Global Manufacturing: Foreign Government Programs Differ in Some Key Respects From Those in the United States
Published: 2013-07-25T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: Over the last decade, the United States lost about one-third of its manufacturing jobs, raising concerns about U.S. manufacturing competitiveness. There may be insights to glean from government policies of similarly-situated countries, which are facing some of the same challenges of increased competition in manufacturing from developing countries.
GAO was asked to identify innovative foreign programs that support manufacturing that may help inform U.S. policy. Specifically, GAO examined (1) government strategies and programs other advanced economies have implemented to approach issues similar to those facing U.S. manufacturing, and (2) the key distinctions between government approaches to support manufacturing in other advanced economies and those in the United States. Based on input from experts and federal officials, and an analysis of manufacturing programs in other advanced countries, GAO selected Canada, Germany, Japan, and South Korea for study. In each country, GAO interviewed program officials and reviewed documents describing their programs. To identify distinctions between foreign and U.S. approaches to supporting manufacturing, GAO researched comparable programs in the United States, and interviewed staff administering those programs.
GAO is not making any recommendations in this report. GAO received only technical comments on this report from federal agencies.
section_title: What GAO Found
paragraphs: The four countries GAO analyzed--Canada, Germany, Japan, and South Korea--offer a varied mix of programs to support their manufacturing sectors. For example, Canada is shifting emphasis from its primary research and development (R&D) tax credit toward direct support to manufacturers to encourage innovation, particularly small- and medium-sized enterprises (SMEs). Germany has established applied institutes and clusters of researchers and manufacturers to conduct R&D in priority areas, as well as a national dual training system that combines classroom study with workplace training, and develops national vocational skills standards and credentials in 350 occupations. Japan has implemented science and technology programs--with a major focus on alternative energy projects--as part of a comprehensive manufacturing strategy. South Korea has substantially expanded investments in R&D, including the development of a network of technoparks--regional innovation centers that provide R&D facilities, business incubation, and education and production assistance to industry.
When compared to the United States, the countries in GAO's study offer some key distinctions in government programs to support the manufacturing sector in the areas of innovation, trade, and training.
While the United States and the other four countries all provide support for innovation and R&D, the foreign programs place greater emphasis on commercialization to help manufacturers bridge the gap between innovative ideas and sales. These include programs that support infrastructure as well as hands-on technical and product development services to firms, and that foster collaboration between manufacturers and researchers. In contrast, the United States relies heavily on competitive funding for R&D projects with commercial potential.
Within trade policy, the United States and the four countries in GAO's study provide similar services, but there are several differences in how they are delivered. For example, the United States is an acknowledged leader in intellectual property protection, but the U.S. government plays a less prominent role than the Japanese government in developing technological standards on industrial products.
A key difference related to training programs pertains to the sustained role of government in coordinating stakeholder input into a national system of vocational skills training and credentialing, which helps provide a supply of skilled workers for manufacturers. This was particularly evident in Germany. In contrast, the United States largely devolves vocational training to states and localities and does not have a national system to issue industry-recognized credentials. However, the U.S. manufacturing industry, with participation from the federal government, has recently launched an effort to establish nationally portable, industry-recognized credentials for the manufacturing sector.
Overall, GAO's analysis shows the broad extent to which four countries who are U.S. competitors are leveraging the public sector to help their manufacturing industries maintain competitiveness in a rapidly changing global economy.

section_title: Letter
paragraphs: Even though certain measures show that the manufacturing sector in the  United States remains competitive worldwide, over the last decade it has  lost over one-third of its workforce. There are concerns that this decline in  employment indicates a loss of international competitiveness as well as  shrinking job opportunities for middle-class workers. Other developed  economies have also faced manufacturing job losses and have had  concerns about manufacturing competitiveness, particularly as China has  claimed a rapidly increasing share of global manufacturing production.  There may be important insights for the United States to glean from the  manufacturing policies and strategies of similarly-situated countries,  which are facing some of the same challenges of increased competition in  manufacturing from developing countries. We were asked to identify  innovative manufacturing programs from other countries that may help  inform U.S. policy. Specifically, we examined the following questions:  1.  What government strategies and programs have other advanced  economies implemented to approach issues similar to those facing  manufacturing in the United States?  2.  What key distinctions exist between policy approaches to support  manufacturing in other advanced economies and those in the United  States?
To identify foreign countries and innovative manufacturing programs that  may help inform U.S. manufacturing policy, we interviewed a range of  manufacturing experts about key manufacturing issues and obtained their  views about which foreign countries had innovative manufacturing  programs. We selected four comparison countries to study—Canada,  Germany, Japan, and South Korea—based on recommendations from  experts, including U.S. officials from the Departments of Commerce  (Commerce) and Labor (Labor), consideration of the countries’ economic  and political similarities to the United States, and information from our  own research of foreign programs that support manufacturing. We then  worked with officials from the U.S. Department of State (State) stationed  in the selected four countries and foreign embassy officials to select  specific programs for our review. We did not attempt to perform a  comprehensive review of manufacturing programs in the four selected  foreign countries, nor did we seek information in all countries about  programs in each of our three key policy categories—innovation, trade,  and training. To learn about our selected foreign programs, we met with  foreign officials administering these programs and reviewed documents  they provided. To identify key distinctions between foreign and U.S.  approaches to manufacturing, we researched comparable programs in  the United States, selected in part based on suggestions from Commerce  and Labor, and interviewed staff administering those programs. We did  not attempt to do a comprehensive review of U.S. manufacturing  programs, nor attempt to assess the effectiveness of any country’s  programs.
This report uses data obtained from large U.S. and international agencies  and from foreign manufacturing agencies. We assessed the reliability of  data from the Bureau of Labor Statistics (BLS), the Bureau of Economic  Analysis, the World Bank, and the Organisation for Economic Co- operation and Development (OECD) by reviewing literature provided by  the organizations regarding their methodology for compiling data,  including measures to ensure data quality and comparability across  countries. We determined that these data were sufficiently reliable for the  purposes of our report. We did not independently attempt to confirm the  reliability of data provided by foreign manufacturing agencies except  where documentary evidence provided by those agencies allowed us to;  we did confirm the accuracy of the figures and our use of them by having  foreign officials review relevant excerpts of the report. We found these  data to be sufficiently reliable for our purposes. For data on export  promotion, we assessed the reliability of data from the World Trade  Organization by reviewing literature provided by that organization  regarding its methodology for compiling data, reviewed the methodology  of an International Trade Administration study that compared and  analyzed foreign countries’ export promotion budget levels, and accessed  the websites of Canadian, German, Japanese, and South Korean export  promotion agencies to obtain the number of countries in which those  countries offered export promotion services; we found the data sufficiently  reliable for our purposes. Appendix I contains additional information about  our scope and methodology.
We conducted this performance audit from March 2012 to July 2013 in  accordance with generally accepted government auditing standards.  Those standards require that we plan and perform the audit to obtain  sufficient, appropriate evidence to provide a reasonable basis for our  findings and conclusions based on our audit objectives. We believe that  the evidence obtained provides a reasonable basis for our findings and  conclusions based on our audit objectives.
subsections: section_title: Background
paragraphs: The U.S. manufacturing sector comprises businesses that are engaged in  the mechanical, physical, or chemical transformation of materials,  substances, or components into new products, including sectors such as  machinery, textiles, apparel, food production, and chemicals. However,  U.S. policy makers have become focused on competing in high-end, or  “advanced manufacturing.” While no consensus definition of advanced  manufacturing exists, it refers generally to the production of scientifically-  and technologically-intensive products, in which the economic value  derives from inputs of knowledge and design more than it reflects  traditional inputs such as labor and materials. Robotics,  nanomanufacturing, and electric vehicles are examples of advanced  manufacturing sub-industries.
Statistics present a mixed picture about the health of U.S. manufacturing,  both relative to the rest of the U.S. economy and to other countries’  manufacturing sectors. According to data from BLS, manufacturing  employment has fallen from 17.6 million workers in 1998 to 11.5 million in  early 2010, a decline of over one-third over a period in which total U.S.  employment grew somewhat. However, the decline in U.S. manufacturing  employment is not a new phenomenon, and a longer-term view shows a  steady decline of manufacturing’s share of all American jobs. As figure 1  shows, the percentage of U.S. nonfarm workers in manufacturing has  dropped steadily since the end of World War II, from about 35 percent in  1945 to about 9 percent in 2012. Since bottoming out in 2010,  manufacturing employment rebounded slowly up to about 12 million  workers at the end of 2012. Also, other advanced economies, such as  Canada, Germany, Japan, and the United Kingdom, suffered large  manufacturing job losses from 1998 to 2011, suggesting that global  economic forces have affected manufacturing employment in addition to  any factors that may be unique to the United States.
Similar to the employment trend, manufacturing has accounted for a  decreasing share of U.S. economic output over the last several decades,  from about 28 percent of U.S. gross domestic product (GDP) in the early  1950’s to a recent low of 11 percent in 2009 (see fig. 2).
Moreover, the decrease in manufacturing’s share of employment and  GDP could reflect increasing worker productivity in manufacturing and the  emergence and growth of other U.S. industries. According to data from  BLS, U.S. manufacturing productivity, measured as output per hour, rose  55.7 percent from 2002 to 2011, exceeded only by the Czech Republic,  South Korea, Singapore, and Taiwan among 19 measured countries.  Furthermore, after contracting in 2008 and 2009, manufacturing  contributed more to the percent change in U.S. GDP than any other  industry group in 2010 and 2012, as well as playing a leading role in  somewhat weaker GDP growth in 2011.
When compared to the manufacturing sectors in other countries, some  statistics show that the United States performs well. Figure 3 shows the  change in manufacturing value-added for Canada, China, Germany,  Japan, South Korea, and the United States from 1998 to 2010, in  constant year 2000 U.S. dollars. The figure shows that China and South  Korea have experienced a rapid increase in manufacturing production  over this period, while U.S. manufacturing value-added has grown about  as fast as that in Japan, Germany, and Canada.
Some manufacturing experts, however, maintain that official statistics  misrepresent the state of U.S. manufacturing because productivity and  value-added statistics do not properly account for the value of imported  inputs in goods manufactured in the United States. As these imports  become cheaper, or as manufacturers shift to lower-cost imported inputs,  the value-added of the resulting manufactured good rises, suggesting  more manufacturing “production,” even though nothing meaningful may  have changed about manufacturing competitiveness. The Information  Technology and Innovation Foundation, an innovation policy think tank,  estimated in a 2012 report that official statistics overstate productivity  growth from 2000-2010 by 122 percent.
Not all experts agree on what role, if any, the government should play in  supporting manufacturing. Economic theory generally suggests that  government intervention into private sector activity is justified by “market  failure”—situations in which the private market under- or over-produces a  good because private interests differ from society’s. Those supportive of  enhancing productivity in manufacturing suggest that government policy  should target the sector in order to remedy market failures that may  hinder innovation—the development and application of new knowledge.  Innovation underpins improvements in the way capital and labor are  combined to create new products and increase productivity. This makes it  critical for the broader economy and particularly important for  manufacturing.
An important element of innovation is research and development (R&D),  the testing and application of new ideas. R&D is seen as a key source of  innovation and its application to new products and technologies. The  private sector, however, faces disincentives to investing in R&D— it may  be expensive, it often fails, willing firms may lack sufficient finances, and  successful R&D may produce benefits that the investing firm cannot  capture — leading to possible underinvestment in R&D and  underproduction in innovation without government support. These  disincentives may be particularly difficult to overcome for small- and  medium-sized enterprises (SME). Though innovation policy can address  market failure across all sectors of the economy, advocates of targeted  innovation policy argue that it may provide particular benefit to  manufacturing. They note that the sector depends on continually creating  new ideas for products and ways to make those products. They also  observe that manufacturing is a significant source of R&D; according to  the National Science Foundation, the sector accounted for 70 percent of  private-sector spending on R&D in the United States in 2008.
In practical terms, to support needed innovation, the government may  intervene through various policies, some of which may have a focus on  the manufacturing sector. These include:
Public support for “basic” R&D in science and engineering, which,  while conducted without specific commercial applications in mind, can  spur private-sector innovation. The public sector may be well-suited to  conducting basic R&D directly, through government scientific  agencies, public universities, and other research institutions, because  it is unlikely that most private firms would conduct this type of general  research without a potentially profitable application in mind.
Public support for private-sector “applied” R&D, research that seeks to  solve practical problems or develop new products and  commercialization. Applied R&D is seen as a key component in  helping innovators overcome the so-called “valley of death”, the  difficult transition between new ideas and commercially viable  manufacturing products or processes. Support for applied R&D could  take various forms:
Subsidies for private investment in R&D, through direct funding or  tax incentives, and assistance with financing for private R&D  projects with commercialization potential, which may overcome  the difficulty some firms may face in obtaining funding from private  financial markets. However, it may be difficult for the government  to figure out which firms merit subsidy because of the lack of  information or foresight into an individual firm’s growth prospects.
Public infrastructure investment that facilitates R&D and  knowledge transfer, such as research laboratories, transportation  investment, and “knowledge” infrastructure such as broadband  telecommunications, the development of measurement techniques  and databases, and the dissemination of technical expertise.  Experts have referred to such widely-accessible infrastructure or  knowledge as the “industrial commons” that provides a base for  innovation and production, and see investment in these commons  as an important source of new ideas for products or processes  and solutions to existing problems.
Public support for innovation clusters — regional concentrations of  large and small companies that develop creative products and  services, along with specialized suppliers, service providers,  universities, and associated institutions. Firms in a cluster may be  able to share knowledge and transact business at lower cost than  if they were far apart, possibly leading to increased innovation.
However, the effectiveness of cluster policy has not been  established; the formation of successful clusters in the United  States, such as California’s Silicon Valley, suggests that  government support for clusters may not be necessary.
For more on nontariff barriers, see GAO, Export-Import Bank, Reaching New Targets  for Environmentally Beneficial Exports Presents Major Challenges for Bank, GAO-10-682  (Washington, D.C.: July 14, 2010); and International Trade: Four Free Trade Agreements  GAO Reviewed Have Resulted in Commercial Benefits, but Challenges on Labor and  Environment Remain, GAO-09-439 (Washington, D.C.: July 2009). manufactured goods represented 86 percent of all U.S. goods  exported and 60 percent of total U.S. exports.
Figure 4 provides a summary of some key types of support that  governments can provide to support innovation, training, and trade, which  can benefit manufacturing and other sectors.
In the United States, the federal government has generally taken the lead  in supporting basic research, providing the economic framework, and  constructing infrastructure. Commerce administers manufacturing  programs through sub-agencies such as the National Institute of  Standards and Technology (NIST), the Economic Development  Administration (EDA), and the International Trade Administration. Other  U.S. agencies support manufacturing as part of their program activities,  including the Department of Defense, the Department of Energy, National  Aeronautics and Space Administration, and the National Science  Foundation. Labor administers training programs for job seekers through  the Employment and Training Administration. In addition, tax breaks such  as the R&D tax credit further benefit manufacturers (although these  provisions do not apply exclusively to manufacturers). States and  localities have the main responsibility for education and also are most  active in promoting regional economic development, including measures  that support innovation. See appendix II for more information on recent  U.S. manufacturing initiatives.
section_title: Other Economically Advanced Countries Have Instituted a Varied Mix of Programs to Address Key Manufacturing Issues in Their Countries
paragraphs: The four countries we analyzed—Canada, Germany, Japan, and South  Korea—take varied approaches to government support for manufacturing,  with each providing a different mix of programs to support their  manufacturing sectors. For example, Canada has started directly  supporting SMEs to encourage innovation. Germany has created  programs for innovation and maintained long-standing programs to  support export promotion and skills training. Recently, Japan’s  manufacturing policies have emphasized alternative energy and the  production and innovation that come from that sector. Japan also  prioritizes providing hands-on assistance to SMEs. South Korea has  substantially expanded investments in R&D to strengthen its  manufacturing sector. Figure 5 presents key manufacturing statistics for  each of these countries and the United States.
Recent trends in the Canadian economy, including the rising value of the  Canadian dollar to near parity with the U.S. dollar and declining  productivity growth, have put pressure on Canada’s manufacturing sector.  In 2010, according to the Canadian government, Canada continued to lag  behind other advanced economies in terms of business innovation  performance despite a high level of federal support for R&D. In response,  Canada’s 2010 budget called for a comprehensive review of all federal  support for R&D. The resulting report—commonly referred to as the  Jenkins report—catalogued a set of 60 R&D programs worth about $5  billion Canadian in fiscal year 2010-2011. The Jenkins report found that  Canada’s support for business innovation was heavily weighted toward  the Scientific Research and Experimental Development (SR&ED) tax  credit, but that the calculation of some SR&ED expenses was highly  complex, which resulted in excessive compliance costs for SMEs in  particular. The report also found that other countries relied less than  Canada on indirect tax incentives to stimulate innovation, and that  Canadian federal policy should provide more effective support to  innovative firms, particularly SMEs, to help them grow and become  competitive. To address these findings, the Jenkins report recommended  simplifying the SR&ED and redeploying the savings from this toward  more direct support to SMEs in order to encourage innovation. To further  expand opportunities for innovation in Canada, the Jenkins report also  recommended that the government provide innovative firms with more  access to venture capital, and make better use of government  procurement by leveraging the government’s substantial purchasing  power to create demand for leading-edge goods, services, and  technologies from Canadian enterprises.
Canada’s 2012 national budget, in turn, contained several changes that  acted on the Jenkins report recommendations. According to Canadian  budget documents, effective 2014, the SR&ED tax credit will be reduced;  the budget of the Industrial Research and Assistance Program, which  employs a national network of technical advisors who work directly with  SMEs to help them grow through the commercialization of innovative  products and services, was increased. The 2012 budget also announced  a new $400 million venture capital fund to support innovative start-up  firms. To address the report’s recommendation on procurement, the  Canadian Innovation Commercialization Program was made permanent  in order to assist SMEs in doing business with the government of  Canada.
Table 1 highlights examples of manufacturing-related programs in  Canada. For further information on Canadian programs included in this  review, see Appendix III.
Despite slow economic growth at the turn of the century and contraction  in 2008-2009, the German economy has grown steadily over recent  years. According to German officials, this growth has been in part a result  of the strength of Germany’s manufacturing sector, which accounts for  about 22 percent of GDP. German officials told us that after the recession  of 2008-2009, manufacturing recovered relatively quickly in part because  of an arrangement between unions, employers, and the government  through which (1) employers reduced their employees’ hours to avoid  layoffs, and (2) the government subsidized a portion of employees’ lost  salaries. According to German officials, this arrangement allowed  businesses to continue to operate through the economic downturn, and  then expand workers’ hours once the economy recovered. A 2012 OECD  report estimates that the agreement may have prevented up to 500,000  layoffs.
To make the most of existing growth potential and open new prospects  for German industry, the German government issued its High Tech  Strategy 2020 in 2006. The strategy guides the specific efforts across  national government agencies and programs. Specifically, it states that in  order for Germany to become a leader in solving global challenges, the  government will need to stimulate R&D in five priority areas: (1) climate  and energy, (2) health and nutrition, (3) mobility, (4) security, and (5)  communication. The German government has, in turn, recently  established several programs to promote innovation in these areas.
The High Tech Strategy 2020 provides a framework for recent programs  that encourage applied research and innovation, particularly in SMEs,  and also for a program that supports business clusters that conduct R&D  in the strategy’s five priority areas. According to German officials, SMEs  are a significant part of the German economy and have long played a role  in German manufacturing. However, the national government has  identified innovation as a challenge across the SME sector. In response,  according to German officials and German government documents, the  German government has in recent years initiated a group of programs  intended to strengthen innovation in SMEs. These programs—all initiated  in 2006 or later—include the following:
The Central Innovation Program for SMEs, which is Germany’s  largest program to support innovation in SMEs, provides grant funding  to pursue innovative ideas that show high potential for  commercialization.
The HighTech Grunderfonds program is a public-private venture  capital fund that invests in innovative start-up companies.
Signo provides federal assistance to SMEs in securing intellectual  property for innovative products and helps SMEs file for patents with  the German Patent and Trademark Office.
According to German officials and German government documents, as  part of its High Tech Strategy, Germany also established the  Spitzencluster program to continue the national emphasis on innovation  by funding business clusters judged through a competitive application  process to be the best, or “leading edge” clusters in the country.
In addition to these more recent programs, according to representatives  of Germany’s Fraunhofer Institutes, skilled Fraunhofer researchers  pursue joint applied R&D projects with businesses that result in  commercializable processes and products. Germany established the  Fraunhofer Institutes, a nationwide network of 60 applied research  facilities with research expert staff, in 1949 as part of efforts to rebuild its  research infrastructure after World War II, according to Fraunhofer  officials. Fraunhofer’s applied research projects include the following  categories of specialization: (1) materials and components, (2)  microelectronics, (3) information and communications technology, (4)  production, (5) light and surfaces, and (6) life sciences. Fraunhofer  officials told us that Fraunhofer Institutes are co-located with universities,  which allows companies access to skilled researchers.
In contrast to Germany’s newer programs to support innovation,  Germany’s main national system to support the export of manufactured  goods has a much longer history of providing support to the  manufacturing sector. According to German officials, Germany is a  leading exporter of manufactured technology goods. German officials also  told us that Germany’s long-established export promotion organization,  the Association of Chambers of Commerce and Industry, brings together  an agency of the national government and all exporting businesses to  share export information. Germany fosters export activities in two main  ways: (1) by selectively establishing partnerships abroad, and (2) by  providing assistance for trade fair attendance and participation in trade  delegations.
In addition to programs in innovation and trade, Germany also maintains  a dual training system, which was established in law in 1970 but has  existed in practice for centuries, according to German officials. German  officials explained that the dual training system—through which German  high school-age students complete apprenticeships in skilled trades—is a  cooperative effort among business, labor, federal and state government  representatives, coordinated by the Federal Institute for Vocational  Education and Training. The Federal Institute for Vocational Education  and Training, an institute of the national government, is responsible for  regularly incorporating stakeholder feedback into the process of creating  and updating skills certification standards. The executive board of the  Federal Institute for Vocational Education and Training includes  representatives from German unions, employers’ associations, federal  agencies, and state governments. Because of this role in bringing  together stakeholders in the skills education process, the Federal Institute  for Vocational Education and Training is often referred to as the  “parliament” of vocational education in Germany.
Table 2 highlights examples of manufacturing-related programs in  Germany. For further information on German programs included in this  review, see Appendix III.
After two decades of economic stagnation and fallout from the 2011  Fukushima earthquake and nuclear disaster, Japan has made efforts to  strengthen its economy—including its manufacturing sector—and improve  its global competitiveness. Japan’s manufacturing sector has been  recognized in the past for its ability to make incremental improvements to  manufactured products—for example, small just-in-time improvements  made specifically for a subsequent phase of the manufacturing process— illustrated by the often-copied lean manufacturing practices that a well- known automobile manufacturer developed over several decades.  Officials from Ministry of Economy, Trade, and Industry (METI), the  country’s main ministry for manufacturing policy, identified genbaryoku— capabilities to find and solve problems in the field—as a unique source of  strength in Japan’s manufacturing industry. According to these officials,  this capability helped Japan to restore its economy quickly after damage  from the earthquake. In the wake of the 2011 Fukushima crisis, many  SMEs went out of business, and global companies, including automobile  manufacturers, faced delays in delivery of inputs and in production,  according to Japanese officials. As a result, METI officials said that the  Japanese government and automobile industry started working to  establish more diverse and reliable supply networks.
In 2007, the Japanese government published a comprehensive  innovation plan: the “Innovation 25” initiative, a long-term strategy for  innovation in engineering, information technology, and other fields by the  year 2025. This initiative established a cabinet-level minister for  innovation and called for several new policies, including: 1) reviewing  regulations to establish an environment that supports innovation, (2)  promoting the use of new technologies in the public sector, and (3)  strengthening activities for international standardization. According to the  Center for Strategic and International Studies, this plan introduced the  concept of an innovation “ecosystem” in Japan, which emphasizes  collaboration among universities, research institutes, the private sector,  and government—similar to clusters—rather than the private sector acting  alone to develop and commercialize innovations.
Japan developed its most recent 5-year Science and Technology Basic  Plan in 2011. This plan is aimed at reconstruction and revival from the  Fukushima disaster and realizing sustainable growth, for example, by  focusing on green innovation. The goal of this Basic Plan is to provide a  concrete plan for implementing Japan’s comprehensive New Growth  Strategy introduced in the same year. As an outgrowth of the third  science and technology plan, the Japanese government initiated several  regional innovation cluster programs to enhance Japan’s  competitiveness. One of these programs, the Industrial Cluster Project, is  composed of groups of local SMEs and venture businesses that use  research obtained from universities and other institutions. One of 18 such  clusters in Japan—the Technology Advanced Metropolitan Area (TAMA)  Association—has over 600 entities, including universities, financial  institutions, local governments, businesses, and industry groups,  according to one TAMA Association official. The TAMA Association  supports local SME manufacturers by matching them with larger  businesses that have complementary needs at the national, regional, and  local levels to improve R&D and commercialization of technology and  products. For example, the TAMA Association connects manufacturers in  need of a particular type of R&D to university researchers with projects in  that field.
In response to the 2011 Fukushima nuclear disaster, Japan has  intertwined energy issues—especially alternative energy projects—in its  manufacturing policy. The national government has laid out detailed  alternative energy policies through its 2011 and 2012 comprehensive  Rebirth of Japan strategies. Among other things, the 2011 strategy  outlines support for: (1) adopting renewable energies; (2) developing R&D  hubs consisting of universities, research institutions, and private firms for  industrial development and job creation purposes; and (3) adopting  electric, heat, and other energy supply systems that make use of regional  resources. The 2012 strategy outlines increased R&D for creating  innovative green parts and materials, developing green vehicles, and  improving battery performance. METI established the Next Generation  Vehicle (NGV) Program, a key alternative energy initiative. According to  METI officials, NGV’s strategy takes an integrated approach involving six  components: (1) development and production of the vehicles; (2) battery  R&D and technology; (3) rare metal and resource recycling systems; (4)  installation and infrastructure of chargers; (5) vehicle systems; and (6)  international standards for battery performance and safety evaluation  methods—and associated roadmaps. According to METI officials, NGV  identifies diffusion targets for alternative-fuel vehicles and the  development of related technologies. For example, one of its goals is to  develop advanced batteries for automobiles that will also have other  uses, such as powering homes. As part of the NGV Program, Japan’s  government, in conjunction with industrial leaders, seeks to influence  international technological standards for related manufacturing  accessories, including battery performance and chargers, for which  various countries are developing competing models. The government  also funds alternative energy projects, as well as other R&D intensive  private-sector projects with commercial potential, through the New Energy  and Industrial Technology Development Organization (NEDO). According  to NEDO officials, NEDO connects university researchers and industry to  collaborate on joint research, such as R&D in support of batteries and  hydrogen fuel cells for electric vehicles.
The Rebirth of Japan strategies also include significant support for  strengthening SMEs. For example, the 2011 strategy outlines overcoming  the “valley of death”—the gap between innovative ideas and  commercializable production—by promoting cooperation between  industry, academia, and the government; encouraging joint R&D projects;  and supporting overseas business for SMEs. The government also  encourages SME technological innovation by offering technical and  business support through a national network of Public Industrial  Technology Research Institutes—known as Kohsetsushi centers.  According to Japanese officials, these centers provide SME  manufacturers with a range of services including technology guidance;  technical assistance and training; networking; testing, analysis, and  instrumentation; and access to open laboratories and test beds, and they  typically offer technical consultation services free of charge. Kohsetsushi  Centers support Japanese SME manufacturers in adopting emerging  technologies, including nanotechnology and robotics. For example, the  Tokyo Metropolitan Industrial Technology Research Institute (TIRI) serves  about a quarter of Tokyo’s 40,000 manufacturers across three locations,  primarily by providing services, information, and testing equipment and  facilities to SMEs, according to TIRI officials.
In addition, the Kawasaki Business Incubation Center rents offices and  lab space to SMEs and entrepreneurs and provides some free services,  such as introductions to potential partners and funding entities and  support for completing applications for government subsidies or loans and  establishing a registered corporation, according to Kawasaki Business  Incubation Center officials. The center is located in close proximity to a  number of larger companies and research institutes, which incubation  officials told us helps facilitate collaboration. The center also provides  training sessions on topics including machine operation to help  companies acquire necessary technical skills. Having these resources  nearby helps companies to move from basic R&D to practical applications  in commercial products, and eventually to mass production since many of  the tools needed for designing and manufacturing are in one place,  according to Kawasaki City officials.
Table 3 highlights examples of manufacturing-related programs in Japan.  For further information on Japanese programs included in this review, see  Appendix III.
Within the last 50 years, South Korea has shifted from receiving U.S.  development assistance to becoming an OECD aid donor to other  countries. According to the United States Agency for International  Development, it is the only country to make this shift to date. Between  1999 and 2011, South Korean manufacturing output (in current U.S.  dollars) has almost tripled. This rise has coincided with an increase in its  investment in R&D, from approximately 2.2 percent of GDP in 1999 to  approximately 3.4 percent in 2008, according to OECD statistics. As table  4 shows, South Korea’s percentage increase in R&D spending over this  period exceeded that of the other countries in our study, and as of 2009,  South Korea spent more on R&D as a percentage of GDP than the other  countries.
The South Korean government has invested in various research  institutes, including those that are state-financed, university-based, and  private-sector driven. According to Commerce officials in South Korea,  every government ministry invests in several research institutes. For  example, the Ministry of Science, ICT, and Future Planning supports  approximately 25 research institutes, including the Electronics and  Telecommunications Research Institute (ETRI), according to ETRI  officials. ETRI is a global information technology research institute and  the largest government-funded research institute in South Korea—whose  work is partly responsible for putting South Korea on the map as a leader  in information and communications technology, such as smart phones  and mobile computing.
As part of South Korea’s 2009 growth strategy, the national government  has emphasized its plans to train SMEs, promote R&D, and expand  green energy technology development. For example, the government  provides testing and standardization equipment and labs that SMEs  would not otherwise be able to access through various research  institutes, according to officials from the Ministry of Trade, Industry, and  Energy (formerly known as the Ministry of Knowledge Economy)—the  main ministry for manufacturing policy. South Korea also plans to  encourage innovation and help make South Korea a world leader in green  technology by turning green energy industries—such as renewables and  smart grids—into export industries, and encouraging current industries to  become green according to government documents.According to  national government officials responsible for coordinating South Korea’s  green growth policies, most green growth programs fit within South  Korea’s larger manufacturing strategy, and the policy mechanisms that  have been used have been integrated into or build on existing programs.  These officials stated that existing tax subsidies for emerging industries,  including information technology and biotechnology, have recently been  extended to green areas. They pointed out that the government provides  a R&D tax credit for private firms using green technology: 20 percent of  total investment on green technology for large companies, and 30 percent  for SMEs.
South Korea has also emphasized the development of a network of  technoparks—regional innovation centers that provide manufacturing  assets, R&D facilities, business incubation, and education and production  assistance to industry—to encourage growth and development  throughout the country. assists with R&D by encouraging collaboration between industry,  academia, research institutes, and local government, according to  Daejeon officials. Specifically, it connects SMEs to researchers or  universities working on related research. It also supports technology   For example, Daejeon Technopark (Daejeon)
This initiative is, in part, intended to help fuel development outside of Seoul, where most  economic activity is centered. sharing by providing SMEs access to technology, along with the support  and expertise of the park’s professional staff.
Table 5 highlights examples of manufacturing-related programs in South  Korea. For further information on South Korean programs included in this  review, see Appendix III.
section_title: Foreign Manufacturing Programs Offer Some Key Contrasts to Those in the United States
paragraphs: When compared to the United States, the countries in our study offer  some key distinctions in government programs to support the  manufacturing sector. Based on our comparison of selected U.S.  programs, the foreign countries place a stronger emphasis on innovation  programs that support commercialization, especially through programs  that provide technical support and product development and support for  infrastructure and clusters. In contrast, the United States spends a  relatively high amount on competitive funding for R&D projects with  commercial potential. Within trade policy, countries in our study all  provide similar services but there are several differences in how they are  delivered. For example, the United States is an acknowledged leader in  intellectual property protection, but the United States government plays a  less prominent role than Japan in developing technological standards.  Regarding training programs, Germany’s national government has a long  history of managing a dual training system to provide graduates with  vocational training and nationally recognized credentials and help ensure  a supply of skilled manufacturing workers. The United States does not  have a comparable program on such a scale. However, some federal,  local, and private sector entities in the United States are taking steps to  provide work-based and academic learning tailored to manufacturers’  needs and develop a framework for nationally portable credentials. In  assessing differences among countries in program funding levels, it is  important to keep in mind that higher relative funding levels may not  necessarily produce better outcomes.
subsections: section_title: Commercialization Is a Key Goal of Foreign Innovation Programs
paragraphs: While the United States and the four countries we studied all provide  support for innovation and R&D, Canada, Germany, Japan, and South  Korea have made commercialization a central goal of their innovation  programs. Each of the four foreign countries has taken a multi-pronged  approach to spur innovation and help manufacturers bridge the “valley of  death” between concept and market. The programs they implement to  achieve these goals place a particular emphasis on bringing SMEs into  the innovation process. Innovation programs abroad incorporate three  broad strategies: (1) providing technical support and product development  for client firms, especially SMEs; (2) fostering collaboration between  manufacturers and researchers, as well as between small and large  manufacturers; and (3) providing competitive grants for private-sector  R&D efforts with commercial potential. While the United States offers  many similar types of programs, the programs we identified offer  somewhat less extensive support for technical support and product  development than those in some foreign countries, but relatively high  funding for R&D grants.
Canada, Germany, and Japan have set up national networks of centers  that provide a wide range of hands-on technical and business support  services to manufacturing firms, especially SMEs. The focus of many of  these programs suggests that they see SMEs as a rich potential source of  innovation that market barriers, such as the financial risks of conducting  R&D, might impede without government support. For example, Japan’s  Tokyo Metropolitan Industrial Research Institute (TIRI), one center among  the national Kohsetsushi network of 182 centers, offers a wide array of  services and facilities to SMEs, including testing services, laboratories for  product development, information on international technical standards,  and intellectual property support. TIRI also offers collaborative research  partners for SMEs to engage in R&D for product and technology  development. Germany’s Fraunhofer Institutes also operate an extensive  network of nationwide centers—serving both SMEs and large  manufacturers—that offer university-affiliated research expertise to  clients. According to Fraunhofer officials, product and technology  commercialization are central objectives of their centers. Canada’s  Industrial Research Assistance Program (IRAP), that country’s national  SME support network, emphasizes the role of expert technical advisers in  helping clients commercialize their products through expertise with R&D,  networking, and business strategy.
The United States has a comparable program in the Hollings  Manufacturing Extension Partnership (MEP) network of technical support  centers aimed at SMEs, which is administered by Commerce’s NIST.  MEP operates a national network of 60 centers to provide support to SME  manufacturers, focusing on helping manufacturers in five key areas: (1)  technology acceleration, (2) supplier development, (3) sustainability, (4)  workforce, and (5) continuous improvement. Specifically, MEP centers  enter into contracts with companies to deliver technical assistance to  improve their manufacturing processes and productivity, expand capacity,  adopt new technologies, utilize best management practices, and  accelerate company growth. However, MEP officials with whom we spoke  said that MEP centers offer a more limited focus on commercialization,  and do not typically offer testing equipment or widespread expertise in  product commercialization. Instead, MEP may connect client firms to third  parties offering specific services.
As table 6 shows, Canada, Germany, and Japan invest more money and  resources in their technical support programs than the United States does  in MEP. According to NIST officials, MEP receives about $100 million in  government funding, and two-thirds of its revenues comes from other  sources such as client fees, states, or other partner resources. Canada’s  IRAP, in comparison, had funding of $143 million (U.S.) in 2011-12, with  an expanded budget of $257.6 million for 2012-13, a much higher  investment relative to the size of the economy or the manufacturing  sector than the United States. Further, according to IRAP officials, it  provides its client services for free. MEP’s technical staff number  approximately 1,300, a much larger number than IRAP, but Japan’s and  Germany’s programs exceed the MEP in funding and the number of  technical staff.
Canada, Germany, Japan, and South Korea also encourage  manufacturing commercialization through programs that facilitate  collaboration between manufacturers and researchers. Specifically,  several foreign programs we analyzed support collaboration by providing  access to facilities and funding for business clusters—almost a literal  implementation of investment in the industrial “commons” —with  programs that have been in operation longer than those in the United  States. Japan’s Kawasaki-region business incubation centers provide  office space, research laboratories and testing facilities. South Korea’s  Daedeok Innopolis consists of universities, research institutes,  government and government-invested institutions, corporate research  institutes and venture corporations. These programs may encourage  opportunities for applied R&D and product development not only through  access to facilities, but also through interaction among companies in  close physical proximity to each other. According to program officials,  Japan’s TAMA Association, one site among 18 in the country’s Industrial  Cluster project, and South Korea’s Daedeok Innopolis help SMEs match  technologies they develop with larger companies that may be able to  apply these technologies to products they make, or processes for making  them, which may increase technology dissemination. Germany’s  Spitzencluster program has encouraged cluster formation by providing  funding to clusters judged to be among the country’s best, or “leading  edge”; the program has awarded three rounds of funding of up to  approximately $257 million per round to 15 total selected clusters.  Canada offers manufacturers access to research facilities to conduct  R&D in various scientific fields through its National Research Council.
In the United States, the federal government has recently begun to  increase support for clusters. The Small Business Administration (SBA)  Regional Innovation Cluster Initiative, a U.S. federal government cluster  program piloted in 2010, has funded 10 existing U.S. clusters, with 7  clusters receiving funding of $2.7 million in FY 2012, according to SBA.  SBA’s 1-year evaluation of the initiative showed positive results, including  over two-thirds of participating businesses reporting development of a  new product, and over half commercializing new technology. In 2011,  several federal partners, led by the Economic Development  Administration, funded the Jobs and Innovation Accelerator Challenge  (JIAC), the first interagency cluster initiative. JIAC provided $37 million to  20 existing clusters. Later in 2011, $9 million was awarded to 13 clusters  in rural areas. In 2012, the 3rd JIAC awarded $20.2 million to 10 existing  clusters focusing on Advanced Manufacturing.
Table 7 provides a comparison of spending across countries on cluster  support programs.
Another way countries support commercialization is through competitive  funding programs that evaluate and fund private manufacturing R&D  projects with commercial potential. Japan’s New Energy and Industrial  Technology Development Organization (NEDO) was established in 1980  to promote the development of new energy technologies but has since  broadened its scope to fund industrial R&D projects. NEDO officials said  that a typical project they fund would have a budget of $12.5 million for  five years. NEDO’s overall budget for 2012 was approximately $1.6  billion. Germany funds R&D through the Central Innovation Program for  SMEs, which focuses on SMEs and business-related research  establishments cooperating with them. The program funds up to half of a  business’s costs for technical support, technology transfer, training, and  other activities in the development of a new product or process, and has  government funding of about $643 million per year. The Canadian  Innovation Commercialization Program (CICP), with funding of  approximately $32 million (U.S.) per year, is a federal program that helps  companies bridge the pre-commercialization gap for their innovative  goods and services, in part by testing innovative goods and services  within the Canadian government before taking them to the marketplace.
The United States devotes a large amount of money to competitively- awarded R&D funding relative to other countries we studied. SBA  administers two large funding programs through the Small Business  Innovation Research (SBIR) and Small Business Technology Transfer  (STTR) programs. The funds for the SBIR program are provided by  federal agencies with an extramural budget of at least $100 million for  research or R&D, and for STTR by agencies with extramural research or  R&D budgets of at least $1 billion; SBA oversees the programs and the  efforts of these agencies. According to SBA officials, the SBIR and STTR  programs had combined budgets of approximately $2.5 billion in 2012 to  fund awards in successive phases, designed to promote technological  innovation and economic growth within small businesses. Generally, the  agencies participating in the SBIR and STTR programs offer up to  $150,000 to awardees for an initial 6-month period of performance, and  those applicants who receive a subsequent phase award typically receive  up to $1 million for a 2–year period of performance. SBA officials said that  projects are often evaluated for potential commercial applications to the  evaluating agency itself, such as the Department of Defense, as opposed  to potential demand for the product from the private sector (although this  varies by agency). This aspect of SBIR/STTR takes a similar approach to  Canada’s CICP in that it uses government procurement as a means for  potentially introducing innovative products into the larger market. Table 8  compares funding for some countries’ R&D grant programs.
In each of the countries we studied, trade policy is an important part of  manufacturing policy, and each country’s approach shares commonalities  with the others. Every country we studied—including the United States— focuses on export promotion, harmonization of standards, and protection  of intellectual property rights. Canadian, German, Japanese, South  Korean, and U.S. export promotion programs offer help in market  identification and development. However, there are some differences. For  example, in Japan, efforts to promote and harmonize product standards  are supported by the government in conjunction with industrial leaders,  but in the United States, they are led by the private sector in most  cases. All five countries also provide information to help businesses  establish or protect intellectual property rights as a way to encourage  innovation and help ensure that manufactured goods can be sold abroad.
According to the World Trade Organization, in 2011, Canada, Germany,  Japan, South Korea, and the United States were among the world’s  largest exporters of manufactured goods—accounting for about $3.7  trillion in manufactured exports (or about 32 percent of the global export   These countries generally offer similar types of  value in this category). export promotion services to domestic businesses, including assistance  for participation in trade fairs, participation in trade missions, data and  market analytics, and services targeted towards SMEs. However, there  are some differences in how they provide these services. For example:
According to Canada’s Trade Commissioner Service officials, the  Trade Commissioner Service manages the Export USA program,  which helps Canadian SMEs understand the specific legal  fundamentals of exporting to the United States, Canada’s largest  trading partner.
According to State and Commercial Service officials at the U.S.  embassy in Berlin, Germany’s trade fair system is key to German  manufacturers’ success because it helps create awareness of global  trends in different sectors, and showcases Germany as a place to do  business.
International Trade and Tariff Data, in the World Trade Organization’s International  Trade and Market Access Data online (includes the ‘manufactures’ sector in the ‘exports’  trade flow category), accessed June 19, 2013, http://www.wto.org.
According to TIRI officials, Japan’s Metropolitan Technical Support  Network for Export Products—a cooperative initiative of nine  prefecture-based research institutes—offers consultation and  information on international product standards to SMEs for export  products, as well as testing to determine compliance with those  standards.
According to officials from South Korea’s Korea Trade-Investment  Promotion Agency, 99 Korea Business Centers around the world can  be used as SME branch offices. The Korea Trade-Investment  Promotion Agency also manages logistics centers—operated with  UPS or DHL—to facilitate Korean firms’ distribution operations  overseas.
Canada, Germany, Japan, South Korea, and the United States also differ  in the amount of resources they provide for export promotion and the  number of locations that their export promotion efforts reach. For  example, according to a recent U.S. International Trade Administration  study, while all of these countries employ expert staff abroad to assist  with the exporting process, the total number of staff varies somewhat,  with the United States and Japan employing the fewest export promotion  personnel (see table 9).
Similarly, although the amount of export promotion funding does not vary  greatly across the countries in our study—from $226 to $381 million—the  United States spends less on export promotion per $1000 of GDP and  per $1000 of exports than many other similarly-situated countries,  including Canada, Japan, and South Korea (see Table 10).
Further, the four other countries in our review have a single agency  primarily responsible for implementing export promotion, whereas the  United States has several. For example, in the United States, the Trade  Promotion Coordinating Committee (TPCC), an interagency task force,  includes 20 agencies that participate in export promotion. Of the 20 TPCC  agencies, seven are considered core agencies. In contrast, Canada’s  Trade Commissioner Service, Germany’s Association of Chambers of  Commerce and Industry, and South Korea’s Korea Trade-Investment  Promotion Agency implement export promotion programs in their  respective countries. We previously reported that Commerce’s Foreign  Commercial Service activities align with relevant National Export Initiative  trade promotion priorities, but that in an environment of limited resources,  systematic use of economic, performance and activity data could help  allocate resources to achieve its goals more efficiently and effectively.
Although the United States and Japan both view international standards  as an important component of manufacturing policy, they have different  mechanisms for setting voluntary standards on industrial products. In the  United States, the government primarily coordinates standards on  industrial products through the private sector, whereas Japan’s national  government plays a more active role in setting and enforcing standards.
According to documents from the Japanese Industrial Standards  Committee (JISC), a committee of up to 30 knowledgeable experts  comprised of members from the national government, private sector,  industry associations, and academia, METI administers the national  standards system by drafting and enforcing standards-related laws and  regulations. According to the committee, four additional government  ministries have the ability to set standards with input from the committee.  Japan’s Next Generation Vehicle program illustrates the government’s  active role in trying to influence international technical standards for  manufacturing. According to NIST officials, the South Korean government  also plays an active role in trying to influence international technical  standards for manufacturing through standards as well as conformity  assessment requirements.
We did not review mechanisms for setting standards on industrial products in Canada  or Germany because these countries’ practices did not meet our selection criteria. enforce them, according to NIST and industry officials. According to NIST  officials, hundreds of private sector organizations, including professional  societies, trade associations, testing and certifying organizations, and  industry consortia develop standards through an open, consensus-based  process. Among other things, NIST coordinates the use of private sector  standards by federal agencies, states, and local governments to avoid the  development of duplicative standards. In addition, NIST scientists and  engineers work with the private sector to develop standards that are  based on sound science and ensure that the standards are supported by  effective measurements, test methods, and appropriate conformity  assessment systems.
We did not identify any key differences between the four foreign countries  and the United States with regard to protecting intellectual property rights.  All of the foreign countries we studied promote R&D to create intellectual  property and support manufacturers by protecting intellectual property  rights through various mechanisms. See appendix III for details on how  various programs support intellectual property rights. The United States is  an acknowledged global leader in the creation of intellectual property, and  has generally advocated strong intellectual property protection.
section_title: Germany’s Sustained Commitment to Vocational Training Helps Provide a Supply of Skilled Manufacturing Workers
paragraphs: Germany’s national government has maintained a substantial  commitment to a dual training system, which helps provide a supply of  skilled workers for the manufacturing sector. In particular, Germany’s  system has a long history of building public-private partnerships to  develop curriculum and standards and providing graduates with  nationally-recognized, portable credentials. While not on the same scale  as the German dual training system, some federal and local entities in the  United States are taking steps to provide a combination of work-based  and academic learning to meet manufacturers’ needs through public- private partnerships. In addition, Labor, some U.S. states, and Canada’s  federal government have taken steps to encourage participation in their  apprenticeship programs to train workers in the skilled trades needed by  manufacturers. While the United States does not have a national system  to issue industry-recognized credentials, the manufacturing industry, with  participation from the federal government, has recently started moving in  this direction.
Germany’s dual training system facilitates broad consensus among  stakeholders in business, labor, and education, which in turn creates a  supply of workers with skills needed in the manufacturing sector. The  national government enforces the dual training system’s regulations and  has coordinated with industry, union, and state government stakeholders  to develop skill standards in 350 occupations. One agency, the Federal  Institute for Vocational Education and Training, is responsible for  conducting education and labor market research, facilitating regular  stakeholder coordination among public agencies and private industry  associations on needed skills, and managing changes to the system’s  standards. The Federal Institute for Vocational Education and Training  was established in 1970 and, given its central role in bringing  stakeholders together, its board is referred to as the “parliament” of  vocational education. Some experts note that this unified approach and  cooperative relationship among the various stakeholders are strengths of  this system, and representatives of German government and industry  cited the system as an important support to the manufacturing sector.  Moreover, Germany has a high overall societal acceptance of the need  for the dual training system. In addition, support for training and for the  skilled trades is deeply embedded in German society, and about 55  percent of high school students enter the dual training system each year.
In contrast, the United States and Canada have a more decentralized  system of skills training programs, with management of these programs  largely devolved to states and localities. In the United States, Labor has a  major role in administering a number of federally-funded skills training  programs, including those under the Workforce Investment Act of 1998  (WIA), which largely target dislocated workers and economically  disadvantaged adults and youth. WIA programs are overseen at the  local level by Workforce Investment Boards, committees of local  business, labor, and government representatives, with services provided  through local American Job Centers. Labor also administers a  Registered Apprenticeship Program, which offers assistance in creating  on-the-job training programs in accordance with accepted skills  certification organizations in relevant disciplines. Registered  apprenticeship programs are sponsored on a voluntary basis by individual  employers, employer associations, or labor-employer agreements, and  are federally administered by Labor in 25 states and by state  apprenticeship agencies in 25 states. In addition, the Department of  Education plays a major role in supporting career and technical education  in community colleges and regional and technical centers through the  Carl D. Perkins Career and Technical Education Improvement Act of  2006 (Perkins Act).
Unlike Germany, U.S. officials and experts reported that the United States  does not have widespread societal support for vocational education and  training for the skilled trades, although some federal and local entities are  taking steps to target training to meet manufacturers’ needs through  public-private partnerships. For example, at the federal level, Labor and  the Department of Education are providing $2 billion over 4 years to  community colleges around the country through the Trade Adjustment  Assistance Community College and Career Training initiative. The grants  support partnerships between community colleges and employers to  develop instructional programs for workers dislocated by international  competition that meet specific industry needs, including the  manufacturing industry. At the local level, community and technical  colleges provide skills training under WIA and the Perkins Act, and in  many areas, work closely with employers to develop customized training  in key disciplines where workers are needed. One example of this  customized training is a partnership that the German corporation Siemens  has established with Central Piedmont Community College in North  Carolina in order to create a pipeline of skilled workers for manufacturing  plants located in the area. Participating students work at Siemens while  taking courses in the college’s mechatronics degree program. Siemens  pays each student’s tuition costs, while the participant earns a paycheck  and receives company-specific technical training and hands-on  experience. Our recent report highlighted similar efforts of Workforce  Investment Boards in various locations, including California, Colorado,  Illinois, Kansas and Michigan to build public-private partnerships and  tailor training programs to meet the specific needs of manufacturers.addition, some states in the United States have taken steps to focus on   In  skilled trades needed by manufacturers. For example, according to state  documents, South Carolina’s Personal Pathways to Success system  combines academic training with options for work-based learning in 16  career clusters, including manufacturing.
In Canada, apprenticeship programs are primarily administered by the 13  provincial or territorial governments. According to Canadian officials, in  recognition of the economic need for apprentices and to increase  participation in provincial and territorial apprenticeship programs, the  Canadian government offers incentives for continuing and completing an  apprenticeship within the country’s Red Seal program, which  encompasses 55 trades and includes skills needed in the manufacturing  sector. In addition, these officials noted that the Canadian government  also offers a tax credit for businesses that hire apprentices and a tax  deduction for the purchase of tools by any eligible apprentice. See  Appendix III for more information on Canada’s programs.
Labor defines a credential as a recognition of an individual’s attainment of measurable  technical or occupational skills necessary to obtain employment or advance within an  occupation. aims to provide a unified framework to align skills certifications from  various industry associations with Labor’s Advanced Manufacturing  Competency Model. According to the Manufacturing Institute, the Skills  Certification System is intended to establish a comprehensive set of  nationally portable, industry-recognized credentials to validate the skills  and competencies needed to be productive in any manufacturing  environment. Currently, the Skills Certification System endorses industry  certifications in several areas, including machining and metalworking;  automation; fabrication; mechatronics; and transportation, distribution,  and logistics. While federal and private sector entities are collaborating on  this effort, the more established German system suggests that it will  require a long-term, sustained commitment and coordination between  federal and state authorities to bring such an effort to fruition on a large  scale.
section_title: Concluding Observations
paragraphs: As the United States considers policies to enhance the global  competitiveness of its manufacturing sector, the actions other  economically-advanced countries have taken to improve their competitive  edge in manufacturing are of particular interest. The manufacturing  policies and programs in each of the four countries we examined are  shaped by each country’s unique political, social, cultural, and economic  characteristics and may not be readily applicable to the United States.  However, their manufacturing approaches suggest some key areas that  the United States may wish to consider as it continues to formulate its  manufacturing strategy and programs to carry out that strategy. Each of  the foreign countries took a multi-faceted and hands-on approach to spur  innovation in ways that are intended to lead to commercialization,  suggesting that no one program or mechanism can fully address the  challenge of bridging the gap between innovative ideas and  manufacturing sales. In addition, we noted the sustained government  commitment to managing a national system of vocational skills training  and credentialing that facilitates consensus among business, labor, and  education. This was particularly evident in Germany. The United States  has no corollary, and due to major cultural differences it is unlikely that we  would consider a similar system of the same scale. However, some  recent examples of public-private partnerships established to target  training for the manufacturing sector and develop a set of nationally  portable, industry-recognized credentials show how certain aspects of the  German dual training system might be applied through incremental  actions.
More generally, our analysis of the manufacturing programs in the four  selected countries shows the broad extent to which U.S. competitors are  leveraging the public sector to help their manufacturing industries  maintain competitiveness in a rapidly changing global economy. Their  programs involve a partnership of government and the private sector, with  varying but shared responsibilities for supporting applied R&D and  commercialization efforts; facilities for research, testing and production;  and expertise and services. Many of these programs go beyond a more  traditional government role of setting incentives, establishing regulations,  and providing funding. In the end, the best guide to devising U.S.  manufacturing policy may be to think about how the mix of existing and  proposed federal programs fits into our unique economic context and can  provide the most benefit to the economy at large.
section_title: Agency and Third- Party Comments and Our Evaluation
paragraphs: We sent a draft of this report to Commerce, Labor, and State, and  selected draft report sections to SBA, the Department of Education, and  the Department of Energy. Commerce, Labor, SBA, and Energy provided  technical comments, which we incorporated, as appropriate. State and  Education did not have comments. We also sent draft report sections to  foreign officials to verify information on foreign programs that support  manufacturing, and incorporated technical comments from these officials,  as appropriate.
As agreed with your office, unless you publicly announce its contents  earlier, we plan no further distribution until 30 days after the date of this  letter. At that time, we will send copies to the Secretaries of Commerce,  Labor, and State, appropriate congressional committees, and other  interested parties. In addition, the report is available at no charge on the  GAO website at http://www.gao.gov.
If you or your staff have any questions about this report, please contact  Andrew Sherrill at (202) 512-7215 or SherrillA@gao.gov; or Lawrance  Evans at (202) 512-4802 or EvansL@gao.gov. Contact points for our  Offices of Congressional Relations and Public Affairs may be found on  the last page of this report. GAO staff who made key contributions to this  report are listed in appendix IV.
section_title: Appendix I: Objectives, Scope, and Methodology
paragraphs: Our key objectives for this report ask:  1.  What government strategies and programs have other advanced  economies implemented to approach issues similar to those facing  manufacturing in the United States?  2.  What key distinctions exist between policy approaches to support  manufacturing in other advanced economies and those in the United  States?
We selected four study countries—Canada, Germany, Japan, and South  Korea— and the programs that support manufacturing in each country  based on several factors. Since we focused on “similarly situated”  countries for comparison to the United States, we considered primarily  high-GDP countries that have democratic governments. We contacted  approximately 20 experts whose career involved studying or advocating  for manufacturing policy; these included representatives from industry  associations, labor, academia, think tanks, and trade groups. We  interviewed these experts about key manufacturing issues and obtained  their views about which foreign countries had innovative programs to  support manufacturing. We also asked officials from the Departments of  Labor (Labor) and Commerce (Commerce) to comment on some of the  selected foreign programs recommended by experts. We conducted  additional research on the programs in the countries experts mentioned.  To make our final country selection, we considered factors such as the  number of experts that mentioned a country as a candidate for study and  the number and breadth of programs our research indicated each country  offered.
We then worked with officials from the U.S Department of State (State)  stationed in our selected countries and foreign embassy officials to  finalize programs for our review, based on our research and the  recommendations of the foreign officials. We did not attempt to perform a  comprehensive review of programs that support manufacturing in the four  selected foreign countries, nor did we seek information in all countries  about programs in each of our three key policy categories—innovation,  trade, and training. For example, in some countries, we did not examine  training or trade programs because through expert opinion, input from  U.S. officials, and our literature review, we did not identify programs in  these areas as being particularly informative for U.S. policy.
To obtain specific program information, we traveled to each country to  interview foreign officials overseeing each program. We also analyzed  documents with key program information that these officials provided. We  did not analyze or review foreign laws or regulations, and relied on  program information, including budget information, from sources provided  by foreign agency officials and other sources. We also sent report  excerpts to foreign officials to verify information on the programs and  incorporated technical comments from these officials where appropriate.  Moreover, we did not evaluate the effectiveness of any foreign programs.  Because we did not conduct original analyses, none of the program  descriptions regarding foreign programs in this report should be  considered GAO assessments or evaluations of those programs.
To identify key differences in manufacturing policies between our selected  foreign countries and those in the United States, we synthesized our  analyses of the foreign programs we examined to identify common and  unique features among them. We then researched comparable programs  in the United States, in part based on suggestions from Commerce and  Labor, and interviewed staff at agencies administering those programs.  We did not attempt to conduct a comprehensive review of U.S.  manufacturing policy or programs, nor did we evaluate the effectiveness  of U.S. programs.
This report uses data obtained from large U.S. and international agencies  and from foreign manufacturing agencies. We assessed the reliability of  data from the Bureau of Labor Statistics, the Bureau of Economic  Analysis, World Bank, and Organisation for Economic Co-operation and  Development (OECD) by reviewing literature provided by the  organizations regarding their methodology for compiling data, including  measures to ensure data quality and comparability across countries. We  determined that these data were sufficiently reliable for the purposes of  our report. Regarding data provided by foreign agencies, we did not  independently attempt to confirm provided data except where  documentary evidence provided by those agencies allowed us to do so.  However, we did confirm the accuracy of the figures and our use of them  by having foreign officials review relevant excerpts of the report.found these data to be sufficiently reliable for our purposes.
For data on export promotion, we assessed the reliability of data from the  World Trade Organization by reviewing literature provided by that  organization regarding its methodology for compiling data, including the  use of the international standard system for categorizing exports. We  contacted cognizant Commerce officials with respect to an International  Trade Administration study that compared and analyzed foreign countries’  export promotion budget levels, and with respect to data on the number of  countries where the United States conducts export promotion activities.  We reviewed the steps Commerce officials took in collecting and  analyzing the data, and we found the data to be sufficiently reliable for our  purposes.
We obtained data on the number of countries in which Canada, Germany,  Japan, and South Korea conduct export promotion activities using their  officially released information on their governments’ website. We  confirmed these numbers with cognizant Canadian, German, and South  Korean officials. We were unable to confirm the number of countries in  which Japan conducts export promotion activities with cognizant officials.  We believe these sources are sufficiently reliable for the purpose of our  report.
We conducted this performance audit from March 2012 to July 2013 in  accordance with generally accepted government auditing standards.  Those standards require that we plan and perform the audit to obtain  sufficient, appropriate evidence to provide a reasonable basis for our  findings and conclusions based on our audit objectives. We believe that  the evidence obtained provides a reasonable basis for our findings and  conclusions based on our audit objectives.
section_title: Appendix II: Examples of Recent U.S. Manufacturing Policy Initiatives
paragraphs: In recent years, both Congress and the Administration have taken steps  to help define the goals and broad principles of a U.S. manufacturing  strategy. The America COMPETES Reauthorization Act of 2010 aimed  in part to increase the nation’s R&D investment in science and  engineering research and in science, technology, engineering, and  mathematics education. This law required the establishment of new  programs, including Commerce’s Regional Innovation Program; required  the establishment of a committee involved in STEM education; and  required the establishment of an Advisory Council on Innovation and  Entrepreneurship. In addition, it outlines requirements for various  government agencies relating to improving the competitiveness of the  manufacturing sector in the United States. It also created an interagency  Committee on Technology under the National Science & Technology  Council responsible for planning and coordinating federal programs and  activities in advanced manufacturing. The act also directs Commerce to  (1) analyze taxes, regulations, and the economy; trade and export  policies; workforce issues; and barriers to U.S. competitiveness; and (2)  develop a 10-year innovation and competitiveness strategy. Furthermore,  the America COMPETES Reauthorization Act of 2010 authorized funding  for research through the National Science Foundation, the National  Institute of Standards and Technology (NIST), the Department of Energy,  and Commerce.
Likewise, the Administration has proposed a framework for manufacturing  and various initiatives to spur manufacturing. In 2009, the Administration  put forth “A Framework for Revitalizing American Manufacturing,” which  lays out policies in seven areas: (1) providing workers with the opportunity  to obtain the skills necessary to be highly productive; (2) investing in the  creation of new technologies and business practices; (3) developing  stable and efficient capital markets for business investment; (4) helping  communities and workers transition to a better future; (5) investing in an  advanced transportation infrastructure; (6) ensuring market access and a  level playing field; and (7) improving the general business climate,  especially for manufacturing. The Administration has put forth several  other documents laying out its manufacturing strategy since 2009— including “The National Strategic Plan for Advanced Manufacturing,”  which it published in February 2012 to guide Federal programs and  activities in support of advanced manufacturing R&D in response to the  America COMPETES Reauthorization Act of 2010.
In addition, the Administration has established several manufacturing  initiatives.
First, in 2009, the White House announced the formation of the  President’s Council of Advisors on Science & Technology (PCAST),  an advisory group of the nation’s leading scientists and engineers who  directly advise the President on matters related to U.S.  manufacturing.  In June 2011, the President launched the Advanced Manufacturing  Partnership (AMP), a private-sector-led, national effort that brings  together industry, universities, and the federal government to chart a  course for investing and developing emerging technologies to create  high quality manufacturing jobs and enhance U.S. global  competitiveness.  In December 2011, the Administration established the White House  Office of Manufacturing Policy, which has worked with PCAST and  AMP to coordinate policy to enable innovation.
In March 2012, the President announced the establishment of the  National Network for Manufacturing Innovation (NNMI), one purpose of  which is to close the gap between research and development activities  and the deployment of technological innovations in domestic production  of goods. To accomplish this goal, the NNMI plans to form up to 15  manufacturing innovation institutes around the country to serve as  regional hubs of manufacturing excellence. In August 2012, the National  Additive Manufacturing Innovation Institute (NAMII) was formally  established in Youngstown, Ohio, as the pilot institute under the NNMI  infrastructure. NAMII is a public-private partnership with member  organizations from industry, academia, government, and workforce  development resources, with a goal to transition additive manufacturing  technology to the mainstream U.S. manufacturing sector. Another effort in  collaboration with the NAMII is the Department of Energy’s Manufacturing  Demonstration Facilities, which are collaborative manufacturing  communities that share a common R&D infrastructure. The first facility  was launched at Oak Ridge National Laboratory in January 2012. This  facility will provide equipment, scientists, and engineers to develop new  energy-sector technologies for commercial application. In May, 2013, the  Administration announced $200 million in funding to open three new  manufacturing institutes under the NNMI.
section_title: Appendix III: Examples of Government Programs that Support Manufacturing in Canada, Germany, Japan, and South Korea
paragraphs: The following programs illustrate the ways in which Canada, Germany,  Japan, and South Korea have pursued manufacturing goals through  innovation, training, and trade policies. We did not independently evaluate  these programs. Our descriptions are based on interviews with  knowledgeable officials and review of relevant program documentation.  We analyzed documents with key information that these officials  provided, but did not review or analyze the primary source materials for  such program information. In addition, we did not analyze or review any  foreign laws or regulations. Because we did not conduct original  analyses, none of the program descriptions regarding foreign programs in  this report should be considered GAO assessments or evaluations of  those programs. We also sent report excerpts to foreign officials to verify  information on the programs and incorporated technical comments from  these officials where appropriate.
subsections: section_title: Canada
subsections: section_title: Innovation
subsections: section_title: Accelerated Capital Cost Allowance
paragraphs: The Accelerated Capital Cost Allowance was first introduced in Canada’s  2007 budget. According to Finance Canada officials, the policy allows for  a 50 percent depreciation of new investment in machinery and equipment  in the manufacturing and processing sector. By allowing a faster tax write- off of eligible investments, this measure may help manufacturers remain  competitive in the current global environment. According to Canadian  officials, the policy has been extended until 2015. Representatives of the  Canadian Manufacturers and Exporters—Canada’s major national  association of manufacturers—told us that although they have advocated  that the policy become permanent, this has not been achieved.
Canadian Innovation  Commercialization Program  (CICP)
The Canadian Innovation Commercialization Program (CICP) was  created to bolster innovation in Canada’s business sector and was made  permanent in Canada’s 2012 budget, with $95 million for 3 years starting  in 2013, and $40 million per year thereafter. CICP helps companies  bridge the pre-commercialization gap for their innovative goods and  services in several ways: (1) awarding contracts to entrepreneurs with  pre-commercial innovations, (2) testing and providing feedback to  entrepreneurs on the performance of their goods or services, (3)  providing innovators with the opportunity to enter the marketplace with  new goods and services, and (4) providing information on how to do  business with the Government of Canada to enhance procurement  opportunities. The Canadian Innovation Commercialization Program  targets innovations in the priority areas of environment, safety and  security, health, and enabling technologies (e.g., biotechnology).
According to Canadian officials, Canada’s Scientific Research and  Experimental Development (SR&ED) tax incentive program supports  business research and development.
The SR&ED tax incentive program has two components:  1.  An income tax deduction, which allows immediate expensing of all  eligible expenditures, and;  2.  An investment tax credit with the following characteristics:
The general rate is 20 percent of qualified expenditures carried  out in Canada.
An enhanced rate of 35 percent is provided to small and medium- sized Canadian-controlled private corporations on their first $3  million of eligible expenditures.
Unused credits earned in a year are generally fully refundable for  small and medium-sized Canadian-controlled private corporations  on their first $3 million of current expenditures.
Currently, eligible expenditures include most of the costs that are directly  related to SR&ED, including salary and wages, materials, and overhead,  as well as contracts and capital expenditures (other than most  buildings).The 2012 budget announced that, effective January 1, 2014,  the general rate would be reduced to 15 percent. In addition, the 2012  budget announced that effective the same date, capital expenses (e.g.,  equipment and machinery) would be eliminated from eligible SR&ED  costs. Finance Canada officials estimated $3.6 billion in SR&ED- associated tax expenditures in 2012.
Industrial Research Assistance  Program (IRAP)
Canada’s 2012 budget announced the Canadian government’s intent to  double the funding for the Industrial Research Assistance Program  (IRAP). IRAP—a federally-funded nationwide network of over 200  Industrial Technology Advisors with sector-specific expertise who consult  with SMEs on conducting research and development—had a budget of  $258 million in 2012-2013. IRAP advisors assist SMEs in developing,  adopting, and adapting technologies as well as incorporating them into  competitive products and leading to potential commercialization.  According to IRAP officials, over 80 percent of IRAP clients have 50 or  fewer employees. According to the 2012 IRAP survey, 62 percent of  participating businesses indicated that the program had enhanced their  ability to conduct research and development.
Canada’s five federal regional development organizations are another  source of support for innovation. Each agency covers a specific  geographic area. The Federal Economic Development Agency for  Southern Ontario— the regional development agency that was  established most recently— was provided $1 billion in funds to expend  from 2009-2014 in support of local economic development and  competitiveness. The Federal Economic Development Agency for  Southern Ontario has created programs intended to boost private sector  investment in start-up companies, help SMEs collaborate with colleges  and universities to commercialize new products and services, and  develop new technology. For example:  Investing in Business Innovation. The Investing in Business  Innovation program boosts private sector investment in start-up  businesses and allows for the accelerated development and  introduction to market of new products, processes, and practices. It  also helps angel investor networks and their associations attract new  investment and support the growth of angel investment funds.  Eligible recipients include southern Ontario nonprofit angel investor  networks, nonprofit organizations that represent angel investor  networks, and start-up businesses with fewer than 50 employees who  have an investment agreement with recognized angel and/or venture  capital investors. Eligible activities include product and process  applied research, engineering design, technology development,  product testing, marketing studies, certification, proof of concept,  piloting and demonstration, problem solving, and commercialization of  intellectual property.
Technology Development Program. The Technology Development  Program helps research and innovation organizations, the private  sector, post-secondary institutions, and nonprofit organizations work  together to accelerate the development of technologies that will result  in new market opportunities for southern Ontario businesses. Eligible  recipients include southern Ontario nonprofit organizations, such as  innovation and commercialization organizations, and southern Ontario  post-secondary institutions.
Applied Research and Commercialization Initiative. The Applied  Research and Commercialization Initiative is designed to address the  gap between research and commercialization in southern Ontario by  encouraging collaboration between SMEs with pre-market needs and  post-secondary institutions with applied research expertise. The goal  of the initiative is to accelerate innovation and to improve productivity  and competitiveness for businesses located in southern Ontario.  Eligible applicants include post-secondary institutions, where SMEs  are the primary beneficiary.
Canada also sees the lack of venture capital as a challenge to the  country’s innovation and manufacturing capabilities. To increase the  formation and usage of venture capital and encourage innovation, the  Canadian government proposed $400 million in venture capital funds in  its 2012 budget. The purpose of the venture capital funding is to support  early stage risk capital, and to support the creation of large-scale venture  capital funds led by the private sector.
section_title: Trade
subsections: section_title: Trade Commissioner Service
paragraphs: Canada’s Trade Commissioner Service provides several key export  support services to support manufacturers, including:
Preparation for international markets. Trade Commissioner Service  offices in Canada help exporting businesses determine whether they  are internationally competitive, decide on target markets, collect  market and industry information, and help businesses improve their  international business strategy.
Market intelligence and strategy. Trade Commissioner Service  representatives help businesses determine the level of opportunity  that exists in a particular market, appropriate approaches to the  market and the amount of effort and resources required by providing  up-to-date information on barriers and regulations associated with  entering a specific region, as well as information on upcoming  opportunities or emerging trends. Trade Commissioner Service  provides practical advice in areas such as navigating business and  cultural practices, local representation, market entry strategies and  participation in global value chains.
Provision of qualified contact information. The Trade Commissioner  Service provides exporters with business contacts that include  potential buyers and partners, financial and legal professionals,  technology sources, manufacturers, foreign regulatory authorities, and  foreign investment promotion agencies.
Advice to address market access challenges. The Trade  Commissioner Service can advise on market access problems and  other business challenges including customs clearance and shipping,  unfair business treatment, contract bidding, storage and warehousing,  insurance coverage and claims, and overdue accounts receivable.
According to the Trade Commissioner Service, agency staff provided  these services to over 14,000 clients from April 2011 to March 2012.  Trade Commissioner Service officials told us that many of the clients are  manufacturers.
section_title: Training
subsections: section_title: Red Seal Program
paragraphs: Canada also has some programs that provide a framework for skills  training related to manufacturing. For example, Canada’s Interprovincial  Red Seal Program, established in the 1950s, sets national standards for  certification of excellence in 55 skilled trades, some of which are within  the manufacturing sector. The Red Seal Program provides:
National definition of competency. A national occupational analysis,  developed for each Red Seal trade, identifies all the tasks performed  in the trade and is used as a base document for the development of  interprovincial standard examinations. The provinces and territories  are encouraged to use the analysis for curriculum development.
Endorsement of advanced skills. Through the program, apprentices  who have completed their training and become certified  journeypersons are able to obtain a Red Seal endorsement on their  provincial or territorial Certificates of Qualification and Apprenticeship  by successfully completing an interprovincial Red Seal examination.
The Red Seal Program is administered by the Canadian Council of  Directors of Apprenticeship, a body composed of the Director of  Apprenticeship from each province or territory, and representatives of  Human Resources and Skills Development Canada, a federal agency. In  2009, the council undertook an evaluation of the Red Seal Program, and  determined that increased emphasis on specific, measurable, industry- defined standards and multiple forms of skills assessment would  strengthen Canada’s apprenticeship system.
Canada offers the following financial support to individuals pursuing  certification in Red Seal trades:
Apprenticeship grants. The Apprenticeship Incentive Grant is a  taxable grant of $1,000 per year or level, up to a maximum amount of  $2,000 per person. It is available to registered apprentices once they  have successfully completed their first or second year/level (or  equivalent) of an apprenticeship program in one of the Red Seal  trades. The Apprenticeship Completion Grant is a taxable grant of  $2,000 for registered apprentices who complete their apprenticeship  training and obtain their journeyperson certification in a designated  Red Seal trade.
Cost allowance for tools. In addition to grants to assist with  apprenticeship completion, the Tradesperson’s Tools Deduction is a  federal tax policy that provides employed tradespersons with an  annual deduction of up to $501 to help cover the cost of new tools  necessary to their trade. The deduction applies to eligible tools if the  total cost exceeds $1,096, and the purchase was made by an  employed tradesperson.
section_title: Germany
subsections: section_title: Innovation
subsections: section_title: Fraunhofer Institutes
paragraphs: Germany established the Fraunhofer Institutes, a nationwide network of  60 applied research facilities with expert research staff, in 1949 as part of  its efforts to rebuild Germany’s research infrastructure after World War II,  according to Fraunhofer officials. Today, each Fraunhofer institute  specializes in a particular subject matter. The 60 institutes are divided into  the following categories of specialization: (1) materials and components;  (2) microelectronics; (3) information and communications technology; (4)  production; (5) light and surfaces, and (6) life sciences. Fraunhofer  Institutes are co-located with universities.
According to Fraunhofer officials, in 2012, the Fraunhofer network had a  budget of $2.8 billion. Each individual Fraunhofer Institute’s funding is a  mix of support from national and state government sources and private  sector contracts for research.
Applied research collaboration with the private sector on a contractual  basis. Contracts or requests for work from private enterprises are the  main way the institutes receive specific research tasks. For each  research project, enterprises that have developed a process or  technology for potential commercialization enter into a contract for  applied research services with the Fraunhofer Institute that has the  appropriate subject matter expertise. All Fraunhofer Institutes  measure their performance by the number of contracts and the  amount of revenue generated by contracts with the private sector.
Flexible intellectual property. In some instances, part of intellectual  property can be retained by Fraunhofer, and in some cases,  intellectual property can be shared by a combination of Fraunhofer,  the university, and the company involved. The technology that was  eventually developed into MP3 music files originated in Fraunhofer  research, and Fraunhofer currently holds several related patents.
Germany also supports innovation through various industrial clusters  around the country. The Spitzencluster program, the national  government’s cluster initiative, is intended to strengthen clusters judged  through a competitive application process to be the best clusters in the  country. Spitzencluster competition winners are selected by an  independent jury for demonstrating the ability to pursue strategic  objectives in emerging industries identified in Germany’s High Tech  Strategy 2020. Spitzencluster winners receive up to $51 million over 5  years, and the cluster’s participating entities, including businesses and  universities, provide the remaining operating costs in a 50-50 cost share  arrangement. To date, 15 clusters around the country have received the  Spitzencluster designation and are conducting research in a variety of  areas, including the following:  Information and communication technology. The Cool Silicon cluster  in the region around Dresden develops components and complex  system solutions that significantly reduce the energy consumption of  information and communications technologies systems. The cluster  comprises more than 100 companies and research facilities and is  also linked with the Technical Universities of Dresden and Chemnitz.  In the long term, the cluster aims to become one of the world’s leading  locations for energy efficiency in electronics.
Logistics. In addition to developing North Rhine-Westphalia’s leading  global position in the field of logistics, the EffizienzCluster aims to  establish itself as a center for the innovative design of high-quality  logistics services. There are approximately 120 companies and 11  research institutes working in the cluster. These include the  Fraunhofer Institute for Material Flow and Logistics, the Technical  University of Dortmund, and large and medium-sized enterprises.
Electric car engineering. In the Electric Mobility South-West cluster,  partners from the fields of automotive engineering, energy and supply  engineering, information and communications technologies and  services, as well as the cross-section field production engineering are  working on new concepts for electric mobility. The cluster’s main  projects include the design of battery production systems. Located in  the Karlsruhe-Mannheim-Stuttgart-Ulm region, the cluster links 80 key  players from industry, universities and research institutes,  international companies, and SMEs.
Germany’s High Tech Strategy also emphasizes the importance of  creating more innovation opportunities for SMEs. Germany has  established several programs recently to encourage SME innovation.  These programs include the Central Innovation Program for SMEs, which  connects SMEs directly with technical advisors; the HighTech  Grunderfonds program, which provides venture capital; and the Signo  program, which provides assistance in filing for patent rights.
Technical advisory services. The Central Innovation Program for  SMEs is the German government’s largest program that supports  innovation in SMEs by reducing the technological and economic risks  of R&D projects. The program includes 100 technical advisors that  help SMEs with eligible projects submit grant applications. Eligible  projects are proposals for new products or processes that show high  potential for commercialization, and contain technical risk. SMEs are  matched with public or private nonprofit research institutions to  conduct necessary research and development to explore possible  ways to develop the new product. Initiated in 2009 and currently  planned to continue through 2014, the program has an annual budget  of $643 million and gives out about 4,000-5,000 project grants every  year. Each grant covers 50 percent of the project costs, with the SME  supplying the remaining 50 percent. At the close of each grant period,  SMEs submit a report that details successes, challenges, and lessons  learned in the process of attempting to develop the new product.
Venture capital funding. The HighTech Grunderfonds program is a  public-private venture capital fund that uses its annual budget of $411  million to provide support in amounts up to $643,000 to innovative  start-up companies.
Assistance with filing for patent rights. Signo provides federal  assistance to SMEs in securing intellectual property for innovative  products. The program provides support to SMEs in completing  national and international patent applications. In 2012, the Signo  program had a budget of $22 million.
section_title: Trade
subsections: section_title: Association of Chambers of Commerce and Industry
paragraphs: Germany’s Association of Chambers of Commerce and Industry manages  the country’s largest export promotion effort. The national association  brings together a network of 80 local chambers of commerce, which  represent the interest of all commercial enterprises, with a focus on small  businesses. The Association of Chambers of Commerce and Industry  and its funding agency, the Ministry of Economics and Technology, foster  export activities in two main ways:
Selectively establishing partnerships abroad. To establish partnership  offices in foreign countries, the Association of Chambers of  Commerce and Industry works through Chambers of Commerce  abroad and meets with relevant stakeholders to determine whether  German companies have sufficient interest in establishing an office.  Currently, there are German chambers of commerce in 85 countries  around the world. Annually, the Association of Chambers of  Commerce and Industry has a budget of $219 million to manage the  network of local chambers of commerce in Germany, as well as the  partnership offices worldwide.
Providing assistance for trade fair attendance and participation in  trade delegations. According to German officials, The Ministry of  Economics and Technology provides funding for businesses to  participate in trade fairs around the world. The program supports  SMEs in particular, but larger companies are not excluded from the  program. Annually, assistance is provided for participation in over 200  trade events. The trade fair program has an annual budget of $54  million.
section_title: Training
subsections: section_title: Dual Training System
paragraphs: Germany’s apprenticeship system—also referred to as the dual training  system—provides post-secondary vocational education and training for  students who wish to learn a skilled trade, and has several major  features:
Combined on-the-job training and classroom instruction, according to  nationally defined standards. The program requires a combination of  on-the-job-training and classroom instruction leading to certification in  any of Germany’s 350 nationally recognized occupations. At the  national level, industry associations and government officials  negotiate the standards for certification as skilled in each occupation.  At the state level, classroom instruction is formulated for each  occupation. Through the Federal Institute for Vocational Education  and Training, the national government coordinates with industry  groups to obtain input on the types of skills and training necessary,  and then structures apprenticeships to meet those needs. According  to German officials, this coordination was established by the  Vocational Education Reform Act of 1969 (as amended in 2005). The  executive board of the Federal Institute for Vocational Education and  Training includes representatives from German unions, employers’  associations, federal agencies, and state governments.
Nationally recognized credential. As a result of the coordination at the  national and state levels, the credentials obtained through the  apprenticeship program are recognized by businesses and  jurisdictions across the country.
Public-private cost sharing. Employers pay apprentices a contractually  agreed-upon stipend, with national unions and employer associations  agreeing on the base apprentice wage in each occupation. According  to officials from the Federal Institute for Vocational Education and  Training. German businesses spent about $31 billion on  apprenticeship programs in 2010.
section_title: Japan
subsections: section_title: Innovation
subsections: section_title: Next Generation Vehicle Program
paragraphs: According to Ministry of Economy, Trade, and Industry officials, the initial  impetus for the Next Generation Vehicle (NGV) Program—a component  of its Green Growth strategy—was to reduce carbon dioxide emissions  and high energy prices. More recently, the 2011 Fukushima disaster has  focused attention on the need to reduce reliance on nuclear energy  without increasing imports of petroleum or natural gas.
Under the NGV program, private firms will manufacture the vehicles, but  the Japanese national government plays the following roles:
Setting targets for alternative-fuel vehicle diffusion. The program sets  a target for NGVs to comprise between 20 and 50 percent of  passenger car sales by 2020, and between 50 and 70 percent by  2030. The program also sets a target of 2 million normal chargers and  5,000 quick chargers by 2020.
Providing subsidies to encourage purchase of NGVs. The national  government covered half of the price gap between the cost of an  electric vehicle and that of a gasoline model, up to approximately USD  $12,500 since 2009 for electric vehicles, plug-in hybrid vehicles, and  clean diesel vehicles. It also provided a temporary tax reduction of  between 50 and 75 percent on acquisition tax and tonnage tax. The  national government also subsidizes half the price of installation for  the charging stations.
Establishing international standards for battery performance and  charging systems.influence the setting of international technological standards, among  competing models, for various components of the NGV, including  battery performance and chargers.
Japan’s government is actively seeking to  Japan’s national government works with regional and local governments,  universities, and/ or the private sectors in the following areas:
Conducting R&D for battery technology. The national government  collaborates with universities on related basic R&D, such as a  mechanism to analyze chemical response of batteries. However, for  development of technology that will be commercially available in the  near future, such as research on battery performance, the national  government shares up to two-thirds of the cost with the private sector.
Supporting related infrastructure. As part of its Green Growth  Strategy, the private sector and local governments play a role in  installation and operation of quick chargers. For example, car dealers  offer memberships for quick chargers, and some local municipalities  install quick chargers in their buildings and allow free use. According  to Japanese national government officials, their role may include (1)  developing the infrastructure for these chargers by contracting a  private sector operator to form a network of charging stations; (2)  developing a mechanism to charge users; (3) creating continuity in  charger fees; and (4) ensuring payback to those providing these  charger stations to accommodate the mix of actors and business  models –some charging stations are free, others involve fees—and to  ensure that charging stations are located in critical areas, such as  along popular routes to rural/ resort areas.
According to Japanese national government officials, they plan to  dedicate about 80 percent of the fiscal year 2012 budget to the subsidies  that cover half of the price gap between the cost of an electric vehicle and  that of a gasoline model and for charger installation. The remainder will  fund the development of advanced batteries.
The New Energy and Industrial Technology Development Organization  (NEDO) is Japan’s largest public agency that promotes R&D.promote the development and introduction of new technologies. Its  programs and projects include: (1) promotion of research and  development of energy, environmental and industrial technologies; (2)  development, demonstration and introduction of promising technologies  that private sector enterprises cannot transfer to the practical application  stage by themselves due to the high risk and long development period   It aims to  required; and (3) project management to assist in carrying out private  sector projects.
NEDO typically follows R&D priorities set by Japan’s national  government, but it also works with industry and universities to identify  current trends and needs. It selects participants for its projects through a  public solicitation process. Typically, NEDO connects university  researchers and industry to collaborate on joint research. It may divide a  project into different parts and assign responsibility for each part to a  consortium of companies and/or universities. Research is conducted by  the companies or universities, and project participants retain intellectual   After a project  property, such as patents, resulting from their research. is complete and technologies are developed, project participants are  mainly responsible for commercialization.
NEDO facilitates commercialization by coordinating research undertaken  by the government and researchers and connecting relevant entities with   NEDO, among others, is working  potential users, according to officials. to create a stronger link between R&D spending and profits. According to  NEDO officials, its economic analysis illustrates a positive return on  investment. For example, according to NEDO officials, annual product  sales resulting from 50 outstanding projects have resulted in a return of  seven times the initial investment. However, according to NEDO officials,  they face challenges measuring concrete returns to taxpayers and in  isolating NEDO’s contribution. Therefore, they cannot claim that these  returns are the direct result of their efforts.
NEDO is public management agency; it does not have any research facilities of its own.
According to Japanese government documents, efforts to integrate R&D across  ministries and agencies with extensive collaboration between industry, academia and the  government are part of Japan’s national comprehensive strategy. NEDO has overseas  offices in Beijing, Bangkok, New Delhi, Paris, Washington, D.C., and Silicon Valley. NEDO  officials told us that these offices exist largely to conduct research on trends in other  countries and to create partnership opportunities with foreign research institutes as well as  to maintain and advance Japan’s position as a global leader.
In fiscal year 2012, approximately 90 percent of NEDO’s funding was  used to develop technology for national R&D projects, including new  manufacturing technology, new energy, nanotechnology, and materials,  among others, according to NEDO officials. Less than 3 percent was  used to fund commercialization and practical application activities,  including technology innovation for small businesses. Other funding went  to financial support for young researchers and activities related to the  Kyoto Protocol Mechanisms. According to NEDO officials, NEDO typically  provides funding of up to $12.5 million for 5-year projects.
The Technology Advanced Metropolitan Area (TAMA) Association is a  regional cluster that supports local manufacturers by matching them with  national, regional, and local interests to improve R&D and  commercialization of technology and products. It is one of 18 clusters in  METI’s Industrial Cluster Project, which aims to strengthen over 10,000  regional SMEs and promote industrial clusters throughout Japan. The  TAMA Association is a membership organization with approximately 300  manufacturing companies that focus on advanced technological and  design capabilities or process technologies. In addition, it includes  approximately 300 organizations and individuals that support innovations,  including universities, financial institutions, local governments, and  industry groups. The TAMA Association provides its members with  assistance services in the following areas, among others:
Creation of networks between large and SME manufacturers. The  TAMA Association produces a technical report that includes  summaries of technology for each member company to help connect  SMEs to larger manufacturers seeking the technology in which it  specializes. After viewing the report, the large manufacturers contact  the SMEs to improve existing R&D or produce product samples.  According to one TAMA Association official, 170 SMEs have been  hired for projects by large companies as a result of these activities in  2011.
Promotion of cooperation in R&D between manufacturers and  universities. The association supports R&D to promote cooperation  between manufacturers and universities. For example, a manufacturer  in need of a particular type of R&D would hire the TAMA Association  to connect the company to university researchers conducting R&D in  that field. The TAMA Association also develops a network between  SMEs, financial institutions, and research institutions to help a  company develop a product or technology.
Support for creation of new businesses and technologies. The TAMA  Association relies on a network of about 150 experts, including  consulting engineers and SME specialists, who support the creation of  new businesses and development of new technologies by  manufacturing companies. The TAMA Association helps SMEs apply  for national government grants, and it works with financial institutions  to provide funding for SME projects, according to a TAMA Association  official. In addition, the association provides support to manufacturers  that aim to enter a new field of business or commercialize  technologies, including assistance with formulating business plans  and acquiring business partners.
Development of marketing channels and overseas operations. The  TAMA Association works with experts to cultivate new markets for the  region’s technologies—in part through its overseas branches in South  Korea, China, and Taiwan and its affiliates in Germany, Italy,  Singapore, and the United States—to develop a network and products  that assist manufacturers with formulating marketing strategies. In  addition, TAMA works with SMEs to acquire patents for their  technologies and advise companies on how to protect their intellectual  property rights. According to a TAMA Association official, the  organization has successfully assisted with 500 cases to  commercialize products within the past 15 years.
Securing and fostering human resources. Among other professional  development projects, the TAMA Association accepts personnel to  help other organizations learn how to better support local businesses.  For example, local government or private sector officials may work for  the TAMA Association for a 2-year period.
Japan’s Public Industrial Technology Research Institutes, or Kohsetsushi  Centers, provide Japanese SME manufacturers with a range of services  including technology guidance; technical assistance and training;  networking; testing, analysis, and instrumentation; and access to open  laboratories and test beds. They typically offer technical consultation  services free of charge. Kohsetsushi Centers support Japanese SME  manufacturers in adopting emerging technologies, including  nanotechnology and robotics, among others. According to one  Kohsetsushi official, all centers are geared toward supporting local  industry; they do not specialize in particular industries. The Kohsetsushi  Centers are generally funded and managed by local prefectures but are  operated under the guidance of the Ministry of Economy, Trade, and  Industry. There are more than 180 centers throughout Japan—at least  one in each of Japan’s 47 prefectures—and more than 6,000 staff.
The Tokyo Metropolitan Industrial Technology Research Institute (TIRI) is  one of the three largest Kohsetsushi centers in Japan. With a staff of  about 275, it serves about a quarter of Tokyo’s 40,000 manufacturers  across three locations, primarily by providing services and information to  SMEs, according to one TIRI official. TIRI serves not only SME  manufacturers but SMEs in other industries, as well. In addition, larger  enterprises may use TIRI’s services, but they pay more for some services  than SMEs. It is funded primarily by the Tokyo prefectural government,  but 5 percent of its funding comes from the national government and  another 8 percent from user fees.
TIRI’s main support services include the following:
Technical assistance. TIRI offers technical assistance including  consultations and testing services and certifies test results. TIRI  consultants provide advice and answer inquiries about technical  problems free of charge by telephone or in person. In addition, TIRI  tests products and parts to ensure they conform to industrial  standards and provides non-standard testing upon request. TIRI  conducts approximately 100,000 tests each year and has over 40  pieces of testing equipment for tests including temperature, acoustics,  electromagnetism, humidity, voltage, vibration, impact, corrosion, and  noise tolerance. For example, one TIRI official told us that a vacuum  cleaner manufacturer might use the acoustic testing room to measure  the decibel level of its products, and electronics manufacturers might  test the ability of their products to withstand an electromagnetic shock  (see Figure 4). According to one TIRI official, TIRI typically charges a  nominal fee for testing services, but not for consultation. It also  performs customized measuring and analysis services according to  customer needs.
Product development. TIRI supports product development through  rental laboratory space available 24 hours a day, experimental  facilities and environmental testing equipment for shared use, and  customer development support. TIRI also supports commercialization  by supporting planning and design—such as branding for SME  products—and prototyping of products using 3D printing technology.
R&D. TIRI supports R&D, including basic, joint, and commissioned  research. TIRI plans and implements basic research independently to  develop new technology or to solve various challenges that SMEs  face. The center also conducts joint research with SMEs for product  and technology development. For example, small manufacturers often  send one or two of their staff members to work on Kohsetsushi Center  projects. This provides opportunities for company research personnel  to gain research experience, develop new technical skills, and transfer  technology back to their firms. TIRI also conducts commissioned  research for which it receives external grants from the national  government and other organizations. According to a TIRI official, the  center primarily follows the R&D priorities and policies set by the  prefecture and TIRI, but universities and companies also contribute to  that agenda. About 24 percent of TIRI’s research is basic, 62 percent  is commissioned, and 14 percent is joint.
Technical training. TIRI has classrooms for seminars on product  design and courses, for which students pay a fee, on new technology,  industry trends, and internationalization. For example, officials  showed us door knobs for home use that they helped one SME  design. It offered this particular client assistance on usability,  suggesting that they tilt the knob head to make opening the door  easier. It also develops curricula and holds seminars to respond to  needs from individual businesses or particular industry groups.
Collaboration between industry and academic researchers. TIRI offers  various services for connecting industry, academia, and public  institutes. For example, it has instituted the Tokyo Innovation Hub to  facilitate networking among SMEs and to promote cooperation  between SMEs, universities, and research institutions. It also supports  activities to encourage collaboration among more than 20  associations through its Cross-industrial Association.
Technology management. TIRI offers support for technology  management, including seminars and on-site technical support to  assist with strategic development and technology management  techniques. It supports the development of new products that utilize  TIRI patents. It also provides information to SMEs related to  international standards compliance for clients who export products or  enter into foreign markets.
TIRI tracks 12 organizational targets to measure its performance,  including the number of patents acquired by TIRI and its partners, the  number of products commercialized, and the number of licenses granted.  Furthermore, it conducts a satisfaction survey of users each year.  According to TIRI officials, these surveys illustrate that the center has  successfully provided customer service but they face challenges with  R&D output. However, they said that, generally speaking, their testing  services have been highly appreciated by customers.
section_title: South Korea
subsections: section_title: Innovation
subsections: section_title: Daedeok Innopolis and Daejeon Technopark
paragraphs: Along with two other centers in South Korea, the Daedeok Innopolis  (Daedeok) is an innovation cluster that consists of universities, research  institutes, government and government-invested institutions, corporate  research institutes, and venture corporations. It receives funding from the  national government—the Ministry of Trade, Industry, and Energy —but  also generates revenue from private sector users. Focused on  commercializing technology, Daedeok is the only science park in South  Korea, according to officials. It has five separate zones, each with its  own specialized field, including a research complex, and other research  institutes; an area for hi-tech firms; and an area for traditional  manufacturing industries. Various entities located within Daedeok have  developed technologies that have been popular in the marketplace,  including 4th generation (4G) mobile technology, and according to  officials, the lithium ion battery, and a nuclear research reactor that put  South Korea at the forefront of these technologies.
The Daejeon Technopark (Daejeon) focuses on the business aspects of a  research institute, including growing existing SMEs and supporting R&D  in the information technology, nanotechnology, robotics, and  mechatronics industries. It was established in coordination with Daejeon  city and the national government as an outgrowth of the Daedeok  Innopolis, and it came into existence when it was designated as a special  R&D zone. While Daedeok focuses on technologies with great commercial potential, the Technopark focuses on smaller scale  companies and more routine assistance, such as marketing, according to  Daedeok officials.
Daedeok and Daejeon both provide support in the following areas for  businesses that use their services:
Commercialization. Daedeok networks with other regions and support  organizations to promote its research results. Daejeon functions as a  network hub between industry, academia, research institutes, and  local government. For example, they connect SMEs to researchers or  universities working on related research and provide SMEs access to  technology.  Intellectual property rights protection. Daejeon has a center dedicated  to intellectual property through which they conduct research on  existing technologies and trend analysis, support domestic and  international applications, train companies on intellectual property  protection, and support intellectual property planning for Daejeon City,  among other things. Daedeok manages unused patents and  evaluates new technology to match technology suppliers to potential  customers.
Technology sharing. For a fee, Daedeok provides facilities for various  types of testing on product prototypes, such as electrical,  temperature, or acoustic. Daejeon provides companies access to  technology along with business expertise for consultation for SMEs.  For example, during our visit, we observed testing of an electronic  collection system (the technology used in “EZ Pass”-type cards) to  see how it would perform under various speeds.
Training. Daejeon provides a variety of training services for  companies, both for new employees and continuing education on  cutting-edge technology. Daedeok also provides training for start-up  SMEs.
In addition to these services, Daedeok assists SMEs through grants and  one-on-one consulting services, such as matching technology suppliers  and customers, providing design services, and evaluating new  technologies. Daedeok’s R&D expenditures comprise 15 percent of the  country’s total R&D expenditures, according to officials. It houses 30  research institutes, 5 universities, and approximately 1,000 companies  (mostly SMEs). The area is responsible for developing approximately  40,000 patents. For government-designed projects at Daejeon, the  private sector typically shares 20 percent of the costs, according to  Daejeon officials. Currently, there are about 2,000 high-tech firms,  according to Daejeon officials.
One official noted that an assessment of Daejeon’s equipment centers  revealed that provide access to SMEs revealed that these centers are  only being used at 40 percent of their capacity. The official said that the  usage rate is not an area for concern because these centers are relatively  new. The official also emphasized that the center responds to the  expressed need from over 250 area companies. In addition, the official  noted that with a new president taking office, Daejeon could face  challenges if policy changes occur, but the official opined that policy  changes are likely to be minor.
The Electronics and Telecommunications Research Institute (ETRI) is a  global information technology research institute that works with the  national South Korean government, the private sector, and universities to  develop risky technology that the private sector is not willing to develop. It  is the largest government-funded research institute in South Korea. ETRI,  whose headquarters is located within the Daedeok Innopolis, collaborates  with various institutes around Daedeok, such as research institutes  focused on chemicals, energy, and satellites. It also conducts some joint  projects with foreign universities, including some in the United States, and  the private sector. These projects include research, technology transfer,  research and business development, and training for foreign countries in  areas such as information and communications technology.
ETRI is one of approximately 25 research institutes located within the  Ministry of Science, ICT, and Future Planning. In calendar year 2012, the  institute planned to spend almost 80 percent of its budget on government  commissioned projects.year and employs approximately 2,000 people, the majority of whom are  engineers.
ETRI conducts more than 500 projects each  ETRI is responsible for developing core information technology  inventions, including 4th generation mobile technology, specialized  handheld televisions, and a cancer diagnosis bio-chip for home use. The  typical length for each project is between 3 and 5 years. ETRI measures  success by the number of patent applications, amount of royalty income,  number of international/domestic standards contributions, and the number  of publications in science journals, according to one ETRI official. In 2012  and 2013, ETRI was ranked number one with the highest patent activity  by an intellectual property trade journal, which cited approximately 540  patents in 2012 and approximately 700 patents in 2013. The trade  journal measures overall strength of patent portfolio holdings based on a  combination of quality and quantity indicators, such as patents issued and  science and research strength.
section_title: Trade
subsections: section_title: Korea Trade-Investment Promotion Agency
paragraphs: The Korea Trade-Investment Promotion Agency (KOTRA) is the national  implementing agency for Korea’s trade and investment goals and policies  set by the Ministry of Trade, Industry & Energy. It facilitates South Korea’s  economic development through various trade promotion activities, such  as overseas market surveys and business matchmaking. It operates  programs in:  Intellectual property rights protection. KOTRA provides information  about intellectual property right laws to firms that operate outside of  South Korea.
Overseas marketing. KOTRA develops and updates marketing  strategies for South Korean products by the region and industry, and  provides support to firms for their participation in exhibitions hosted  overseas. KOTRA has also developed a “KOTRA global brand”  program to support brand value to promote confidence in South  Korean products that may be less familiar in overseas markets.  KOTRA also hosts a global trade show to promote South Korea’s  major export products.
SME support. KOTRA has more than 100 Korea Business Centers in  approximately 80 countries that function as incubation centers.  KOTRA also connects SME exporters to logistics companies— companies that help manage the flow of resources—in more than 20  major cities and regions worldwide to lower logistics costs for more  than 2,000 South Korean SMEs.
section_title: Appendix IV: GAO Contacts and Staff Acknowledgments
subsections: section_title: GAO Contact
paragraphs: Andrew Sherrill, (202) 512-7215 or sherrilla@gao.gov.
Lawrance L. Evans, Jr., (202) 512-4802 or evansl@gao.gov.
section_title: Staff Acknowledgments
paragraphs: In addition to the contact named above, Laura Heald (Assistant Director),  Kim Frankena (Assistant Director), Jaime Allentuck, Mark Glickman, and  Cristina Ruggiero made key contributions to this report. In addition, key  support was provided by James Bennett, David Chrisinger, Adam  Cowles, Alexander Galuten, Jose A. Gomez, Ernie Jackson, John Lack,  Kathy Leslie, Ashley McCall, Jean McSween, and Susan Offutt.
section_title: Related GAO Products
paragraphs: Export Promotion: Better Information Needed about Federal Resources.  GAO-13-644. Washington, D.C.: July 17, 2013.
Export Promotion: Small Business Administration Needs to Improve  Collaboration to Implement Its Expanded Role. GAO-13-217.  Washington, D.C.: January 30, 2013.
Science, Technology, Engineering, and Mathematics Education: Strategic  Planning Needed to Better Manage Overlapping Programs across  Multiple Agencies. GAO-12-108. Washington, D.C.: January 20, 2012.
National Export Initiative: U.S. and Foreign Commercial Service Should  Improve Performance and Resource Allocation Management.  GAO-11-909. Washington, D.C.: September 29, 2011.
Small Business Innovation Research: SBA Should Work with Agencies to  Improve the Data Available for Program Evaluation. GAO-11-698.  Washington, D.C.: August 15, 2011.
Department of Commerce: Office of Manufacturing and Services Could  Better Measure and Communicate Its Contributions to Trade Policy.  GAO-11-583. Washington, D.C.: June 7, 2011.
Factors for Evaluating the Cost Share of Manufacturing Extension  Partnership Program to Assist Small and Medium-Sized Manufacturers.  GAO-11-437R. Washington, D.C.: April 4, 2011.
America COMPETES Act: It Is Too Early to Evaluate Program’s Long- Term Effectiveness, but Agencies Could Improve Reporting of High-Risk,  High-Reward Research Priorities. GAO-11-127R. Washington, D.C.:  October 7, 2010.
America COMPETES Act: NIST Applied Some Safeguards in Obtaining  Expert Services, but Additional Direction from Congress Is Needed.  GAO-09-789. Washington, D.C.: August 7, 2009.
Export Promotion: Increases in Commercial Service Workforce Should Be  Better Planned. GAO-10-874. Washington, D.C.: August 31, 2010.
Best Practices: DOD Can Achieve Better Outcomes by Standardizing the  Way Manufacturing Risks Are Managed. GAO-10-439. Washington, D.C.:  April 22, 2010.
International Trade: Observations on U.S. and Foreign Countries’ Export  Promotion Activities. GAO-10-310T. Washington, D.C.: December 9,  2009.