WASHINGTON—Energy innovation has the potential to strengthen U.S. manufacturing, but market failures lead to gaps in private sector investment. The U.S. Energy Department’s “Manufacturing USA” innovation institutes help bridge those gaps, according to new report released today by the Information Technology and Innovation Foundation (ITIF), but sustaining long-term energy innovation will require more stable funding and additional measures to build on the institutes’ early successes. ITIF, the leading think tank for science and technology policy, offers a series of policy recommendations for Congress and the administration to ensure the institutes fulfill their potential.
“Energy innovation is a valuable investment for the U.S. economy, but it takes time and resources to develop and commercialize the technology,” said ITIF Senior Fellow David Hart, co-author of the report. “After only a couple years, DOE’s Manufacturing USA institutes are showing promising results. Rather than cut their success short, the institutes should be sustained with long-term, stable funding, and DOE should make sure they have the tools they need to navigate market challenges that are far more complex than the conditions most start-up organizations face.”
The five Manufacturing USA Institutes sponsored by DOE seek to accelerate innovation in industrial processes that use energy and in products used by the energy industry. Each institute, founded between 2015 and 2017, is a consortium of large and small companies, academic and nonprofit institutions, and national laboratories. The members, with additional support from state governments, provide non-federal funding that matches or exceeds the initial federal investment in each institute.
To secure long-term support for the institutes and ensure they are positioned to succeed, the report recommends that:
- Congress continue to fund the institutes that have already been established;
- DOE allow the institutes greater flexibility in raising and using private-sector funding in parallel with federal funding;
- Congress and DOE provide opportunities for the institutes to receive federal funding beyond the current limit of five years—and consider establishing a permanent program of support;
- The institutes intensify their outreach to small and medium-sized manufacturers;
- The institutes develop more education and training programs for technicians and other mid-skill manufacturing workers;
- DOE better inform the public about the distinctive energy-specific mission of the DOE-sponsored Manufacturing USA institutes.
“The private sector is ultimately responsible for implementing manufacturing and energy innovations, but market failures justify an active role for the federal government,” said Peter Singer, co-author of the report. “A stable commitment to energy innovation will hasten progress toward national economic, workforce, security, and environmental goals—worthwhile returns on U.S. investment.”
Read the report.
