Washington Post: The Daily 202: A senator from Michigan will propose a National Institute of Manufacturing modeled on the NIH

KEY EXCERPTS:

THE BIG IDEA: Sen. Gary Peters (D-Mich.) says the decline in American manufacturing is as much a failure of public policy as anything else.

“Jump-Starting America,” a book published in April by Jonathan Gruber and Simon Johnson, compares the 10 metropolitan areas with the highest average earnings in 2016 to 1980. Back then, five of the top 10 were in Michigan: Flint, Detroit-Warren-Dearborn, Midland, Saginaw and Monroe. None of those places make the list anymore.

“In the years since 1980, our country’s economic policy priorities have shifted to other industries like technology and health care,” said Peters, 60. “As a result of this shift, communities like Flint and Detroit have seen their economic opportunity decline while regions like Silicon Valley and Boston have prospered.”

Meanwhile, the senator lamented in an extended interview over the weekend, countries like China, South Korea and India have successfully implemented national manufacturing plans. He pointed to investments by South Korea to develop self-driving vehicles and by China to build better electric batteries. According to Peters, the United States has increased spending on research and development for manufacturing by about 10 percent over the past five years while Beijing increased it by 90 percent and Seoul increased it by 50 percent.

“Other countries have strategic visions. There's no reason why we can't,” he said. “Something I believe to my core is that you can't be a great country if you don't actually make products that you can sell around the world. So many countries understand the importance of their manufacturing sector. They invest … they nurture … and they work on coordinated policies to make sure the sector is healthy and vibrant. Yet we really haven't done that in this country. Manufacturing has played a back-seat role.”

In a speech on Tuesday, Peters plans to propose the creation of a new federal agency to chart a national industrial policy. His inspiration for what he wants to call the National Institute of Manufacturing comes from the National Institutes of Health. Peters said he studied everything from the creation of the National Science Foundation to the Department of Homeland Security. “This will be an executive branch agency that will house our national manufacturing programs under one roof,” he said. “NIH does a great job of coordinating a strategic vision for health care. Something similar should exist in manufacturing.”

Peters shared an early look at the draft of the keynote he plans to deliver tomorrow afternoon at a manufacturing summit being organized by a University of Michigan professor with the help of federal grants. He’s speaking between Sen. Marco Rubio (R-Fla.), who has also been devoting increasing attention lately to this issue, and officials from the Pentagon and Commerce Department.

The Government Accountability Office tabulated in a 2017 report that there are 58 programs that focus on manufacturing, but they’re scattered across 11 federal agencies. Peters argues that the government does not need to spend more money to foster innovation. He said he believes the problems are inefficiency and insufficient attention from the most senior administration officials. He would streamline all these initiatives and put them under one umbrella.

“If you study those programs, they’re kind of buried in the bureaucracy of all these different agencies,” he said. “They probably were just added on over the course of years. It was like, 'Oh, we should probably do something on manufacturing. Let's create this specific program.' But there was no broad, comprehensive thought that went into it. Now's the time to coordinate all that.”

In the same vein as the NIH, which established institutes to combat diseases like cancer and HIV/AIDS, Peters said the National Institute of Manufacturing would have directorates to focus on technology development, industrial commons, education and the workforce, small and medium manufacturers, and trade.

Peters emphasized that most R&D would still be funded by business. “The NIH picks up those areas where the private sector, the pharmaceutical companies, might not be investing in research,” he said. “We’re not doing that in manufacturing.”

Peters said the existing efforts are “by and large good,” but they’re too siloed. “Unfortunately, these programs do not always work in concert with each other,” he said. “In some cases, there are layers and layers of bureaucracy that prevent an idea from seeing the light of day. We cannot let bureaucracy and disjointed programs stifle innovation.”

The senator wants to create a new role for a manufacturing czar who could report directly to the president. This person would be called the chief manufacturing officer of the United States. “It's important to put someone in charge,” said Peters. “You cannot have someone who has to wear 20 different hats. If you're wearing 20 different hats, some of those hats aren't going to get the kind of attention that they deserve. And that's why we want to put all of this into one umbrella organization.”

The senator said he wants the National Institute of Manufacturing to be a bipartisan undertaking. Peters is looking for Republican co-sponsors in the Senate and House. He’s planning to circulate a draft of his bill to offices on both sides of the aisle before introducing it so that he can make whatever changes are necessary to get broad support.

Peters argues that a nimble enough government policy that encourages the application of machine learning and artificial intelligence to manufacturing could bring back jobs that have gone overseas. We spoke on Saturday afternoon by phone as he drove between events in Michigan. Peters said that this new chief manufacturing officer could be the government’s point person on making sure young people learn the job skills necessary for the factories of the future.

“If you go on the factory floor in Michigan, it's not your father's or grandfather's factory,” he said. “As I travel around Michigan … the number one problem that they're facing is a lack of skilled labor. They say they have the job openings. They just don't have folks with the right kind of training and skills they need.”

In his speech tomorrow, Peters will make the case for optimism. “Venture capitalists call this disruption,” he plans to say. “I take a different view. I think change is only disruptive if it’s happening to you. If you are leading the change, it becomes transformational.”