well good morning everyone this hearing will come to order i want to thank everyone for being here today for this important hearing on innovation in manufacturing let me also make a quick announcement and that is that we are expecting to have votes at eleven today which in the world around here it means that we were going to leave until about eleven ten or so so i would for the convenience of the witnesses we have your written statement we're going to try to move things along if there are members that that fill in the then we will stay or that will come back whatever it might be we just don't want to put you out of out and so and i'll should also tell all of you that there are several meetings that you can imagine going on same time and so we will have some members coming in and coming out we have staff in both sides that are that are also here so there is a perception out there that the u s manufacturing sector is on its last legs the truth is however but the manufacturing sector in the united states is alive and will continue to be an important part of our company each year the u s manufacturing sector generates more one point five trillion dollars worth of goods accounts for more than half of the total u s exports and employs millions of people nevertheless it is true that the manufacturing sector in the us is not as strong and vibrant as it once was there is a strong case to be made that in order to avoid further decline we need to take action now to preserve and perhaps even grow the u s manufacturing sector for the future variety of factors have likely contribute to the cloud and u s manufacturing including go book titian but that as it may be our manufacturers cannot and should not compete with other countries own labor cost alone in order to stay competitive u s manufacturers will need to be leaner and more efficient and make better products faster to contest this we need to develop new manufacturing technologies and cutting edge processes we will also need to ensure that mechanisms are in place to take those technologies and processes from the lab to the manufacturing plant u s manufacturers should also be at the forefront when it comes to producing new and innovative have value added products if we want to position our manufacturers to make the next big things of the future we need to make certain that they have the ability to do so quickly and efficiently at the same time the ability of u s manufacturers to innovate and remain competitive is largely dependent on a flexible skilled workforce manufacturing plant of today is not the manufacturing plant of the past today's manufacturing is a high technology activity requiring a workforce with scientific and technical skills unfortunately despite this need u s manufacturers or are experiencing a lack of skilled workers at all levels this committee is committed to doing what it takes to ensure that businesses in the u s including manufacturers have the access to workers they need to get the job done in today's hearing we will focus on what more the federal government should do if anything to help us manufacturers innovate it is my expectation that what we learned today will help inform the reauthorization of the american competes act which the committee is currently working towards i'm confident that our witnesses w should try to be brave is you have then this is another hearing geared toward the reauthorization of the america competes act and let me reiterate that all of us recognize the magnitude of importance that a robust federal research and development enterprise has on our economy or national security and their ability to be globally competitive however they also need to understand their current economic realities unfortunately instead of being responsive to concerns and working to reduce regulatory burdens on manufacturing we're headed in the wrong direction cap and trade is a prime example of this it would add an unprecedented combination of energy taxes and regulatory requirements on the manufacturing sector that would obviously  pressure been says to shift captive and jobs away from important areas such as r and a and it could be argued some are economic woes are a result of manufacturers not unlike the ones before today being over regulated and forced to take their business outside of the statement provided a national petroleum refineries association that states with increasing regulations many companies have been forced to decrease their r and d budgets and shift their resources to regulatory compliance mr chairman i ask unanimous consent that they're written statement be made part of the record without objection i yield back my time thanks if there are members who wish to submit additional opening statements your statements will be added to the record at this point if this time i would like to introduce our witnesses first dr susan smyth is the director of manufacturing systems research and chief manufacturing for general motors company dr lance ours is the vice president of global state a belief proctor game dr de tosh shock regardie is the president and director of technology studies at the competitive enterprise institute as our witnesses should know we try to keep our testimony to around five minutes and your written testimony will be included in the record for the hearing and when all of you have completed your spoken testimony we will begin questions each member will then have five minutes to question the panel so dr smart please begin your testimony mr chairman and committee members thank you for the opportunity to testify on behalf of general motors i am susan smith director of general motors manufacturing systems research lab and i laid worldwide research and development efforts in support of advanced manufacturing and pleased to be able to speak to you today about advanced manufacturing and the important role of the national institute of standards and technology nests and other federal agencies play and support of this vital area of national interest i also look forward to discussing some of the challenges associated with advanced manufacturing and suggesting areas where we can strengthen collaboration automotive manufacturing is one area where we have significant opportunity to expand u s competitiveness and stimulate economic development and grow jobs chrysler ford and general motors together a conference one hundred ten thousand u manufacturing jobs and support three million additional jobs located and all fifty of the united states our three companies annually invest ten billion dollars in u s plants and equipment and into size and age we purchased one hundred billion dollars of u s auto parts materials and services we also spent twelve billion dollars on engineering and research and development the united states along with the rest of the world is working to reinvent manufacturing to ensure competitiveness and prove efficiency increase energy and environmental stewardship and i'd like to highlight a few highlight a few projects that show the strengths of this private public manufacturing partnership nest and manufacturing engineering  tree at nest promotes competitiveness and key manufacturing related areas such as robotics virtual manufacturing green manufacturing and nanotechnologies an addition the next lab drive standards that are ts the adoption  and repeatable process just one example of the power of partnering nist worked with general motors ford and chrysler through the united states consul for automotive research u s car to develop standards for certification of wireless technology these standards have increased o e m productivity and lowered our costs because now we can buy off the shelf certified products and know they will work for a specified function as opposed to testing them all ourselves the next u s car collaboration resulted in the growth of new jobs and a network of small local companies which non certified all these network devices that they conform to industry standards many national labs including this have an influence on manufacturing stands alone as an organization that has the core technical skills the profound knowledge of manufacturing processes and the charter and a passion for manufacturing although m e l is an effective organization focused on customer needs the structure in which it resides is not optimal and the percentage of resources that are dedicated to manufacturing are a very small part of the overall business budget we greatly appreciate working with nist but we believe that the charter should be revisited to live a more equal footing between small and large business the rationale for this requires that the challenges that we are facing today are system level challenges two examples are vehicle electri ication which is nothing less than the reinvention of the automobile and the drive toward sustainable manufacturing technology solutions that will help us meet these challenges need to be driven by a balanced effort of small and large companies to better leverage the speed of the small and the system integration perspective of the large deal we the department of energy has been supporting crucial research and help building manufacturing capability on batteries motors and other electric vehicle technologies through freedom car and the fuel partnerships g m is grateful for the stimulus grants that we received to help us open our new battery manufacturing plants and bronstein michigan and our new electric drive production nasa has recently been an important partner on the manufacturing process together we were able to develop and build a robot not to our r two for short a faster more dextrous more technologically advanced robot this new generation of robot is able to use its hands to do work beyond the scope of any existing humanoid robots and can do it safely side by side with people which is the key to our robotic strategy of humans working in harmony not  with our robotic strategy of humans working in harmony and enabled not replaced by robots as i have mentioned and all the countries we need to see the value of robotic technology and they have made it a national priority we need to adopt similar industrial priorities in this and other important areas of manufacturing in conclusion general motors would ask the committee to focus on the following first the creation of a cross agency forum with a charter to align large scale manufacturing driv key technologies by industry and government second sufficient funding to allow the united states to compete with efforts in other countries and third reframing the goals and scope of advance manufacturing in the national labs from the point where the technology metrics are matched for the product to the point where high volume production is possible general motors welcomes initiatives like these as well as government public private and cross send us free partnerships fills technology development and early commercialization thank you for the opportunity to testify today i look forward to your questions sours your russia for going to chairman gordon ranking member hall and distinguished members of the committee thank you for inviting me to testify today my name is len sours i am the vice president for global sustainability at the proct and gamble company idly p and g s overall program in this area the engine manufacturers and markets a broad range of consumer products beauty health and wellness and home care products in the u s and globally we have operate in the u s for more than one hundred seventy years as a major american manufacturer we are fully committed to innovate and invest in the u s while our business is robust much of our future growth is tied to serving the world's consumers ninety five and our business has a multiplier effect supporting one point five million jobs in our u s and global supply chain and another one hundred thousand jobs in our go to market distribution and merchandise or network b m g has historically viewed sustainability as largely a corporate responsibility as a large multinational company we believe being socially and environmentally responsible are simply the right things to do however more recently there has been greater attention placed on sustainability by consumers governments and n g o s due to this greater attention we believe that sustainability can move beyond just being a responsibility to also being an opportunity to build our business to leverage this opportunity we recently developed a renewed program in environmental sustainability with strategies and goals that are focused in two areas improving the environmental profile of our products and improving the environmental profile of our operations please let me make a few comments on both starting first with our products in order to improve the environmental profile of their products a consumer products company must clearly understand their consumer relative to sustainability we find that only a small percentage of consumers are willing to accept tradeoffs such as an increase in price or decreasing performance in order to purchase a product that claims to be environmentally sustainable we find that the vast majority of consumers over seventy percent will buy a sustainable product but only of all their other needs of cost and performance are met the challenge for p m g is to develop products that enable consumers to be sustainable but for which there are no tradeoffs and this represents a huge challenge for r and d community an example of one such product which i brought today that we recently developed and is on the market is tied coldwater which is a laundry detergent specially designed to provide the same performance in cold water that consumers see in hot or cold the environmental benefits of such a project are enormous at every household in the us that use hot or cold these hot water today switch to cold water for laundry the energy savings would be seventy to ninety billion kilowatt hours per year which is three percent of the nation's total household energy it would reduce carbon dioxide emissions by thirty four million metric tons which is about seven percent of the u s is kyoto target this is just one example of a sustainable product we have developed and we have committed to develop and market at least fifty billion dollars in sales of these products like this over the next several years innovation is critical to accomplishing this and our other business goals as such we have invested over two billion dollars in r and d annually we have twenty four innovation centers on four continents with ever nine thousand people in our r and d facility over one thousand ph d s represent more than one hundred twenty scientific disciplines and hold over thirty five thousand patents globally the need to continue challenges we face in our product innovation an operational improvements we have identified five areas of opportunity where the federal government can be helpful first the government needs to drive research in the area of renewable energy to develop more cost effective alternatives in a grid that can deliver the renewable energy to manufacturers second the america competes act needs to be reauthorized which will lead to the creation of new markets and technolog i would like to thank you mr chairman and ranking member hall for your prior support of this program third there is a need to continue to focus on stem education and training the skills are needed so that we can attract and build the best and brightest u workforce there is a need to increase the collaborative of government industry innovation through the national labs p and g has a successful partnership with los alamos national lab where a comprehensive approach was developed to reduce the cost of our quickness sailors in operations and finally the best way to preserve and create u s manufacturing jobs and promote innovation in the u s is true sound and predictable policies legislation regulation that foster a competitive manufacturing environment innovation cannot move forward without a science based framework thank you again for the opportunity to testify today and share with you the importance of sustainable innovation at procter and gamble  you're speaking up about i don't think your microphone is over you b m c is a growth oriented global chemicals company dedicated to innovative solutions to everyday needs our company was built on a model of growth through innovation while promoting social good we are dedicated to sustainability over half of our raw materials are derived from renewable sources in our nation's history federal government programs for scientific research and development have yielded the seeds of tremendous advances in the private sector we must now refocus our research efforts to the most important and promising areas of growth and invest in transitioning the of these technologies into private sector manufacturing growth and competitiveness fr hundred four to the present as a rapidly growing manufacture we have experienced the challenges that come with growth and implemented workable solutions this journey of ours gives us a fresh and real perspective on the issues facing us many fact the chemical manufacturing industry is one of the most important sectors of the u s economy the chemical industry employs in excess of eight hundred forty thousand employees with hourly earnings twenty two percent greater than the private sector average when you include indirect employment the industr responsible for more than five point four million jobs despite its importance of the economy the chemical industry continues to face challenges efficiency improving me factoring technologies are spreading across the globe rapidly reducing the productivity advantage that once compensated for higher costs in the us lower barriers to the flow of investment capital has led to newer more efficient manufacturing plant investments to be installed elsewhere in the world the gaps to our leadership are shrinking innovation must lead the pathway to the future if we are to maintain our leadership position the u s chemical industry is in need of growth revival we believe that two of the most important challenges facing our nation today are how to increase the number of good high paying jobs and how to reduce the dependence of our nation on foreign oil we believe the increased development in britain and production of chemicals based on renewable sources is a viable and sustainable pathway to further both of these objectives while the same time reducing our nation's carbon footprint replacement of crude oil by renewable feed for the chemical supply chain is a real and now possibility by virtue of their higher value downstream chemicals from renewable sources can rapidly reach lead to the reduction of imported crude oil and increased job creation however the renewa chemicals industry faces challenges to get off the ground and these challenges lie primarily in the development and commercialization phase we believe that there should be three critical pillars to the development of a sustainable renewable chemicals industry first we must promote the development of new chemical products based on renewable sources sustainable efforts by private industry in this type of research should be supported by the government through funding research programmes for renewable chemicals specifically introducing jumpstarting legislature that calls for  placing petroleum best based chemicals uncertain and uses and funding the development of pragmatic standard methodology to support the growth of these products second we must promote investment in transforming existing facilities to produce from renewable chemicals t access to commercialization phase investment capital especially for small and medium sized enterprises is a significant challenge is to the early stages of transformation we can promote this transformation through grants for transformation of existing facilities for manufacture of nubile chemicals incentives for private investment in the production of renewable chemicals supporting small and medium sized enterprises through capital access programs and through the development of a one stop shopping approach to government support programs and elevating renewable chemicals to an important position in the nation's agenda similar to biofuels finally we must maintain and extend our productivity leadership through retrofitting existing facilities with productivity improvement control and measurement systems and improving the access to best practices in manufacturing for small and medium enterprises the government can support these efforts through the national institute of standards and technology by way of funding programs for manufacturers to upgrade productivity improving technologies funding research and new productivities improvement systems and leveraging the existing efforts of the manufacturing extension partnership to assist small and medium sized manufacturers in implementing best practices and productivity i p m c renewable chemicals are a substantial part of our growth strategy we have committed to this strategy because we believe that is a sustainable pathway for manufacturing growth the challenge that we face along with other u s manufacturers is an accelerating the commercialization of these technologies in an uncertain economic environment companies normally take a conservative approach to investment prudent government policies and standards are required to change this mindset efficient government programs supporting the renewable chemicals industry will accelerate the transformation of ideas into increased employment and decreased reliance on foreign oil mr chairman ranking member all members of the committee thank you for those opportunities share our views today i look forward to your questions and now we will hear from dr mark good morning first i want to thank the committee for the opportunity to discuss this critically important subject on behalf of the national nanny manufacturing network i mean to get directly to the heart of the matter innovation is the raw fuel the american economy manufacturing is the engine now though the discussion today is on manufacturing innovation broadly i'm going to use the key example of nano manufacturing to emphasize my points research and development and  exemplifies what we must pursue in twenty first century manufacturing innovation it is the highest of high tech our nation needs to embrace a long term strategy of manufacturing innovation and excellence in manufacturing is the use of new techniques and tools that generate and manipulate nanomaterials for reproducible commercial scale manufacturing nanny manufacturing is emerging today because of the investment the federal government made in the national nano technology initiative we must be strategic now to reap the return on this investment the end and i with this focus on fundamental research and research infrastructure has been a huge success with many exciting nano technology demonstrations some are already in products however making the transition from proof a concept demonstration to full scale manufacturing is not trivial manufacturing brings up  as process development in modeling scale up metrology process control tooling workforce safety and supply chain there have been huge strides in nana manufacturing research and development over the last few years including a few examples on name now processes to make transparent conducting electrodes using carbon nanotubes this replaces indium ten oxide for displays and solar cells during a time when the world supply of india is becoming dramatically scar scale patterning utilization of molecular self assembly for magnetic data storage electronics energy conversion and energy storage applications synthetic processes for making money nanoparticles with designer surfaces impacting many applications from efficient lighting to solar cells to disease diagnostics and therapy and there are many others the companies and nations that figure out how to manufacture products from these recent nano manufacturing innovations will reap the greatest benefits jobs economic security intellectual progress and sustainability and i'd like to address the specific questions posed by the committee the first is on the n s f support of nanny manufacturing following n s f activities are relevant there are four complementary inanna manufacturing research and development centers there is a national nanny manufacturing network which i represent here today which networks the centers together and supports the broader nanny manufacturing community through collaborative activities and information sharing and through its website resource international and there also at the n s f a nanny manufacturing program which administers mainly individual investigator and small team grants there are other programs at the n s f including s b a r s t t r and the nano electronics research initiative that also support any manufacturing research but as a subcomponent only the n s f many manufacturing programs are currently funded at a level of twenty two million dollars of that from the and i this low level severely lim speed that such activities could have on the nation's competitiveness competitiveness and economy what else should be done strengthening the activities to build a robust manufacturing were workforce this is at all levels but especially at the technical community college level another is to strengthen any manufacturing research development and education by adding this support for university industry manufacturing testbeds and pilot projects the close involvement of the industry and in identifying fundamental research target it is critical we also need more activities based on twenty first century manufacturing research in general and we also need to strengthen the activities of the national nanny manufacturing network through facilities staff and scope in terms of the federal government there's there's not currently enough u s activity in process development combined with tool and instrumentation development designing and building future generations of scalable manufacturing tools enable us to get our return on investment roll to roll manufacturing to the chip base in any manufacturing and others are low hanging fruit there's not enough support for nano informatics there should be a stronger emphasis on standards the standards development and in terms of the industry role i would have to say that in the end and i the industry has played a important role the semiconductor industry the chemical industry the forest and paper industry have all provided valuable input now the industrial research institute and its member companies are working to try and working to try to develop a program with the n s f for industry inspired fundamental research in terms of the nanotechnology strands transition effectively to manufacturers this is occurred in some but in not in all cases one barrier to successful technology transition is the cultural mismatch between the fundamental between the priorities between fundamental research is manufacturing experts lastly in terms of record nation supporting manufacturing innovation overall should be a federal priority for the federal government in conclusion to leverage resources effectively the federal government should consider the creation of a serious inter agency initiative focused on manufacturing innovation as i have already emphasized several times a vibrant national manufacturing enterprise system rich in innovation requires a culture in which industry academia and government work closely technologies but i do i do want to sound sound a few warnings today when it comes to our economy where are we going and why are we in this hand basket we want to make things in the us and create jobs but mired in recession what is the national government's role in manufacturing a more robust manufacturing economy first we must avoid fostering a declaration of dependence on the part of america's most crucial front here industries second we must avoid having the markets having the government while the market rose were the knowledge and ideas are too widely dispersed for that the need to deregulate this economy shouts at us and i'll say a little bit about that in a few moments basically you don't need to tell the grass to grow you just need to take the rock off it america's real wealth is yet to be created but fulfill that optimism requires recognizing the limitations of politically driven r and d overly aggressive taxpayer funding of science in manufacturing research can be incompatible with lightly regulated future for one federal science fosters conflicts over public access to data the merits of basic versus applied research government versus industry science and intellectual property disputes for another politics has trouble with trade offs when will it be nanotech or biotech or fuel cells in the hydrogen economy or robotics or bioengineered gills so we can live in the ocean meanwhile the science not created by the political redirection of resources remains on scene it wasn't the power to tax and dispense that made the u s leapfrog the world's economies in only one hundred years so simply a warning subsidies can mean sub prime tech policy for many reasons number one government steering can create artificial booms number two government funding comes with strings attached number three a political failure can overwhelm market failure and basic research number for politicians can't choose rationally present company excepted of course the latest concedes yesterday's f c c national broadband plan which in a way is cap and trade for telecom number five taxpayer funding sometimes wrongly views wrongly fosters a view of technology as a zero sum global race but commerce and trade are not like war moreover subsidies don't alter the ratio of g d p spent on research and development number six taxpayer funding can create a glut of the wrong kinds of technology graduates number seven taxpayer funding creates pressures for poor intellectual property outcomes like too much compulsory licensing number eight taxpayer funding can undermine safety because on discovery of even the riskiest science is unlikely but market disciplines like liability and insurance need to evolve alongside so what do we do well doing something is more than just spending money to compete act may pull together a few billion dollars for a lot of very worthy projects but the real gains come if we liberate to stimulate if we work on separating state and economics first of oil picking technological favorites rather than trying to improve speeds by picking the particular r and d horses to run around the racetrack improve the business and regulatory environment so all can go faster and lead jockeys keep more of their earnings second allow free trade in skilled labor bright foreign workers want to stay in the u s and create jobs after graduating in or that's a better way to address the global competitiveness issue sir to avoid safety regulation that makes us less safe m fronts here technologies like nanotech make our environment far cleaner emphasizing the hazards of these new technologies overlooks the hazards of stagnation fourth liberalise capital markets post enron sarbanes oxley regulation as distressed smaller companies severely exempt firms with smaller market capitalizations fifth privatized during the ninety's it was proposed that commercial aspects of federal labs be offered to the industries they benefit or by allowing employees research employees to buy them out six award prizes rather than grants which is something that's in the compete act and should be explored more sevenths liberalize the infrastructure supporting american commerce in manufacturing tearing down the regulatory silos that artificially separate our great network industries like electricity and telecom transportation has enormous potential for creating wealth in the u s eights relax predatory and anti consumer anti trust markets require competition but sometimes collusion is merely a partial merger instead of a full one in other words constraining productive firms in ways the market never intended hobbles entire industry sectors and undermines the wealth creation itself at times finally deal with regulation generally sixty agencies issue four thousand regulations a year costing over a trillion dollars and some seventy thousand federal register pages so implemented bipartisan regulatory reduction commission sunset regulations have congressional approval for controversial rules more flexibility for smaller businesses points of order for unfunded mandates and a basic regulatory report card on the state of regulation that accompanies the federal budget i'll close there and i thank the chair for your attention thank you mr cruz as i had mentioned earlier but for the members that just come in we are expecting to have eleven o'clock which means that we'll probably be leaving at eleven fifteen or so so  for that reason i'm going to be stricter own the five minute rule so that we can try to get through and not impose on the witnesses to have to stay and also since i made earlier statement i'm going to waive my right for questions are wait till later and call on dr baird and thank the chairman i think distinguished panel mr chairman i think this is a critical issue and i commend you one of the things i'm most impressed with the initiative of your various organizations you know especially the  chemical industry particularly the product consumer products the work you're doing and creating jobs creating new products g m as well and an attack that are environmentally friendly i think you deserve a tremendous amount of  credit i'm very intrigued by this issue mr twellman and of an interagency approach you know we tend to silo a little bit and we hear a lot about this on this committee we've got n s f and then i sort of the basic research and then how do innovation side but we're not as strong on that linking that innovation to the actual manufacturing that's going to create the long term jobs expand on that theme if you would what else do we need to do to make this more efficient dr toman and then any others  but i can say from where i sit that has been a great benefit to the field because we're aware of what's going on in nist deal with the d o d n s f and other agencies with regards to nanny manufacturing and we see to be very productive you feel we've got some of that happening already in the inner agency work on the nanotech initiative dr smethurst hours are chakravarthy i think i mentioned there's a number of successful collaboration's but they're kind of like islands of excellence  such as the nasa robot initiatives such as some of the work that we've done at m e l i think the ability if you have a cross agency forum not just one that created papers but one that created a strategy and have people who are engaged from both academia the government and the systems perspective both from small and large business get a strategy get a roadmap and start plugging in the technologies to do that because i'm going to quote the wall where there is no vision the people perish and i think i'll just continue the thought of p and g has benefited greatly from the relationships we've had with some of the national labs and the relationships we have the department of energy but we stumble upon these opportunities there really isn't a transparency of what is available and who was willing to work with the industry except for you know i could see it in some sort of inner agency approach like that helpful in providing that transparency doc trying to concur with doctors my ability to create across agency approach that also takes feedback from both small and medium enterprise and large enterprise is very critical as you see we have excellent technological programs that are federally funded we have large enterprises that have both the financial ability as well as the expertise to commercialize and you have small and medium enterprises that have the willingness and entrepreneurialism to take risks being able to bring all three of them together is a very critical challenge but a very critical opportunity for our country i should say dr talk about he's got to delightful children in the back room they're wonderful children one of there was an article at harvard business review that i bring up a lot in this committee and it was about maybe five months ago now about how we can to do the innovation here and then offshore at the manufacturing and then ultimately the manufacturing drives the innovation elsewhere and we lose our lead what can we do to reduce that i think the first step is involving the entire manufacturing economy in feedback when it comes to federal research you touch upon a very sensitive point if you remember our steel industry that is exactly what happened we were conquered with our own technology built on our own soil we don't want to see that happen again the ability to create the feedback and input it needs to be a dynamic process between industry and federally funded research to have a continuously the world is changing our response must be dynamic if we can have an agency across agency approach that we just talked about along with a industry forum committee roundtable that provides continuous feedback on its approach and its and its programs i think would be much better off thank you dr baird and mr figured is recognized  ago about how this administration's r and d investments will keep america competitive however there are many factors other then that play into our competitiveness in the world and what particular laws  but that's basically outside my spine the ability to comment i would say in terms of laws maybe if we go to charters rather than laws and talk about master some of the national labs what you have is a charter that focuses on technology right and that's if you had a scale from one to ten it focuses one to three what we really need to do is expand that charter from three to six and do for example what germany does with the front hoffer institutes and technology from where the concept of the product is ready to we are addressing manufacturing issues so you can supply stuff and volume rates because that's when you're going to make the economic and you're also going to make the environmental impact so it is about stretching have charter rather than a lot in the context of money factoring technology and that to sours and again the specifics are outside my specific area of knowledge but just in generality again i think we find ourselves more in so much uncertainty and it's really beyond certainty that causes problems a lack of predictability and you can just see a whole host of regulations today where we live in on certainty already tax credit health care those kinds of things and i think for us to be most  regulatory compliance in the u s the cost associated with it as mr chairman brought up to be in his opening statement is significant cost the chemical industry and by its very virtue it pulls capital dollars from other areas investment especially innovation secondly the cap and trade has i was very concerned as we enter into a new era in environmentalist  responsibilities we have to be very careful not to increase the transaction costs associated with doing so thank you then dr smith in your testimony you talk about vehicle electrification and they domestic manufacturing needs to support deployment do you see a need for more infrastructure capacity to support electric vehicles absolutely i think want to stay in colleagues here talked about the answer structure on the grid and that's essentially if we're going to develop a reasonable percentage of electric and extended range electric vehicles you've got to have an infrastructure to plug them into so that that's very very important ok sours and i think you you answered part of this but in your testimony you meant mentioned that you're come company says the goal for innovation to have at least fifty percent of all initiatives so that least one significant external partner and so what consumer relative to consumer products then go through the innovation product process to develop those products to meet those needs we are open to partner with anybody that is able to bring forward ideas that help us accomplish that goal so we work with small need enterprises will work with governments national labs anyone that is able to come forward we have a website our connecting develop web site where we point out what our needs are relative to innovation and then we ask have come originally from government research and there obviously is too much at risk and some basic research to think that it can all be probably funded but i am intrigued by the idea of  mentioned the idea of process as encouraging an entrepreneurial type of effort to we are going to dictate the technology we're not going to pick who does it but if you can go do this we'll give you a prize money itself what do each if you think about the process or the limits of the values how can they fit into the overall government effort the role of government encouraging innovation manufacturing i think prizes are really interesting  mechanism and i think it depends very much on the type of technology you're trying to drive if you look at advanced manufacturing and you could go from anything from virtual dime to rail where you're working on the sensors are you working on production lines if you're focused on something that's more capital intensive i would say prices would be least effective if you're focused on something that's perhaps virtual that could open up maybe basically a person with a laptop trying to figure out a solution then i think it's  technical solution to a system on the time of this driving there are maybe a hundred different sensors and detectors that had to be integrated so he could understand how the vehicle could move on its own only a company or a partnership as it was in this case of through their funding to develop the disruptive technologies and also plays a great role role in education which is of the stem program as received today i think the r and d investment by our government is really what sets us apart from from others if i think about first of all i agree that the government's role is very important in research i can't talk specifically on prizes but the concept of a competition i'll talk a little bit about the f b i our i think it's a truly valuable program  it targets high risk innovators and provides both the capital and very much importantly the credibility the expertly need for private funding in addition the competitive nature not only helps pick the best prospects but readies the recipients by requiring them to think through their projects in a comprehensive manner creating better quality projects for research the government's role in funding research both federally funded and through the private industry is very critical for the this issue in the first place if that's just quickly i think i think prizes do have some merit the only point i would make about it is you do have to be careful about when whether the and you're trying to achieve something that ought to be a governmental role or or or private sector role if you need to come up with a new homeland security technology much better gasman you know any kind of major technology like that that involves america's ins political ends and security and privacy make a lot of sense they also make a lot of sense in transitional ways of finding new ways of dealing with government investment in high tech areas like nanotech and other areas space ship one was a prize phenomenon or parts of it were same with the way netflix always tries to upgrade its it's search system and things like that there are numerous ways that they could be used as an alternative you just have to be careful and make sure that the end is the right one that is something that you mr cruz and dr avers recognized thank you mr chairman i think the panel when i was elected to congress some years ago i never expected how much time i would have to be spending on manufacturing issues and largely because i come from manufacturing state first of all but secondly there was a little interest in the congress on manufacturing and innovation there's sort of this allows a fair attitude well their business they got money they can do the research they'll develop the products  c neglecting a very important wrong and i've often compared the issue in manufacturing with farming and agriculture and the role that the government played in that starting with the land gran universities and going forward and most people don't realize the money that we spend still today on helping farming and i find it ironic that in an agriculture because of mechanization and so forth back in the eighteen eighties something like eighty percent of our economy was in farming and the employees were in farming today it's closer to two percent of the employees are employed in farming and yet we continue to spend about four hundred million dollars a year of as a federal government on the cost of extension service and i'm certainly not opposed to very useful that's a way for the government to get it research results quickly to the farming community and i was amazed at michigan michigan state university develop something new in the labs one year the next year the farmers are using it in the fields we don't have anything like that and in manufacturing i have spent far more time that should have been necessary on the manufacturing extension partnership and it's been like pulling teeth every year to try to get one hundred million dollars of the congress and the president for manufacturing extension partnership which combined with s p i our you know all of those things working together really are very effective this year we have we're spending four hundred million dollars on a part of the economy that has two percent of the employees and i have to struggle to get one hundred million dollars to go towards the part of the economy that has fifteen percent of the workforce namely manufacturing we just don't have our head screwed on right here in the congress and i think in the nation as to the importance of manufacturing and the importance of the government role in innovation agree that's mr miller and his comments this idea that somehow if we interfere with manufacturing were interfering with the private interfere with agriculture or not it doesn't make sense so i apologize for giving a sermon but this is you know now that i'm retiring i can act like an angry old man and say why didn't you listen to me all these years but that's that's one of our big problems i do have a question and that is related to this how can how can we more effectively compete as a nation and what is the government's role in this competing against low wage nations you know that's a major problem we face today and i don't see a clear path there and i'm wondering if any of you have any really good vit wisdom on how we can best proceed there i'll just make a short comments in the new technologies that are promising we have to keep them here we have to set up the manufacturing base for those here and we have to do it post haste and how do we do it we need to educate  e quickly so that becomes a manufacturing base for example in nanotechnology where there's this demand for all these workers and they don't exist in the us well where where does that where did the ideas go they go overseas the other thing we have to do is create an environment for shared risk and loosen the capital markets by any any mechanism possible so that so that all factors can help those companies grow here you know the capital market i hope is a trans transitional problem we're having right now that you're absolutely right i have a lot of manufacturers my district they have firm orders and they cannot borrow the money to build the product but i  appreciate the comment you made viz of the other countries but we really have to concentrate on that in the government's role is to high risk high reward research but also to drive me out of my mind every year i've fought to make the r d tax credit permanent because the bean counters in your companies don't want to take a chance that it won't be renewed and so it's not really a factor in this thinking if we make it permanent it's it's it's there for you and i think it should be increased testimony about the certainly the importance in the auto industry of the auto suppliers network where a great deal of innovation occurs and certainly the manufacturing process critical for general motors and all of the big three if you could maybe of flesh out a little bit as to what we should be thinking about at the federal level to be helping those auto suppliers who right now are as you know hanging on by their fingernails given where the economic situation is right now and their budgets are strong and for their ability to do the kind of research and development necessary for them to be can continue to be competitive particularly with foreign suppliers that may be looking to supply to our domestic automakers what what should we be doing i think two things the suppliers is saying now part o a huge part of their relationship with the new u s car which is the united states consul for automotive research and that's been a big factor of it and developing technologies i think a lot of times when people talk about developing technologies in the automotive sector they really think you're developing it for the o e m s we talked about some of the work that we did at nest to develop standards that generate into smaller companies there's a lot of technology that we can develop that we will never be using as our core technology i think it's a mite providing forums for the big companies to work with the small companies but again those forums they have to be resourced they can't just be paper generating strategy writing forums and i think that's really essential but i do y government agencies get that cross agency forum and  is there a model that we could use well basically we talk a lot about cross agency consortia i'm just reminding that whatever you do with compete act in the investment it's still a small fraction of the resources you need to be freed up to get the economy going that's what i think supported point out you've got to deregulate you've got to make it so that foreign workers who come here are going to you can stay it's a number of things like that liberalizing infrastructure so tech and telecom and those those kinds of things can move along but in addition to considering cross agency partnerships also think about what institutions it is in society that are the source of wealth creation and we know that is markets in the ability of capitalism to bring together people who don't know one another to put together to create great wealth so look at cross industry consortia to look at what impact the antitrust laws might have on preventing american companies from taking free enterprise to the next level so to speak to create to compete on a global level concern that the inputs to manufacturing are not always subject to the marketplace and yet the output although some public policy folks would would like to dictate what those products are ultimately it's still up to the consumer do i want to talk a little bit about the environmental health and safety program component of the national nanotechnology initiative i know it's getting a twenty percent increase in fiscal year eleven two thousand and eleven after receiving a substantial increase in fiscal year two thousand and ten as well how do these increases impact funding for the and i would say equally important six program component areas one of which is nano manufacturing well with regards  manufacturing it hasn't affected it at all and in fact i think they're complimentary that worker safety consumer safety environmental safety is a natural twin to nanny manufacturing development and here's a case where in terms of the funding levels if you can if you look at two thousand and nine through the proposed two thousand and eleven both of these have grown commensurately and that's how it should be so i think there's good progress in both areas ok mr cruz would you wish to comm marketplace and yet the output is i mean that seems to be not sustainable not necessarily environmentally but economically sustainable and how do we get around that perhaps and then also how do we well i don't know in terms of i think it's important to restructure look at look at this in terms of if you're going to invest federally or there are different ways of doing it maybe tax payers could have some selection some choice in what technologies they want to foster it's just that you run into a real problem when trying to select technologies to invest and what that will do in terms of how that steers the market and where that's going to take things that's what you have to be really careful about so while you look at general research also look at other ways that also foster general research that the private sector i know no that the federal government has that role to play i see it as specifically in defense areas and things of that sort but please i urge you to look at ways that you can do with antitrust law liberalizing infrastructure looking at what it is that motivates science scientists to do basic research in the first place it is true that basic research can get captured and there's always that market failure argument that the private sector doesn't do enough but it turns out that when you have unfettered global markets companies don't always capture their own intellectual property their own resources but they capture it from other firms are going to to retain scientists you have to pay them more and you can create problems and disruptions in that by trying to direct things federer of his you just have to be very very very careful about about the federal i called it you know the federal government steering while the market rose you have to be very careful about where you do that but at the same time you do it  make sure that you're liberalizing in other areas so that if there's a way the private sector can take on that role you let that happen because that the smith is all right if we go to his down camp or thank you miss doc i'm sorry but could you maybe have one real good question i will really how you would see that where it might be how it's how you could see the federal government's role in terms of helping our small manufacturers small medium small and medium enterprises lack the resources to evaluate the programs that can help them  innovate these businesses leaders and owners are wearing many hats every day i speak from experience when i task of identifying these programs from the government is very daunting i believe that a one stop shopping approach would be developed using the input of agencies that are responsible for the programs as well as the council of small and medium business leaders the inputs of the various constituencies will help sharf sharpen the efficacy of such a program this crossed cross experience team would need to evaluate which agencies have the best access to the small medium enterprises and specific industries in order to find the best home for the one stop shop in other words the ability of the chemical industry to access government programs may be house a different function than the ability of a nanotechnology industry company or an automotive industry company the key is how can we provide single points of contact as low in the chain as possible that have the access to the small and medium enterprise so basically you see this as putting on the industry there would be one stop shop for that industry not one stop for all manufacturing growth going forward for a common yes on the one i cannot shopping and it's a great idea but i think it should be expanded to big plus small and just give an example if you're looking at electrification of the vehicle and you're working on technology support to support that if you're a small organization and at the one stop shopping if i'm a national lab and my charter for example is small business then i will look and say ok there's a lot of welding involved so i may go and look at ultrasonic welding and those people will work small companies to optimize that process if you look if you include large business they look at a systems level approach and they'll say yeah well things are great but you also have to that's in quality systems you also have to invest in something like reversible bonding that's going to put welding out of business and allow us to make  obama has an answer rather than a question and so you want to give your answer quickly thank you very much mr chairman i'd just like to go on the record and i'm sorry i had to rush back to another hearing happened same time but if we're going to have u s manufacturing be competitive head of government does have a role and the most important role is protecting the intellectual property rights of those american businesses that will utilize technology to outcompete foreign  foreign competition unfortunately mr chairman the patent reform legislation that's been going through here for the last few years has the opposite would have the opposite him back and make the theft of intellectual property more li and let me note that we also need to make sure that they have limited research and development dollars that we're able to spend are not then in some way used to set up manufacturing overseas and we shouldn't and i don't think we've taken see group has manufacturing facilities in france and then the and i guess my question is what is it about these countries or what business climate did they created that make them more attractive to c than the united states now let me see if i can answer it other than their low cost labor and dr sauer said that we regulate over here but we overregulate which is probably true and my suggestion there is to do away with the it's really unfortunate we had her today and i don't mean you just respect we've had more what you might call high profile witnesses but we haven't had a panel that has addressed an issue that's been more important to us i think in trying to really save our manufacturing base here in this country we're at a tipping point i think the american competes act can help us greatly and your input will help us do a better a better bill so i thank you for being here the record will remain open for two weeks for additional statements from members and for answers to any follow up questions the committee may ask witnesses and the witnesses excused in the hearing is adjourned thank you