manufacturing research. It is important that these programs 
remain industry-driven and that they are fully integrated and 
coordinated. Equally important is that creating these 
institutes gets accelerated and we overcome the present funding 
constraints.
    H.R. 1421 also includes an innovation voucher pilot 
program. This program is a novel approach, and it will enable 
small and medium companies to access leading-edge technology at 
universities and national laboratories that today they have a 
barrier to access. However, given the size of each voucher, it 
is critical that the program be streamlined in its 
administration so that the overhead is minimized. I think what 
the Secretary should consider is incorporating the pilot within 
an existing outreach organization such as the MEPs, which have 
a long history of serving small and medium companies.
    As our manufacturing processes become ever more 
sophisticated, the reality is, companies are finding it 
increasingly difficult to access a workforce trained with 21st 
century manufacturing skills. As described in section 5 of H.R. 
1421, the efforts need to be inclusive of community colleges, 
advanced manufacturing certification programs, private-sector 
partnerships, and other activities. In those technology areas, 
which will be covered by the National Network of Manufacturing 
Innovation, the institutes can serve as the focal point for 
those programs.
    Given our present hard economic times, we clearly need to 
focus on making good investments that will have the greatest 
payoffs. It is in fact global competition that requires us to 
make these investments in measurement and standards, advanced 
manufacturing technology, small company outreach, and workforce 
development so that our domestic manufacturing enterprise will 
remain globally competitive. I suggest that upon study, a 
highly positive return on this investment in the key 
manufacturing pillars will be found as measured in 
manufacturing jobs and balance of trade. The support is needed 
in a number of parallel, complementary activities that taken 
together will maintain the world's most efficient and 
innovative manufacturing ecosystem. Thank you.
    [The prepared statement of Dr. Taub follows:]
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    Chairman Bucshon. Thank you very much.
    I now recognize Dr. Baer for his testimony.

                TESTIMONY OF DR. THOMAS M. BAER,

              STANFORD PHOTONICS RESEARCH CENTER,

                      STANFORD UNIVERSITY

    Dr. Baer. Good morning, Chairman Bucshon, Ranking Members 
Johnson and Lipinski, and Members of the Subcommittee on 
Science, Space, and Technology. Thank you very much for giving 
me the opportunity to speak to you about the importance of 
advanced manufacturing to the United States government and U.S. 
citizens.
    Although my early training in scientific research was in 
physics, I have spent most of my career working in the private 
sector in the field of biotechnology and biomedicine. I have 
been a founder and senior manager of several high-technology 
companies in Silicon Valley where advanced manufacturing was a 
critical corporate focus.
    In my opinion, it is not an exaggeration to state that 
manufacturing has been the foundation of the economy of the 
United States for the past 150 years. The technology behind the 
cotton gin, the steam locomotive, electric lighting, the 
airplane, the automobile, the transistor, the laser, 
television, liquid crystal displays and the Internet were 
primarily invented in the United States and first introduced 
commercially here by developing advanced manufacturing 
technologies domestically.
    Moreover, we have emerged victorious from several worldwide 
conflicts, in large part due to our manufacturing expertise. 
However, this is not a prowess that we should take for granted.
    The United States has the largest number of world-class 
research universities, the best government laboratories and the 
highest level of private-sector entrepreneurial activity and 
technological innovation in the world. However, other nations 
are doing more than the United States to encourage interaction 
between these three sectors, providing effective programs that 
directly incentivize collaboration focusing on developing 
advanced manufacturing technologies. I am very pleased to see 
that the U.S. government is taking action to develop comparable 
programs, and I encourage you to give these programs the 
highest priority possible.
    I recommend that special attention be paid to funding newer 
industries where high growth is expected. Often companies 
participating in these industries are in their initial growth 
phases and lack the financial resources to explore new 
manufacturing methods. Examples of such industries are 
renewable energy through solar power, solid-state lighting, 
efficient and lighter-weight batteries for electric vehicles, 
expanding our information technology bandwidth through silicon 
photonics. Internet bandwidth demands are increasing at 60 
percent per year. That means a factor of one hundred fold 
increase in demand over the next decade, and we presently do 
not have the technology to service that demand. It needs to be 
developed. Advanced manufacturing will play a key role in that 
area.
    Another area of growth is developing new transformative 
manufacturing methods in the fields of protein engineering and 
synthetic biology. Over the next decade, these nascent 
industries are expected to add hundreds of billions of dollars 
to our economy and thousands of new jobs. It is to industries 
such as these that government programs can provide great 
benefit and a large return on investment to U.S. citizens.
    These new programs in advanced manufacturing will also 
provide great opportunities for progress in basic science. 
Invention and innovation often precede and stimulate new 
science. The steam engine was invented and optimized prior to 
the development of the basic theory of thermodynamics that 
described its operation. The electric light bulb was 
demonstrated and developed prior to the theory of black-body 
radiation, and it was due to the inability of classical 
theories to describe radiation from a light bulb accurately 
which led to current day modern quantum theories and physics. 
High-temperature superconductors were discovered 30 years ago, 
and physicists are still debating different theories describing 
their operation. The laser, the transistor and satellite 
communications are all further examples of technologies that 
were incompletely understood when they were first demonstrated, 
and the ensuing exploration of their operation and the 
development of advanced manufacturing processes led to many 
scientific advances.
    The discovery research that will be a necessary component 
of programs in advanced manufacturing will be important, 
challenging and transformative. The National Institute for 
Standards and Technology has the appropriate historical 
mission, a very experienced and talented manufacturing staff, 
and superb facilities. It is the logical choice to lead the 
advanced manufacturing initiatives.
    Thank you again for this opportunity to discuss these 
initiatives with you today, and I would be glad to answer any 
questions. Thank you, Mr. Chairman.
    [The prepared statement of Dr. Baer follows:]
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    Chairman Bucshon. Thank you.
    I now recognize Mr. Muro for his testimony.

                  TESTIMONY OF MR. MARK MURO,

               SENIOR FELLOW AND POLICY DIRECTOR,

                  METROPOLITAN POLICY PROGRAM,

                     BROOKINGS INSTITUTION

    Mr. Muro. Good morning, Chairman, Ranking Members Lipinski 
and Johnson, and Members of the Subcommittee. I very much 
appreciate the opportunity to appear before you today.
    What I thought I would do since we have some very capable 
examinations of what NIST can do and the direction of its work, 
I want to close the testimonies by turning to some fundamental 
rationale so that we remember what we are doing here, so I 
first want to consider why manufacturing actually matters so 
much, why federal policy support is warranted, and then what 
that might look like, and I will touch at the very end on a few 
comments on H.R. 1421.
    Let us consider first, you know, why manufacturing matters. 
I am going to be very brief, but I am going to put it in a 
broader economic context, you know, and I think my group since 
about 2008 has been arguing very much against the view that 
there is nothing special about manufacturing, which only 4 or 
five years ago really was a frequent refrain, motivated by the 
view, though, that since the 2008 crash we needed to rebalance 
the American economy away from consumption and imports financed 
by foreign borrowing and back towards creating real value 
through innovation, export and outcompeting other nations. But 
we have argued that manufacturing certainly matters not just 
for the 11.5 million jobs left in the sector but equally 
important because it is a major source of technology innovation 
and because it can make a major contribution to reducing the 
Nation's trade deficit. You know, manufacturing is only about 
11 percent or so of GDP but it is responsible for the 
overwhelming majority, about 68 percent of it, of domestic R&D 
spending by companies. This is the main site of innovation, 
technology innovation, in the private sector.
    At the same time, we have noted that manufacturing exports 
are going to be essential if we are going to reduce the trade 
deficit. It is theoretically possible to eliminate the trade 
deficit by increasing exports and reducing the import of 
services, agricultural products, and natural resources but the 
task would be much easier if manufacturing were included. So if 
we want to reduce the deficit, the trade deficit, we need to 
bear down on manufacturing.
    Let us turn to whether or not manufacturing is an 
appropriate object of policy attention. I will just say there 
is sound economic reasons for engagement beyond the simple 
values of manufacturing that we have heard about from my co-
panelists. Many economists, perhaps many of you here today, 
there is the sense that any type of preferential treatment for 
a single type of investment is off base or distortionary. 
However, it is essential to remember that standard economic 
theory justifies government action where there are market 
failures, meaning situations where the societal benefits or 
positive spillovers of an activity exceed the private return. 
In those situations, it is unlikely that a private business 
will invest at the optimal level. Hence, my view: The U.S. 
manufacturing sector is plagued by a number of market failures 
that merit government attention.
    Here are a few of these that pertain to this morning's 
discussion of H.R. 1421. Manufacturers underinvest in 
collaborative public-private roadmapping exercises because the 
collaborations are hard to organize and because they can rarely 
reap the sole value of the association in their individual 
bottom lines. Manufacturers, even small ones, also underinvest 
in R&D because they can't reap the full value of technical 
advances in their profits. It is a classic example of positive 
spillovers. And then finally, mapping again into aspects of the 
bill, manufacturers, especially small ones, often lag in 
identifying or adopting or developing the latest training and 
education models. The inability to capture all the benefits 
again means they are producing value for the economy, value for 
the society but not always profits for themselves. So in each 
of these instances, the implication is clear: fundamental 
market values ensure the Nation will underinvest.
    So what kind of policy actions make sense? It is important 
to note that manufacturing policies should not pick winners and 
it should improve the overall macroenvironment but it also 
needs to attack these market failures. So some of the general 
aspects--and I think I am running over just a little bit--you 
know, increased public investment in R&D, improve the Nation's 
tax competitiveness, especially for R&D capital equipment, 
foster trade, invest in the Nation's STEM workforce, modernize 
infrastructure, you know, safeguard the Nation's energy 
windfall of unconventional natural gas, but then policies that 
attack these particular market problems can be very helpful, 
and I think that is what this bill does quite skillfully. We 
like the idea of challenge grants that catalyze both--that make 
available a grant but catalyze the partnerships between 
sectors--business, academia and national labs--and I think you 
have a number of those in this.
    I could talk some more about some of the other aspects of 
the bill but I think the fundamental use of competitive grants 
here is a very important model for engaging industry, getting 
that out front in determining and shaping the interventions. So 
I can go on later in questions, but that is the basic outline. 
Thank you.
    [The prepared statement of Mr. Muro follows:]
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    Chairman Bucshon. Thank you very much for your testimony 
and all of your testimony. This is a fascinating subject to me, 
and I think American competitiveness is really--needs to be on 
the forefront of everything we talk about in Washington, I 
think, driving the private-sector economy, especially at a time 
right now when many of our fellow citizens are unemployed or 
are not employable in the high-tech industry because of lack of 
skills training and other things that they need to improve on, 
and we can be helpful if we put the right policies in place.
    So thank you for your testimony. I will remind the Members 
that Committee rules limit questioning to five minutes. The 
chair at this point, I will recognize myself for five minutes 
to begin questioning.
    This will be a little off script here, but if there is one 
thing that--one or two things that we could do that would make 
us more competitive, short answer, what can we do in Washington 
to make us more competitive? Dr. Taub?
    Dr. Taub. Well, I will stick to the technology aspect of it 
rather than go into taxes and other incentives. I think in the 
area of manufacturing, the proposals on the table, whether it 
is fully funding the NNMI program or the AMTech parallel 
program, there have been a number of workshops that were done, 
and here is the key, with industry to help define how those 
programs could be done. The President's Executive Order has 
allowed the launch of three of those. But the target was to 
create 15, and I think the industries have defined what is 
needed, so I would suggest you fund the NNMI and AMTech work.
    Chairman Bucshon. Dr. Baer?
    Dr. Baer. Following along that line, I think establishing 
programs like the NNMI, like the bill 1421, to promote 
collaboration between the research universities and the private 
sector is excellent. It has the advantage of very cost-
effective way to supplement the R&D and advanced manufacturing 
but it also provides incentives for training our students and 
workforce to solve problems that are relevant to U.S. industry.
    Mr. Muro. I would agree with each of these, and I will 
provide a slightly different reason. The manufacturing 
institutes, the investing in manufacturing communities, 
legislation and H.R. 1421 all can help catalyze the kind of 
technological exchange, the multisectoral engagements of 
consortia at the regional level, and we think that that is 
extremely important. The economy is not everywhere; it is in 
particular places, these intense clusters of technological 
exchange. So I think we have many of the pieces of architecture 
on the table but the more it can be tuned to what is happening 
in Dallas, what is happening in Wichita, you know, and using 
that to get that bottom-up sense of innovation in the economy 
is important, and I think that is implied in a lot of the 
things that are on the table.
    Chairman Bucshon. Dr. Baer, I am going to ask, the 2012 
VCAT report recommends that NIST provide more clarity and depth 
in strategic planning. What recommendations would you have to 
establish this goal at NIST, and what would be an effective way 
to provide planning across both the laboratory and research 
programs and the extramural programs?
    Dr. Baer. I served on the VCAT and overlapped with Dr. 
Taub, and I think one of the most important roles of the VCAT 
was to provide an ongoing emphasis on strategic planning and to 
help to guide that process. I think the contributions from the 
VCAT committee members to provide strategies for putting in 
place a strategic plan, which were very honestly not part of 
the culture at NIST, were quite important. So I think one of 
the ways that NIST could do this effectively is to involve the 
VCAT members and provide input to the senior management there 
and the strategic planning process. Maybe Alan has some 
comments about that.
    Chairman Bucshon. Yes, Dr. Taub?
    Dr. Taub. Well, I served on the VCAT since 2008, and I now 
am the chair. I would say probably the best thing NIST did was 
appoint Pat Gallagher as the Under Secretary. He embraced 
strategic planning, which, as Dr. Baer points out, was really 
getting in the way of what was bottom-up work, and he was 
allowed to restructure the organization. He clearly delineated 
the extramural and the laboratory programs, and now at the 
beginning of every VCAT meeting, in fact, they review their 
updated strategic plans. I am pretty sure in the 2013 report, 
you won't see that comment after seven years of it showing up.
    Chairman Bucshon. Thank you. I will ask Mr. Muro this: 
given the broad range of policy proposals being considered, how 
can we determine what is giving us our best return on 
investment?
    Mr. Muro. I think any and all of these programs ought to 
be, you know, provided with standard and state-of-the-art 
performance management. Data collection is essential. It 
pervades the kind of advanced economies you are concerned with. 
So I think, you know, it is not a difficult matter to work out 
some basic performance management that actually should be taken 
seriously. I mean, I think we all agree that straight grants 
without a performance content and the ability to sunset some 
grants and scale up those that are high performers is critical, 
and that will require careful data collection and advanced, you 
know, set, standard frameworks.
    Chairman Bucshon. Thank you.
    I now recognize Mr. Lipinski.
    Mr. Lipinski. Thank you. I want to start with a question on 
international competitiveness. In his testimony, Dr. Baer 
mentions that other nations appear to be encouraging more 
interaction between their respective universities, industries, 
government laboratories in an effort to promote manufacturing. 
So I want to ask all of you about any insight you have in 
successful programs or models being pursued in other countries 
that we might want to consider implementing here in the United 
States. Let us start with Dr. Taub.
    Dr. Taub. Well, you know, a very good example has been the 
Fraunhofer Institutes that started in Germany and I think many 
of the principles of the Fraunhofers were built into the NNMI 
and AMTech constructs. It is also a question of, in my 
experience in other countries, there is a more sustained 
strategic objective for their government funding. They tend to 
go with a longer time frame horizon which allows the 
universities to really build the core competency, to build the 
relationship with their industrial partners so that you can go 
in and more effectively work over a longer time frame. You 
know, funding a strategic program in a deep technology for two 
years just doesn't cut it anymore. They tend to go with 5- and 
ten-year plans quite effectively.
    Mr. Lipinski. Thank you. Dr. Baer?
    Dr. Baer. I recently was president of an international 
scientific society, the Optical Society of America, and I 
traveled all over the world, met with leading scientific groups 
and also ministers of science in a number of countries--Japan, 
China, Taiwan, Germany and Brazil--and all of these countries 
had programs, I think, which conveyed the message to our 
universities of the importance of a focus on applied research 
and manufacturing, and that is almost as important as anything 
you structure into a bill is just raising awareness of the 
contribution that the university sector can make to industrial 
competitiveness in the United States. We have long emphasized 
here the importance of basic research and scientific research 
in general. We have not done as well as we could just valuing 
the contributions that can be made to advanced manufacturing. 
Putting in place these programs, incentivizing them through 
competitive grants and matching grants I think will just change 
the attitude and culture. My institution, Stanford University, 
is one of the best in the United States at recognizing the 
value of applied research and a strong interface to local 
industry around Silicon Valley as well as worldwide, and I 
think this will be a remarkable change that will take place if 
these bills are funded and the funds made accessible to the 
universities.
    Mr. Lipinski. I just have to add, Dr. Baer, I am very proud 
to be an alum of Stanford.
    Mr. Muro?
    Mr. Muro. And I would, very much in the spirit of these 
comments, note that I think our country lacks the sense of a 
national strategy in the area. There isn't a clear direction or 
even to an extent a significant stressing of the importance of 
this. There is a lack of industry roadmapping, which I think 
your bill is beginning to try to take on. So these things would 
give a context for individual, more pointillistic effort such 
as, you know, the NNMI. And meanwhile, our country hasn't until 
very recently thought so much about the subnational, you know, 
nature of the innovation economy, and it hasn't thought so much 
about the applied aspect. So I think a stronger focus on, you 
know, regional policy as a part of innovation, and we think 
again that federal challenge grants to regions are a great way 
to prompt the kind of collaboration that will generate 
information exchange and innovation.
    Mr. Lipinski. I have very little time left. Let us see if 
we do it very quickly. Any suggestions specifically on 
improving technology transfer, which I think is one of the most 
important things that I have focused on since I have been here. 
We have great research at our universities, our national labs. 
How do we improve technology transfer to manufacturing? Who 
wants to jump in? Dr. Baer?
    Dr. Baer. I think I will use my institution, Stanford, as 
an example. The goal of technology transfer is not to earn 
money for the university through licensing but rather to 
promote the commercialization of technology that's been co-
developed or developed at Stanford University, that attitude 
where you use the licensing process as a route to 
commercialization, that being the goal, and I will tell you 
that our university reaps the benefits more than tenfold by 
just generous contributions to the university supporting 
research and development, and also contributions to the 
endowment from grateful alums and grateful companies more than 
ten times the return they get from their licensing processes. 
So that attitude change, I think, is something that will 
promote the technology transfer and facilitate it between the 
universities and the commercial sector.
    Dr. Taub. I would just build on that for 30 seconds. I 
spent my, you know, 30 years in industry working quite closely 
with universities in this country and around the world. Getting 
the statement of work between the university professor and the 
industrial researcher is normally a 2-day exercise. Working 
through the intellectual property arrangement can take months. 
And it is this whole question of the federal investment leading 
to the invention, leading to the intellectual property, how is 
the university going to benefit from that. It slows down and in 
many cases stops progress.
    Mr. Muro. If I could add one note, I think one of the 
weaknesses of our tech transfer activities is, they don't work 
particularly well for SMEs. The whole structure, the whole 
licensing process--and this applies in spades to the national 
laboratories--is oriented towards much larger companies, and I 
think, you know, the voucher is an interesting way to try to 
start a more kind of anarchic and maybe productive set of 
relationships with smaller firms, but I think that is an area 
that is important to look at, and I think it is excellent that 
the bill is going to have an experiment with vouchers.
    Mr. Lipinski. Thank you.
    Chairman Bucshon. Thank you. I now recognize Mr. Collins 
for his questioning.
    Mr. Collins. Thank you, Chairman.
    I have spent my life in manufacturing and some of it 
advanced manufacturing. I have got a LEED-certified 
manufacturing plant, ISO 9000 or 13458, and certainly have Lean 
Six Sigma alive and well in all my companies, and what I point 
out is, all of that came through public-private partnerships 
with universities--State University of New York at Buffalo, the 
Center for Industrial Effectiveness, RIT, Rochester Institute 
of Technology, their Center of Excellence and Sustainable 
Manufacturing--and as a small company, without their knowledge 
and their assistance, I think it is safe to say as a small 
company, we would not have had the resources. So, you know, in 
some cases we are talking about motherhood and apple pie here, 
the six-to-one job-creating add-on; for every manufacturing 
job, there are six others, anything we can do to assist small 
businesses who are always cash-restrained. So just quickly if 
you could comment on your experience with the small companies 
and, in this case, use of government funding in supporting 
these institutions of higher education and then helping these 
smaller companies implement these critical strategies for their 
success. Dr. Taub or Dr. Baer?
    Dr. Taub. Well, having spent my career in three Fortune 10 
companies, I am now on the board of small companies, beginning 
to learn that world, I actually don't believe the agenda for 
the small companies and the large companies is that different. 
The small companies enter the supply chain. They become an 
integral part of an industrial sector. I think part of the 
issue of small companies accessing the universities and 
national labs is it is cumbersome. I mean, you know, the 
companies I was in, we had an office. I had a director that 
would spend their time opening the doors and seeking out these 
things. So there has been talk about making the capabilities of 
the universities and the national labs more available. You 
know, just who do you go to? With all today's modern IT 
technology, how do you go there? And then I am very intrigued 
by this voucher program. You know, at $30,000 to $40,000 per 
grant, you can get a good start, but let us not do it so it 
becomes $40,000 of overhead and a full-time person at every 
small company to get in there. By the way, I have also 
supported work at RIT.
    Mr. Collins. Thank you.
    Dr. Baer. In contrast to Alan, I have spent most of my time 
with small startup companies within Silicon Valley and have had 
very constructive interaction with some universities. I think 
the University of Rochester, RIT and the State of New York 
actually does an excellent job of supporting SMEs and growing 
them, and I think a lot of it is again just attitude, lowering 
the barriers, encouraging the interaction between the 
university sector and the private sector, and streamlining the 
intellectual property process. I think it is very possible for 
SMEs to interact with universities constructively. I have also 
had some very disappointing interactions where the expectations 
were just out of line, and I go back to the idea that the 
universities, particularly the smaller universities, often look 
to the licensing process to generate revenue and it is just not 
a very realistic way to approach that. Incentivizing them 
through government contracts and government programs like the 
voucher program to participate with industry without looking to 
the licensing process could be a key element.
    Mr. Muro. And I would add that use of the challenge grant 
is a way to require really the participation of the full 
panoply of types of firms. I would suggest that where you have 
a stipulation for a particular consortium that it includes some 
provision for SME participation, which many firms want, given 
that they are part of their supply chain in the first place. So 
I think you are on the right track with the challenge consortia 
model but it ought to be, you know, explicit that the SME ought 
to be part of it.
    Mr. Collins. Thank you. I think from our experience, 
without some level of this kind of support, the small 
companies, as much as they would like to do something, they 
don't have the resources, and in most cases, certainly up in 
our part of the world, it is generally a 50/50 spilt between 
the small business and the university, and you know, it is just 
what we need to jump-start some of these initiatives.
    My time is expired, so I yield back. Thank you very much.
    Chairman Bucshon. Thank you. I now recognize Ms. Johnson.
    Ms. Johnson. Thank you very much, Mr. Chairman. I think I 
will pass because I enjoy what I am hearing, and I don't want 
to mess it up.
    Chairman Bucshon. All right. Mr. Bera, is he here? No. Ms. 
Esty, you are next.
    Ms. Esty. Thank you very much, and I too am enjoying this. 
I hail from Connecticut, where this is core to what we do, both 
with large and small manufacturers, but particularly small 
manufacturers. So there are a couple of points I want to follow 
up on, and probably start with you, Mr. Muro, both on vouchers, 
which we have been talking about, Connecticut is one of those 
states that with the Connecticut Next program we are test-
driving vouchers. So I know you know a little something about 
that, and if you could share with us what other states are 
doing around vouchers, what has been the experience so far, 
what could we learn and incorporate into our legislation to 
make it more effective. That is question number one.
    Question number two, which a number of you have touched on, 
the importance of regionalization. It is something we are 
looking to do in Connecticut and in New England in our sectors, 
both on biotech, biomed and manufacturing. I am increasingly of 
the view that that interaction between universities, small 
companies and large companies and our technical high schools, 
which we haven't even mentioned, and our community colleges, to 
create an ecosystem for this innovation. So if you could talk 
about that importance of having them really in fairly tight 
proximity and what we could look for and what role the Federal 
Government might play in facilitating those regional hubs 
without picking winners and losers, which I know we all are 
very concerned about and yet if you don't have a critical mass, 
you are not going to get those synergies which frankly the 
cotton gin came from Connecticut. It was those synergies and 
water power that helped develop our first industrial 
revolution. Thank you.
    Mr. Muro. First I will note that the major experiments with 
vouchers have been European to date. You and Iowa are the new 
experiments in this country, so there is not a lot of U.S. 
experience to fall back on. We think it is a deeply American 
solution. We should have piloted and invented this rather than 
our European competitors because it respects the market aspect, 
the organic aspect and the fast-moving aspect of, you know, 
this kind of technology exchange that needs to occur. I would 
stress simplicity, quickness. You want to--they are a fast--
they should be a fast, direct way of getting support to SMEs 
and, you know, the Administration has to be kept lean and 
simple, and we know that to some extent Federal Administration 
doesn't inherently lean that way. So I think that is--but I 
think it is an important experiment.
    I would just say the ecosystem side, this discussion has 
really blossomed in the last five years, and I think the 
literature is increasingly confirming that there are innovation 
and entrepreneurship benefits to density, and I would not--I 
would stress a couple aspects. I don't think we should think in 
terms of inventing clusters or creating them. They are an 
organic fact of how the economy works. So we should acknowledge 
that they exist and then have policy flow behind that. So I 
think again, you know, bottom-up, you know, challenges to 
regions to propose great cluster initiatives and provide the 
performance management is the way to do this, and I think, you 
know, we have seen across EDA, across the Department of 
Commerce and NSF as well, we have seen more and more interest 
in these challenges to bottom-up regions. So I think we 
shouldn't really think of moving firms around. We shouldn't 
think of creating density but we should think of respecting it 
and suggesting it as a value. So thanks a lot.
    Dr. Baer. I believe clusters and the regional emphasis is 
absolutely critical. I come from arguably the largest 
innovation cluster in the world in Silicon Valley and I can 
encourage my students to join a startup and take a risk because 
if it does not succeed, there are many other opportunities. The 
forces of creative capitalists, creative destruction are no 
more evident than in Silicon Valley. Clusters don't occur 
spontaneously. I think they do need a seed in which they can 
grow and I think the government can provide that seed funding, 
but what is critical is that there be opportunities so that 
students and employees can take that risk and join small 
companies that just have a different risk profile than some of 
the larger companies, so clusters and regional emphasis I think 
are critical.
    Dr. Taub. Yes, quickly. It has always been intriguing to me 
that we are in an age of virtual collocation. You know, every 
company I had, we had ten, 20 engineering and R&D sites around 
the world, all communicating in webcasts, but if you peel that 
onion--and I think we all believed, okay, we will have the best 
people, individuals sitting around the world somehow merging 
into this coherent entity, and I think that dream did not 
materialize because we still need some physical presence. And 
so I think the key to it--and this was part of what came out in 
the NNMI workshops, have a regional flavor in terms of what you 
want the proposal to be, but do not pick the technology. Do not 
pick the industry. Distribute them, let them have national 
impact, regional flavor but let the particular technology and 
industry self-assemble. I think the clusters are ready to form.
    Chairman Bucshon. Mr. Hultgren, five minutes.
    Mr. Hultgren. Thank you, Mr. Chairman, and thank you all 
for being here too. I appreciate your time and your testimony.
    For me, there is no question that advanced manufacturing is 
the way our manufacturing base will continue moving, and our 
skills in this area are absolutely needed to maintain American 
competitiveness here and also abroad. The easiest way to ensure 
that American jobs stay here is by having advanced facilities 
that cannot yet be replicated elsewhere.
    That being said, it is our job as policymakers to plan for 
this in a fiscally responsible way while also taking into 
consideration the countless factors that are forcing businesses 
to move elsewhere or never even begin as a startup here in the 
United States.
    First question, Dr. Taub and also Dr. Baer, in your 
testimony you discuss the value both at NIST labs and the NIST 
extramural programs provided to American manufacturers. Given 
our current budget climate, it is difficult to envision 
significant increases to certain programs without corresponding 
cuts elsewhere. I wondered if you could address how you would 
assess the current allocation of funding for NIST programs 
between intramural research and extramural programs, and as we 
look to reauthorize the Institute, should we be looking to 
rebalance this allocation?
    Dr. Taub. Well, I think in the past several years, the 
growth at NIST has been more around the extramural activities, 
building off their strong laboratories, but at the same time, 
you can--the reason and the value of the extramural activities 
being under the same umbrella as the laboratories is relatively 
unique among the agencies. Normally, you know, the Washington 
office and the labs, if you look at the agencies, don't 
collocate. So saying that the tradeoff should be between those 
two, I am not sure is the right way to think about it. I 
believe you need to go up to the larger R&D investment that the 
Federal Government makes and give a true look at how much of 
that pie is going to advanced manufacturing, whether it is at 
NSF, whether it is at DOE, whether it is at Commerce. The 
question is, which federal investment in technology is going to 
lead to jobs and is going to lead to economic well-being rather 
than the tradeoff within NIST.
    Mr. Hultgren. Dr. Baer?
    Dr. Baer. You know, I challenge this distinction between 
intramural and extramural funding and saying that it is a 
balancing act. As an example, I have been involved with a 
program at Stanford called--with NIST called the Advances in 
Biomedical Measurement Science, which has a distinct advanced 
manufacturing component associated with it. We now have six 
NIST people located on Stanford campus, part of the intramural 
funding that they get, interfacing with local bio technology 
companies in Silicon Valley and the proximity, as Alan 
mentioned, is absolutely critical, and this program sort of 
combines the best of intramural and extramural funding, and it 
was conceived of by Willie May, the Associate Director of 
laboratories at NIST, and I think is a tremendous example of 
how NIST needs to diffuse its borders with U.S. industry and so 
this idea that somehow we have to judge and decide between 
intramural and extramural is something I think we should 
question because I think allowing NIST management the freedom 
to utilize the resources along this way, given the excellent 
quality, as Alan has mentioned, of the leadership there right 
now, will result in optimal use of their total resources.
    Mr. Hultgren. I think that is helpful. My passion still is 
making sure we are doing what no one else can do, and so that 
is that question of figuring that out, you know, what can 
industry do, what do we have to do, and figuring that out.
    Let me switch gears a little bit. Mr. Muro, in your 
testimony you discuss how community colleges remain seriously 
divorced from the industry needs and that advanced 
manufacturing education grants could help close this gap. 
Personally, I am very interested in this. I have got seven 
great community colleges in my district, but really interested 
and concerned and passionate about changing this disconnect 
between community colleges and industry. I wonder what other 
recommendations you might have to bridge the needs of these two 
stakeholders.
    Mr. Muro. I do think that this is one of the crucial 
challenges we face if we are going to have a sustainable 
manufacturing renaissance. We are not in a position presently 
to fully staff it. I think the fundamental problem is that we 
have had a disconnect between a whole series of economic 
development initiatives and then another series of education 
and training activities that have really, you know, grown 
quite--that developed their own cultures. They are really quite 
separate from each other. So I think it is going to take some 
stressing of the system through, I think, these kinds of 
challenge grants that are going to, you know, compel or call 
out the kind of interactions that need to happen because I 
think in general, we find that industry has not--is not 
informing these reforms significantly, meanwhile community 
colleges are erratic in their ability to reach out. Some of 
them are developing extremely powerful programs. Many are 
trapped in inertia. So I think that these kind of challenges 
and competitive offerings are one way to begin to force the 
kind of collaboration that is needed.
    Mr. Hultgren. Well, again, I appreciate you all being here. 
My time is expired. But this is an interesting conversation and 
one I hope we can continue. I have some questions I wasn't able 
to get to so I would ask if you are okay with that if we can 
follow up with some questions and further dialog.
    Thank you, Mr. Chairman. I yield back.
    Chairman Bucshon. Yeah, and you can submit those and they 
will get written answers.
    I recognize Ms. Kelly.
    Ms. Kelly. Thank you so much for being here. As many of my 
colleagues know and many of my districts too that our companies 
are saying they can't find enough skilled workers, and for me, 
I represent the south side of Chicago all the way to Kankakee 
County, and from the Ford plant to BSF, they have said the same 
thing. We started a STEM council, and in the STEM council, we 
have the community colleges, we have some of the businesses, 
some entrepreneurs and tech folks, but one of the things is 
when some of the companies, to their credit, tried to start 
internship programs, they couldn't get one person from the high 
schools to even come to be interns, and so I think that also we 
need to do a better job, different job in explaining what 
manufacturing and advanced manufacturer really is, and it seems 
to me we even need to start at a younger age in, you know, 7th 
grade and 8th grade to get students more involved because if 
they are not involved, it doesn't matter what we offer. You 
know, they are not going to take the subject up anyway. And I 
was just wondering what you thought about that, how early we 
need to start, and I am really trying to push for some of my 
businesses to actually adopt schools or adopt programs. 
Navistar did it in one of my schools, and it has work out 
fantastically.
    Mr. Muro. I will make one observation quickly, which is 
that you are right that there has been--I mean, I think the 
Federal Government has had strong interest in STEM but it has 
been a STEM definition that presumes postgraduate studies, so 
it defaults to the training of engineers and Ph.D., which are 
critical but we have neglected--and we did a recent accounting 
of federal programs on this. There has been a neglect of sub-
baccalaureate STEM, so-called middle skilled-STEM workforce, 
which is what, you know, GM needs in Tennessee, you know, so 
there is this huge breakdown for the advanced manufacturing 
agenda that our cultural focus and the programmatic focus has 
been towards postgraduate and Ph.D. So I think there needs to 
be some kind of balancing at the federal level.
    Dr. Baer. My wife is a children's librarian, and she has 
science programs that she has organized for 3- and 4-year-olds, 
and they do paper chromatograph, she has a section on optics 
and lasers, and the excitement of those children is phenomenal 
even at that age level. You just can't start too early. A large 
part of it is the attitude and value system established by the 
President and by you. I remember the excitement as I was 
growing up about the space program, and that came from here, 
from Washington, from the President, and if we can establish 
that as a culture, I think the educational system and the 
students will just flow into it. It will take some programs. It 
will take some intelligent legislation, but I think a lot of it 
is just changing the culture and attitude, and that leadership, 
I think, is now coming from you with these bills and coming 
from the President, and I think it is wonderful.
    Dr. Taub. Yeah, I mean, there is no question if you don't 
hit them in K-12 or I would actually argue in K-8, we have lost 
them, and we watch other countries where that isn't occurring. 
At the same time, there are programs that just need to be 
expanded. I don't know if you have ever been to a robotics or a 
math competition. It is like going to the football game in 
terms of the excitement there, but look at the number of 
children that are in those events versus the sports events 
versus some of the others. So to the extent--culture change, 
you know, in this country doesn't happen by aid from above. It 
happens by catalyzing grassroots events and so again, find a 
way to have the Federal Government expand those things because 
we are having trouble. Well, now I am at the university so I 
guess I am part of the supply chain problem, but the reality 
is, we have to go overseas to import our engineers. We have to 
turn that around.
    Ms. Kelly. Thank you very much.
    Chairman Bucshon. Well, I thank all the witnesses and the 
Members for their questions, and I think, Dr. Baer--I am on the 
Education and Workforce Committee also, and so we could talk 
about this issue. In fact, Ranking Member Lipinski and I were 
just talking of exactly what, Ms. Kelly, you were talking about 
literally seconds before you made your comment, and it is 
critical that we start at a young age and get people interested 
in these fields. I have four kids, and I am working on it.
    But thanks for the really valuable testimony, and the 
record will remain open for two weeks for additional comments 
and written questions from the Members.
    At this point the witnesses are excused and the hearing is 
adjourned. Thank you.
    [Whereupon, at 11:21 a.m., the Subcommittee was adjourned.]
                               Appendix I

                              ----------                              


                   Additional Material for the Record




                 Submitted statement for the record by
                 Full Committee Chairman Lamar S. Smith

    Thank you, Chairman Bucshon, for yielding me time.
    Today's hearing will examine how federal advanced manufacturing 
research and development programs improve American competitiveness. It 
is critical that we understand how we can best prioritize among these 
programs.
    I am also pleased that we have an opportunity to review Ranking 
Member Johnson's bill, H.R. 1421, the ``Advancing Innovative 
Manufacturing Act of 2013.''
    We must foster innovation so that powerful new technologies are 
developed here and not overseas. And we must ensure that the United 
States provides the best environment in which to do business.
    While I agree with the Ranking Member that advanced manufacturing 
is critical to future American competitiveness, I have some 
reservations about her bill.
    In particular, I'm concerned about the authorization of new federal 
manufacturing programs without identifying cuts elsewhere in the budget 
to pay for them. We cannot continue to spend more taxpayer dollars for 
advanced manufacturing without finding offsets from other lower 
priority programs.
    As we look to reauthorize the National Institute of Standards and 
Technology, I'm hopeful that today's hearing can shed some light on how 
best to prioritize advanced manufacturing programs at the Institute.
    I'm also hopeful that we can identify some common ground for 
working together across the aisle to improve federal programs to 
support advanced manufacturing. Again, I thank the Chairman for holding 
this hearing, and I yield back the balance of my time.
       H.R. 1421, Advancing Innovative Manufacturing Act of 2013































                                 
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