What’s the practical effect of Biden’s executive order on manufacturing?
The paper aims to reduce bureaucratic procedures and simplify the reporting obligations in the national research and development endeavors.
President Biden speaks to the audience gathered at Auburn Manufacturing on Friday during his trip to Maine. His purpose is to advocate for his economic plan and validate an executive order ensuring that items and innovations produced domestically with government funding remain within the country. Andree Kehn from the Sun Journal captured the moment in a photograph.
The executive decree President Biden authorized in Maine on Friday promotes domestic production of items originating within the borders of the United States. However, what precisely does this decree state, and what are its intended achievements?
The government asserted that numerous significant technologies have been innovated and monetized by American corporations. However, these technologies have frequently been manufactured in foreign countries, even when the initial research and development was financed using taxpayer money and could have been produced within the US.
The presidential decree strives to disrupt that routine and ensure that both the creativity and the manufacturing remain within the borders of the United States.
Biden expressed in the executive order that our globe has become stronger, more intelligent, better linked, and more enduring as a result of the monetary contribution from federal taxpayers towards exploration and innovation, which has aided the introduction of fresh goods and services into the market. Henceforth, if the United States government offers assistance in the development of novel technologies and products, they will be produced within the borders of the United States whenever possible and in accordance with relevant legislation.
The executive directive aims to reduce bureaucracy and simplify the documentation needed for federal research and development endeavors. It promotes the growth of essential industries in the country by facilitating domestic production and making the process of obtaining manufacturing waivers more transparent, efficient, and uniform. Furthermore, it enhances the encouragement for inventors to manufacture their creations within the United States, particularly if they were funded by the federal government.
Although it states several objectives, the executive order often fails to provide specific instructions, resulting in ambiguity and allowing for different interpretations.
Agencies are advised to "think about creating a procedure" to exempt the requirements for manufacturing within the country. The leaders of agencies, along with the management of the Small Business Administration, are urged to promote a synchronized approach involving multiple governmental departments.
Furthermore, there is no acknowledgement of any supplementary funds to support the implementation of these modifications.
Julie Fraser, who serves as the vice president of research for operations and manufacturing at Tech-Clarity, a research firm based in Pennsylvania that specializes in innovation and manufacturing, expressed optimism about the executive order's objectives, deeming them highly impactful in the future.
President Joe Biden has officially put his signature on an executive order that aims to stimulate domestic production and innovation within the United States. This significant event took place at Auburn Manufacturing Inc. in Auburn, where several influential figures were present to witness the enactment. Among those in attendance were Congressman Jared Golden of Maine, Auburn Mayor Jason Levesque, Senator Angus King of Maine, and Governor Janet Mills of Maine. The occasion was captured by Susan Walsh of the Associated Press.
Simplifying the reporting demands is of utmost importance, emphasized Fraser.
Trying to monitor advances
According to a document shared by the White House, the government has faced difficulties in monitoring the progress of technologies once it has put money into their research and development. To address this issue, the executive order aims to update iEdison, the government reporting system that involves multiple agencies, in order to provide researchers, businesses, and the general public with improved insights into the innovation scenario in the United States.
The directive would assist the authorities in monitoring the destinations of new developments. "The leaders of governmental bodies... must obligate beneficiaries of financial agreements for federal research and development to monitor and inform the granting authority about the places where subject inventions are produced," mentions the executive mandate.
It instructs organizations to move their reporting obligations to The National Institute of Standards and Technology’s iEdison portal by the end of 2025. Numerous organizations already utilize this system and it will consolidate reporting for recipients of federal funding and their licensed users. This is also expected to lessen the administrative load on the recipients and offer more uniform commercialization data.
In the past, various divisions have utilized diverse systems for reporting, as indicated by Fraser. The task of maneuvering through all these systems has been arduous, perplexing, and costly. Simplifying this procedure ought to motivate more manufacturing enterprises to collaborate with the government, according to her.
According to Michelle Boucher, who holds the position of vice president of research and engineering practices at Tech-Clarity, it is crucial to motivate enterprises to collaborate with the government. She emphasized that government investments in innovation have yielded positive outcomes in various nations and hold potential in our own country as well.
"As a nation, it is essential for us to foster innovation in order to maintain our competitiveness. However, it is important to acknowledge that innovation carries some degree of risk, as not all creative ideas yield successful outcomes. Hence, there is no guarantee that a company will be able to regain the financial investments made in research and development (R&D). By providing financial support, we can, to some extent, diminish these risks. Nevertheless, if the manufacturing or production activities are outsourced overseas, the government will not fully benefit from its investment, as not all the job opportunities will remain within our country. That's why witnessing the implementation of a program like this is truly remarkable and encouraging."
However, there are instances when it is not feasible to produce goods in the United States. The Bayh-Dole Act allows agencies to exempt certain products that are based on or made using a specific invention from the requirement of being "manufactured substantially in the United States" if reasonable attempts to grant licenses to potential manufacturers in the United States have failed or if domestic manufacturing is not commercially viable given the current circumstances.
Government agencies will be responsible for formulating a series of exemption inquiries that can be utilized throughout the entirety of the government, as outlined in the executive order. Additionally, they will outline the methodologies and justifications behind the implementation of these exemptions. Manufacturers will also be required to furnish comprehensive information regarding the specific circumstances warranting foreign production of the invention, inclusive of factors such as workplace unionization, adherence to health and safety regulations, compliance with labor and wage legislations, and assessment of ecological consequences.
The order consistently emphasized the importance of enhanced openness, pledging to provide taxpayers with more information regarding the allocation of federal funds for research and development to boost domestic manufacturing and employment opportunities.
An Invitation to Unleash Your Imagination
The executive order further broadens the current rule that only applies to a limited number of companies with exclusive permits to produce and market a particular invention within the United States. It now allows other manufacturers of "essential and emerging" technologies to participate as well.
"I appreciate its universal application to any organization," Fraser expressed. "Typically, only a few, immensely huge corporations take part."
According to a renowned academic named Ross Baker, who teaches political science at Rutgers University, the directive can be interpreted as a plea to individuals to exhibit their ingenuity and originality.
"He mentioned that the current economic climate is favorable for entrepreneurship, therefore, don't hesitate to initiate a new venture," he stated.
There is no need for extravagant or impossible commitments. According to Baker, research, development, innovation, and production do not happen quickly, so it will take a while before jobs are created and the effectiveness of the project can be assessed.
According to Mark Brewer, a professor and temporary leader of the political science department at the University of Maine, the executive order possesses some level of strength, but it is primarily a strategic maneuver by Biden, who is aiming to secure another term in office.
"Ensuring employment opportunities for Americans stay within the borders of our nation is a persuasive stance for any candidate to adopt," he expressed.
Biden has consistently expressed his focus on reconstructing the economy "starting with the middle class and working from the bottom" and this order serves as another means to highlight that approach, Brewer stated.
He stated that it is undoubtedly a valuable strategy for the campaign, "however, the extent to which the policy will yield results will only be determined after a period of three, four, or five years."
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