U.S. Department of Commerce It is a pleasure to join you here today in the Lone Star State, the proud state of Texas. On behalf of President Clinton and Secretary Brown, I want to welcome you to the Intelligent Manufacturing Systems Symposium.
As one of your hosts, the Department of Commerce believes this is an important event. Your attendance today, demonstrates that you think so, too. And let me also point out that both the United States and Canadian governments are participating. But more important industry groups from the U.S. and Canada have been leaders in the effort to organize this workshop.
Before I begin, let me convey our excitement about this program. I applaud the work of Bob Cattoi and the International Steering Committee and congratulate them on the success of their feasibility study. The Steering Committee has laid a firm foundation for a visionary program. On that foundation it will help to build a strong future for the manufacturing sectors of all nations and regions represented in this process.
This is a new era -- an era of global economics and global competition. The IMS Program sets an agenda to achieve and maintain excellence in the manufacturing sector in this new era. It is an agenda that will create economic vitality through high-wage jobs. And we are confident that it is an agenda that will translate well beyond the manufacturing sector.
This morning, I want to provide you with an understanding of how the IMS Program is coupled with the economic policies of the Clinton Administration. This Administration understands the importance of manufacturing to our nation's economic strength. And it understands the role our technology policy plays in maintaining our manufacturing sector's strength.
So let me talk first about the President's plan to revive America's economic competitiveness through an aggressive new Civilian Technology Strategy. And as I discuss this strategy, I am sure the connection to the IMS objectives will be clear.
As you know, economic growth is the Clinton Administration's top priority. Sustained economic growth raises the Nation's standard of living and enables us to pursue our nation's social objectives. Many of the challenges we face today--joblessness, stagnant incomes, trade problems, and the like-can be traced to our lackluster economic performance.
For years, other nations have encouraged us to put our economic house in order. In the first year and a half of this Administration we've been doing just that. The President is tackling the toughest issues and making hard decisions. He cut the budget deficit by half a trillion dollars. And we are looking for ways do even more.
But, we know that the way out of the economic doldrums is through growth. And we know that about 50% of economic growth over the last decade is attributable to advances in technology. Armed with this information, the Administration is shaping technology policy that will engage the vast energies of federal research but keep private industry in the driver's seat of technology commercialization.
Since World War II, government's role in civilian technology has been very hands-off. And commercial benefits have come as a derivative of its mission-related research, in areas such as defense, space, and nuclear technologies.
New discoveries in our labs found their own way through a "pipe-line" of applied research, development, design, and commercialization, or they didn't. But either way, little consideration was given to the process. And government technology made its way to industry through trickle down, spin-offs, and technology transfer after the fact.
That approach may have been adequate when U.S. companies dominated world markets and our top priority was winning the cold war. But that era is over. In this new era we face unprecedented global competition. And if we hope to compete and win our share than we must find a new way.
Achieving sustained economic growth now dictates the implementation of new civilian technology strategies. But it is not solely the end of the cold war that threatens the competitiveness of our civilian industrial base.
As the world's economy has gone global, American industry has followed suit. High-volume standardized production has given way to flexible manufacturing systems with more customized products and services. But at the same time, customers believe they can get--and should get-- products at low, low prices. And, while customers expect that, our best and most well-known companies--especially, if they are large and slow-moving--are challenged by networks of nimbler competitors. And from all sizes of companies, customers demand total quality.
Moreover, competitiveness today does not just result from major breakthroughs in the science lab, followed by a trip straight through the innovation pipeline. More often, the edge comes from rapid, continuous improvement of products and processes. It is an "iterative" innovation process that flows in a loop from customers to factory floor and back again.
Industry has found -- some painfully -- that the pipeline can fail in other ways. A product's journey from research, through development, to design, and finally commercialization can be slow, inefficient, and costly. It can fall short of today's quality standard. And, perhaps most important, it may not optimize human resources.
You all know the stories about innovations in U.S. laboratories that led to manufacturing jobs overseas. From the VCR, to gallium arsenide for next generation integrated circuits, to flat panel displays -- breakthroughs in U.S. labs have not always made it through the pipeline to manufacturing plants in the U.S. (or have made it through only in a trickle). One such story would be understandable. But so many is inexcusable. We must do better in the future, and we will.
Rapid changes in the manufacturing sector combined with new realities we face on the political and economic fronts, have defined unique challenges to our economic vitality. Our response to these challenges is nothing less than a revolution -- some are referring to it as the second industrial revolution.
And as we face these challenges, it is crucial that government be a strong and dependable partner. A good partner knows how and when to step in to help with some of the heavy lifting -- but also knows how to get out of the way when the private sector can carry the burden alone.
We are proving to industry that we can be that kind of partner. President Clinton's ambitious technology strategy departs sharply from past policies. As I said, it explicitly acknowledges the link between technology and economic growth. And it provides a new framework for the role of government in helping private firms develop and profit from innovations.
The Strategy is designed to:
One part of developing that modern infrastructure--the information superhighway, as it is often called, requires the cooperative effort of both government and industry. In the 50's and 60's, the development of our Nation's interstate highway system revolutionized the American economy. The Information Superhighway will revolutionize it again in the 90's and on into the 21st Century. The Administration's initiative has clearly sparked U.S. industry's interest. And the private sector is moving forward aggressively.
The second part of the technology strategy--increasing investments in technology --is very powerful. We are effecting this new technology strategy through a major expansion of the government's technology development and deployment initiatives.
On the development side, this Administration is attempting an historic shift in the allocation of Federal R&D resources. Our goal is to change the mix of our government's investment in civilian and defense R&D from 60% defense to a mix of 50%/50%. That is a big deal, but one we believe in.
As part of this effort, the Administration launched the Technology Reinvestment Project. The unprecedented multi-agency Project will stimulate the transition from defense to civilian capabilities. A team of experts representing each of the major technical Federal agencies -including the Department of Commerce -- jointly reviewed and prioritized the proposals. This year alone, $470 million is set aside for the TRP.
Our partnership with the Nation's Big Three auto makers is another remarkable initiative. Together we are developing technologies for a new generation of vehicles. From the government's side, this partnership represents an opportunity to merge programs that exist in several Federal agencies into something with some real clout. I am quite sure that Mary Good will tell you more about this partnership in her address to you tomorrow.
And we are building on already successful programs. Dramatic expansion of the Advanced Technology Program has already begun. This program shares, with private companies, the cost of developing high-risk high-gain technologies. These powerful technologies underlie a broad spectrum of new applications, commercial products, and services. This year the program's budget tripled to $200M. Approximately 17% of the projects funded to date relate to manufacturing.
A good example is a collaborative venture between Allied Signal, Cincinnati Milacron, Golden Technologies, Autolite, Ceramic Components and Pennsylvania State University. Together, they are developing powder-injection-molding technologies for ceramic materials -- molding technologies similar to those used to manufacture $20B in plastic products each year.
And, we have recently announced program competitions that will be even more aggressive. Two of these program competitions closely relate to manufacturing.
Manufacturing composite structures, for instance, will address critical issues facing the use of some of the exciting new materials being developed in our laboratories.
And computer-integrated manufacturing for electronics aims to develop a flexible software-based framework for integrating manufacturing and production operations in the electronics industry.
These projects have been extremely successful. I believe much of their success stems from the cooperative nature of the program. Industry invests at least 50% of the costs. And it's done on a for profit basis.
But this is not just a way to encourage innovative technologies and energize purely high-tech industries. Rather, we are expanding proven programs that take those new technologies and put them to work on the factory floor. Our technology policy is not just about people in labs. It's about the men and women who grind tools and cast auto parts for a living.
On the deployment side, we have made real strides to implement the President's vision of a nationwide network of manufacturing extension centers. As many as 100 of these centers will give businesses access to the technologies, training programs, and other assistance they need to modernize their operations.
Matching these programs with industry's goals and priorities is imperative. The Federal government will never be the same kind of customer for civilian technology that it was for defense technology.
Consequently, our civilian technology initiatives will succeed only if they are customer-driven. They must be carried out on the basis of direct input from the private sector. The Federal technology enterprise can become a world-class supplier only if U.S. industry is a good customer and clearly voices its needs.
The Administration's new approach to civilian technology policy is exciting and timely. However, the transition is occurring during a period of shrinking federal budgets and scarce resources. By focusing our efforts carefully and leveraging Federal expenditures, relatively small investments can yield big dividends.
The government must learn to wield its influence in ways other than through huge federally funded programs. We must become better collaborators. And we must encourage partnerships wherever possible.
This of course brings me back to the IMS Program. The IMS Program helps move these kinds of collaborative partnerships. And at Commerce, we see it as fitting beautifully with the President's technology strategy.
Manufacturing is a key industrial sector and truly a cornerstone for economic growth. President Clinton's own words say it best "Manufacturing remains the foundation of the American economy."
IMS can be a catalytic agent for global cooperation in manufacturing. It can provide a framework for
The Rapid Prototyping Test Case collaboration, for instance, involved 21 partners from four regions, (including from the United States the United Technologies Corporation, Sandia National Laboratories, Carnegie Mellon University, MIT, Purdue, RPI, and the University of Texas). That program continues to this day.
IMS is a fresh and innovative approach to every nation's need to look beyond its borders, and every company's need to look beyond its own factories' walls. Although the program's goals are lofty, we should not fear reaching for them.
As with the rest of the Administration's technology strategy, the IMS program represents a partnership between industry and government, with industry in the driver's seat. Government neither defines technical themes for you. Nor does it choose partners for you. We look to industry for leadership here. And the leadership of industry already has made an enormous difference in the success of the Feasibility Study. We will rely on continued industry leadership in this program as it moves forward.
We want the U.S. government to encourage participation of U.S. industry, universities and Federal laboratories by removing obstacles. Such obstacles include poor protection of Intellectual Property Rights ... and ... inequitable access to foreign science and technology. Obstacles can also include foreign trade barriers, capricious anti-trust laws, or illegitimate national security considerations.
Another part of government's role is to ensure that the benefits as well as the risks are shared equitably among IMS project participants. That is, we must ensure that projects included under the IMS umbrella proceed on a level playing field.
Beyond its policy role, Commerce has been designated as the U.S. IMS Secretariat. As Secretariat, we seek to ease the process of finding partners and establishing partnerships. We will serve as an information clearinghouse for interested parties. And to prove that we are serious about this program, Commerce is putting resources into the IMS Secretariat.
But I believe that government's role can go even further. Government and industry share an intense commitment to improving productivity and competitiveness in America. And that includes productivity among government employees.
Part of the productivity equation revolves around the provision of tools. We want to have the best technological tools available for our workers. This is one reason why we have moved ahead with the National Information Infrastructure. Clearly, these information systems tools will be essential components of future intelligent manufacturing systems.
Another part of that equation relates to education and training, especially for our future manufacturing workers. One of the goals of the IMS Program is to enhance the stature of the manufacturing discipline. Another is to improve the quality of education and training for manufacturing workers. Cooperation among the IMS Regions in developing a standardized curriculum, for instance, would be a great place to start.
International standards can have a "pull" effect on worker efficiency and product quality. Commerce's National Institute of Standards and Technology (NIST) would play a key role in any such development. The IMS Program provides a mechanism for industry and government cooperation in defining these standards.
Let me conclude by emphasizing our support for the IMS Program. Continued excellence in manufacturing is essential to the economic vitality of our nation. We see the IMS Program as an important vehicle for maintaining excellence. And although we are not ready to announce ratification of the Terms of Reference today, many of us feel it will be forthcoming.
As the Full-Scale IMS Program begins we are counting again on industry to take the lead. To those of you representing companies today, let me invite your participation. And, to those of you from laboratories and universities, let me suggest that you use this opportunity to initiate some partnerships. The participation of all of you is critical to the success of this program.
The Administration and the Department of Commerce are anxious to work with you to ensure manufacturing excellence and all its benefits.
As you contemplate this important step we are about to take, I want to leave you with a quote by David Lloyd George who said: "Don't be afraid to take a big step if one is indicated. You can't cross a chasm in two small jumps."
We are not afraid to take big steps. We are not so afraid of failure that we'd prefer to nothing. We're not afraid to imagine the possibilities and reach for those things that are hard to grasp.
Because, if we dare to experiment, to take reasonable chances and risk possible embarrassment, if we dare to lead by example, then we have a unique opportunity to change the world.
I wish you the best during today's and tomorrow's discussions. It has been a pleasure speaking to you this morning and I thank you for your inviting me.