@ITIFdc 

The State of U.S. Advanced Tech Industry 

Competitiveness and What to do

Dr. Robert D. Atkinson

President, ITIF

October 2020

@RobAtkinsonITIF
About ITIF

 The world’s top ranked science and technology think tank

 Formulates and promotes policy solutions that accelerate innovation and 

boost productivity to spur growth, opportunity, and progress

 Focuses on a host of issues at the intersection of technology innovation 

and public policy:

– Innovation processes, policies, and metrics

– Science policy related to economic growth

– Digital technology issues (e.g., e-commerce, e-government, e-health)

– IT and economic productivity

2
U.S. Manufacturing Productivity Growth Stagnating

3

Source: Bureau of Labor Statistics, Major Sector Productivity, Costs, and Employment

-4%

-2%

0%

2%

4%

6%

8%

10%

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Productivity Employment

(Employment Growth In Total Economy Relative to Total Economy; Productivity Growth in Manufacturing Relative to Total Economy)
Many Manufacturing Sectors Growing More Slowly Than GDP

4

21% 25%

40% 44% 45% 49% 54% 58% 59% 65% 65% 66% 67% 68% 68% 68% 73% 73% 74%

83% 85% 85% 86% 90% 94% 96% 96% 101%

114% 116% 120% 122% 125%

169%

0%

20%

40%

60%

80%

100%

120%

140%

160%

180%

Real Manufacturing Value-Added Growth/Real GDP Growth, 1998-2018
Manufacturing Output Growth Distorted by Computer Sector

5

0%

200%

400%

600%

800%

1000%

1200%

1400%

1600%

1800%

 Semiconductor and other electronic component manufacturing Communications equipment manufacturing Computer and peripheral equipment manufacturing

Real Manufacturing Value-Added Growth/Real GDP Growth, 1998-2018
6

-$900

-$800

-$700

-$600

-$500

-$400

-$300

-$200

-$100

$0

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

U.S. Manufacturing Trade Balance (Billions)

Source: U.S. Census Bureau, Exports & Imports by NAICS Commodities

U.S. Manufacturing Trade Balance Worsening
Top 5 Things Countries’ “Industry 4.0” Policies Are Doing

7

1. Recognizing that effective public/private partnerships are critical if countries, or U.S. 

states, are to take advantage of the digital manufacturing revolution.

2. Developing “Digital Manufacturing Maturity Indices” and providing “Self-Benchmarking 

Assessment Tools” for SMEs.

3. Inventorying and describing discrete, specific manufacturing digitalization use cases and 

processes. (e.g., Germany has documented over 300 specific use cases/sample 

instantiations of SME manufacturing digitalization).

4. Launching “pilot fabs” that demonstrate smart manufacturing techniques on active 

production lines. (Iowa/Austria/Germany/Japan/Korea)

5. Providing financial support ($ and tax credits) for manufacturing digitalization and 

helping industry address manufacturing workforce challenges.
Most Manufacturers in Early Stages of the Manufacturing 

Digitalization Journey

8

Source: ITIF/MAPI, “The Manufacturing Evolution: How AI Will Transform Manufacturing & The Workforce of the Future”
U.S. Receives Little Greenfield Manufacturing FDI

9

0.00%

0.20%

0.40%

0.60%

0.80%

1.00%

1.20%

1.40%

2014 2015 2016 2017 2018 2019

Greenfield Manuf Investment as share of Total FDI
U.S. Lags on Robot Adoption

10

Source: International Federation of Robotics, “Robot Density Rises Globally,” news release, February 7, 2018, https://ifr.org/ifr-press-releases/news/robot-density-rises-globally. 

0

100

200

300

400

500

600

700

800

Robots Per 10,000 Manufacturing Workers, 2017
Especially Compared to Expected Robot Adoption Rate

11

Source: ITIF calculations

-100%

-50%

0%

50%

100%

150%

200%

250%
Many Sectors Reduced Their R&D 

12

- 5.00

 0.00

 5.00

 10.00

 15.00

 20.00

 25.00

Change in R&D to Sales Ratio: 2017-2008
Many Firms Invest Less in R&D

13

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

2005-2019
Other Nations Invest More in University Research

14

Source: ITIF Report: University Research Funding: The United States is Behind and Falling, forthcoming (as share of GDP) 

0.0%

0.1%

0.2%

0.3%

0.4%

0.5%

0.6%

0.7%

0.8%

Switzerland Denmark Norway Sweden Austria Finland Australia Germany France Canada Korea United

Kingdom

Taiwan Average United

States

Japan China
Other Nations Have National Innovation Agencies

15

Country Has Articulated a National Innovation 

Strategy?

National Innovation

Agency/Foundation

Year Agency 

Introduced

Brazil Yes Brazil Innovation Agency 1967

China Yes Ministry of Science and Technology 1998

Denmark Yes Danish Agency for Science, Technology, and 

Innovation

2006

Finland Yes Tekes 1983

France Yes OSEO 2005

India Yes National Innovation Foundation 2000

Ireland Yes Forfas 1994

Italy Yes ENEA (National Agency for New Technologies, Energy 

and the Environment)

1999

Japan Yes New Energy and Industrial Technology Development 

Organization (NEDO)

1980

Korea Yes Korea Industrial Technology Foundation 2001

The Netherlands Yes Senter Novem 2004

Norway Yes Innovasjon Norge 2004

Portugal Yes Agência de Inovação 2003

South Africa Yes National Advisory Council on Innovation 2006

Sweden Yes VINNOVA 2001

Taiwan Yes Industrial Technology Research Institute 1973

Thailand Yes National Innovation Agency 2003

United Kingdom Yes Department of Business, Innovation, and Skills 2009

United States Yes N/A N/A

Uruguay Yes National Research and Innovation Agency (ANII) 2008
Other Nations Have More Generous R&D Tax Incentives

16

-5%

0%

5%

10%

15%

20%

25%

30%

35%

40%

Expenditure-based Income-based

Source: Enhanced Tax Incentives for R&D Would Make Americans Richer, ITIF 2020
Other Nations Have More Generous R&D Tax Incentives

17

0.000

0.050

0.100

0.150

0.200

0.250

0.300

0.350

0.400

0.450

Source: ITIF Report: We’re #27!: The United States Lags Far Behind in R&D Tax Incentive Generosity, July 2012 
18

Netherlands: Smart Industry

Belgium: Made Different

Portugal: Industria 4.0

Denmark: M.A.D.E.

Mexico: Industry 4.0 Roadmap

Slovakia: Smart Industry

Wallonia: Marshall 4.0

Industrial Value Chain 

Initiative (IVI) in China 2025

Manufacturing USA

Made Smarter Produktion 2030

Industria 

Conectada 4.0

ABII - Associação Brasileira de 

Internet Industrial

Make in India

Prime Minister’s

Industry 4.0 Taskforce

Made in China 2025

Manufacturing 

Innovation 3.0

Industrie 4.0

Průmysl Industry 4.0

IPAR 4.0

Industrie

4.0

Industrie du Futur

Piano

Industria 4.0

Manufacturing Digitalization Becoming a Priority For Many Nations

Courtesy: Dave Vasko, Rockwell Automation
Trump v. Biden 

19
What Should U.S. Do? Fix the Data/Analysis Problem

20

1. Data Gaps. Productivity performance of SME manufacturers, foreign 

investment overseas by NAICs code, overseas comparative economic 

performance, machinery investment by state, adoption of smart 

manufacturing technologies, etc. 

2. Analysis gaps. Is anyone in federal government analyzing this data 

through a competitiveness lens? 

3. We don’t know or do analysis because we don’t care about 

sectors/technologies. Market decides so government doesn’t need 

capabilities.
What Should the U.S. Do?

21

 Respond to China Standards 2035.

 Reestablish NIST Advanced Technology Program.

 Craft Fed-State TBED Partnership. 

 Expand Manufacturing USA Institutes, but more industry-led, with 

greater diversity of sizes/models.
Can We Respond? 

22
Thank You!

Robert D. Atkinson | ratkinson@itif.org | @RobAtkinsonITIF

@ITIFdc