NIST Economic Analysis Briefs 1 

The Economic Impact of Technology Infrastructure for 

Advanced Manufacturing: An Overview 

Gary Anderson (gary.anderson@nist.gov) 

Technology Partnerships Office, Innovation & Industry Services 

October 2016 

Key Findings 

•	 Conservative estimates indicate that meeting key technical needs would save over $100 billion
 

annually in emerging advanced manufacturing sectors in the US.
 

•	 Barriers to innovation increase the cost of advanced manufacturing R&D, weaken private investment 

incentives, foster proprietary standards that can further distort the market and magnify the role of 

public research institutions. 

•	 Important linkages across technical needs mean that closing select technical gaps - while leaving other 

needs unmet - would fail to allow domestic manufacturers to fully realize economic impact. 

•	 Manufacturing research consortia and technology extension services are needed to meet critical 

technical needs and ensure that small and medium-sized enterprises benefit from advanced 

manufacturing technology. 

Introduction 

The National Institute of Standards and Technology (NIST) aims to develop the capabilities necessary 

to carry out its key role in the Nation’s innovation ecosystem in part by fortifying U.S. advanced 

manufacturing capabilities. Because the Nation’s long-term competitiveness relies on its global 

leadership in advanced manufacturing capabilities, NIST invests in the development and deployment 

of unique tools to support U.S. advanced manufacturing through both its intramural and extramural 

programs. NIST recently contracted a series of independent analyses1,2 to inform its investments. 

These studies identified a suite of technology infrastructure3 needs - needs for a broad base of public 

and quasi-public technologies and technical knowledge. The analysis addresses technical gaps in four 

key advanced manufacturing sectors: additive manufacturing; advanced robotics and automation; 

advanced roll-to-roll manufacturing; and smart manufacturing. Closing these gaps will support the 

research, development, production and diffusion activities of national laboratories, universities and 

firms alike. Conducting extensive original interviews and data collection, identifying the barriers to the 

adoption of advanced manufacturing technology and estimating the impact of eliminating these 

barriers is the unique contribution of this analysis. 

Meeting the critical technology infrastructure needs across these sectors also delivers domestic 

manufacturers important new capabilities. For example, additive manufacturing (AM) technologies 

that make objects and parts by joining ultrathin layers of material layer-by-layer have “great potential 

to enable both sustaining and disruptive innovation.” Next-generation advanced robots will be mobile, 

free to move about their environments and able to safely collaborate with humans. The studies find 

that advanced robotics and automation are potential game-changing technologies for strengthening 

the U.S. manufacturing sector, particularly for small and medium-sized manufacturers (SMEs). 

Similarly, advanced roll-to-roll (R2R) production methods offer the opportunity to merge the precision 

National Institute of Standards and Technology 

Willie May, Under Secretary of Commerce for Standards 1 

and Technology and Director 
 

 

 

 

 

 

and uniformity of the microelectronics industry with the scale and cost structure of high-throughput 

industries such as optical films, printing and textiles. Smart manufacturing processes that use digital 

information to optimize product, factory and supply-chain operations have introduced a vast array of 

new opportunities for increasing efficiency, lowering costs, and improving quality throughout the 

advanced manufacturing sector. 

However, the studies identify technology infrastructure needs - “currently unmet needs for 

measurement science, including metrology and test methods, traceable reference data, and other 

formal knowledge - that limit [advanced manufacturing] technology’s further development and 

adoption, and the ways in which meeting these needs could spur innovation and growth in US 

advanced manufacturing.” Each of the four studies identifies 5 to 10 critical needs. Individual studies 

and the associated NIST Economic Analysis Briefs provide details. 

Table 1: Potential Annual Cost Savings 

Annual Cost Saving ($Billions) Percentage Cost Reduction 

Additive Manufacturing $4.1 18.3 % 

Advanced Robotics and 

Automation 

$40.1 5.3% 

Roll-to-Roll Manufacturing $0.4 14.7% 

Smart Manufacturing $57.4 3.2% 

Findings 

The analyses provide conservative estimates which indicate that meeting key technical needs would 

save over $100 billion annually in emerging advanced manufacturing sectors. Both the total annual 

cost savings and the rate of cost reduction vary across the sectors studied. Meeting the technical needs 

in advanced roll-to-roll and additive manufacturing would lower costs by 15% and 18% respectively. 

Importantly, the estimated benefits are only those directly attributable to closing the identified 

technical gaps rather than the overall benefit of advanced manufacturing technology. The studies 

identify the potential systematic application of robotics and automation as well as smart 

manufacturing throughout the manufacturing sector, which naturally raises the total impact estimates 

relative to technologies with more narrow applicability such as additive and advanced R2R. The 

conservative estimation approach, which is based on current levels of adoption, further lowers 

estimated benefits. Overall, the impact estimates are particularly impressive since they do not include 

benefits that interviewees could not rigorously quantify such as R&D cost savings, transactions cost 

savings, benefits of new and improved products, long term growth and competitiveness benefits of 

advanced manufacturing or other societal benefits. 

The studies identify certain barriers to innovation, caused by market failures, that increase the cost of 

advanced manufacturing R&D, weaken private investment incentives and foster proprietary standards 

that can further distort the market. The stakeholder interviews identify critical uncertainties that 

increase transactions and adoption costs and diminish the incentive of all parties - across entire supply 

chains - to invest in advanced manufacturing technology. Further, the studies provide evidence that 

proprietary standards4 fail to address the underlying barriers to innovation. The analysis demonstrates 

2 
 

 

 

 

 

 

 

 

 

 

 

that when measurement and test methods, interoperability standards, scientific and engineering 

databases are treated as proprietary intellectual assets, firms can use these to create market 

distortions by conveying market power through branding and reputation. Only by meeting needs for 

trusted third-party standards and performance data will adopters “know what they are buying at 

various cost points,” be confident in the performance of innovative materials, products and 

technologies, and fully compensate developers for their research investments. The studies 

consistently point to the trusted “honest broker” role often played by public institutions as vital to 

overcoming such barriers to innovation. These findings highlight the importance of public research 

institutions in meeting the identified technical needs. 

Important linkages across technical needs exist and must be recognized. This increases the importance 

of ensuring needs are met across all categories. For example, high-fidelity computer modeling and 

simulation require advances in measurement science to produce new scientific and engineering 

databases. Consequently, “unbalanced” investment – closing select technical gaps while leaving other 

needs unmet – would likely limit US ability to “fully realize economic impact.” 

Manufacturing research consortia and technology extension services are needed to meet critical 

technical needs and ensure small and medium-sized enterprises benefit from advanced 

manufacturing technology. For example, the studies show that the needs of small and medium 

manufacturing establishments are particularly acute. Small manufacturers noted that they “do not 

have the adequate resources to exhaustively test and validate.” In this environment, trusted and 

publicly available data “could accelerate the introduction of [advanced manufacturing] in existing 

industries, as well as new industries, and open up additional opportunities for small suppliers and 

manufacturers.” Additionally, the studies identified needs for certain pre-competitive technology 

platforms. The analysis concludes that consortia are an import tool for developing critical technology 

platforms that meet industry specifications. Consortia can also address critical interoperability issues 

and “bring the multidisciplinary teams together to solve the analysis problems that would advance 

smart manufacturing.” Consortia and public private partnerships aid the implementation of new 

technology, which can be “as much an organizational and cultural challenge as it is a technical 

challenge.” These partnerships and extension services “could also help connect users with 

developers of advanced manufacturing technologies by creating platforms” to transfer and 

disseminate technology. The study identifies potential new business models and public-private 

partnerships as a potential route to overcome these barriers. 

References 

[1] Anderson G (2013) The Impact of Federally Performed R&D: Twenty Years of Economic Analysis at 

the National Institute of Standards and Technology. 2013 Technology Transfer Society 

Conference. 

[2] Anderson G (2016) The Economic Impact of Technology Infrastructure for Advanced Robotics. 

(NIST, Gaithersburg, MD) NIST Economic Analysis Briefs 2. 

[3] Anderson G (2016) The Economic Impact of Technology Infrastructure for Additive 

Manufacturing. (NIST, Gaithersburg, MD) NIST Economic Analysis Briefs 3. 

[4] Anderson G (2016). The Economic Impact of Technology Infrastructure for Smart Manufacturing. 

(NIST, Gaithersburg, MD) NIST Economic Analysis Briefs 4. 

[5] Anderson G (2016) The Economic Impact of Technology Infrastructure for Advanced Roll-to-Roll 

Manufacturing. (NIST, Gaithersburg, MD) NIST Economic Analysis Briefs 5. 

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[6] Gallaher MP, Oliver ZT, Reith KT and O’Connor AC (2016) Economic Analysis of Technology 

Infrastructure Needs for Advanced Manufacturing: Smart Manufacturing. (NIST, Gaithersburg, 

MD) NIST GCR 16-007. 

[7] Link A Scott J (2011) The theory and practice of public-sector R&D economic impact analysis. 

(NIST, Gaithersburg, MD) Planning Report 11-1. 

https://www.nist.gov/sites/default/files/documents/director/planning/report11-1.pdf. 

[8] Link, AN, Oliver ZT, O’Connor AC (2016). Economic Analysis of Technology Infrastructure Needs 

for Advanced Manufacturing: Advanced Robotics and Automation. (NIST, Gaithersburg, MD) 

NIST GCR 16-005. 

[9] O’Connor AC, Beaulieu TJ Rothrock GD (2016). Economic Analysis of Technology Infrastructure 

Needs for Roll-to-Roll Manufacturing. (NIST, Gaithersburg, MD) NIST GCR 16-008. 

[10] Scott TJ, Beaulieu TJ, Rothrock GD, O’Connor AC (2016). Economic Analysis of Technology 

Infrastructure Needs for Advanced Manufacturing: Additive Manufacturing. (NIST, Gaithersburg, 

MD) NIST GCR 16-006. 

[11] Tassey G (2007) The Technology Imperative. (Edward Elgar, Cheltenham). 

[12] Tassey G (2015) The Economic Nature of Knowledge Embodied in Standards for TechnologyBased Industries. Routledge Handbook of the Economics of Knowledge, eds Antonelli C, Link A 

(Routledge, New York), pp. 189-207. 

1 See Gallaher et al. [6], Link et al. [8] O’Connor et al. [9] and Scott et al. [10]. 2 See Anderson [2], [3], [4] and [5] for findings and overviews of individual studies. 

3 Technology infrastructure includes infratechnologies and technology platforms. Infratechnologies are 

technical tools, such as measurement and test methods, reference materials, scientific and engineering 

databases, process models, and the technical basis for physical and functional interfaces between 

individual components of both cyber and physical systems technologies. Technology platforms are 

precompetitive proofs of concept that demonstrate the potential commercial viability of multiple new or 

improved products, processes, or services. Technology infrastructure shares many common features with 

tangible infrastructure. Namely, it is difficult and even undesirable to exclude potential users and usage of 

the technology infrastructure by a particular organization does not does not preclude others from 

benefiting to much the same extent. See Anderson [1], Link and Scott [7] and Tassey [11] for a richer 

discussion of the public good nature of technology infrastructure. 4 Proprietary standards can include both product and non-product standards such as measurement and 

test methods, interoperability standards, scientific and engineering databases and artifacts such as 

reference materials (infratechnologies). At times, these non-product standards become the technical 

basis for standards developed through voluntary consensus standards developing organizations. However, 

just as market dynamics drive the adoption of de facto product standards so to can market dynamics drive 

the development and adoption of non-products standards. Tassey [12] notes the negative effects on 

economic efficiency of market power conveyed through proprietary product and non-product standards. 

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