The Role of Government in Manufacturing Infrastructure Support

By Conrad Leiva 

Manufacturing is an important part of the government agenda in many countries because it creates high-paying jobs, drives technological innovation, and generates more economic activity than any other sector. The competition for a strong manufacturing industry is a global one and initiatives to promote and advance manufacturing from other governments include Germany’s “Industrie 4.0”, France’s “Industrie du Futur”, and China’s “Made in China 2025”. The U.S. should not fall behind in manufacturing technology leadership, and the federal government has a role to play.

The U.S. strategy to stimulate, maintain and attract manufacturers has many dimensions, including promoting research and development, improving the business tax code, training the manufacturing workforce, and establishing favorable trade policies that open global markets and cut down trade barriers. The environment and proposition for establishing manufacturing plants in the U.S. needs to be competitive with other areas in the world. The country should maintain the tradition of a strong manufacturing industry — built upon a foundation of hard work, determination  and innovation.

The government plays a role in research and development of new manufacturing technologies

One of the ways that government stimulates manufacturing is through research and development (R&D) programs where academia, industry and government collaborate to move the entire industry forward and share the risk and rewards of innovative technology research. R&D activity is vital because economies that have consistent levels of innovation, also tend to have high levels of economic growth [1]. The business sector accounts for most of R&D investment, but the public sector is responsible for approximately 40% of R&D investment in the U.S. [2]

The U.S. federal government’s “Manufacturing USA” initiative has created a network of  more than a dozen manufacturing innovation institutes around the country including the following:

America Makes:  a national accelerator and the nation’s leading collaborative partner for technology research, discovery, creation and innovation in additive manufacturing and 3D printing.

  • ARM (Advanced Robotics Manufacturing): The ARM Institute’s mission is to create and then deploy robotic technology by integrating the diverse collection of industry practices and institutional knowledge across many disciplines – sensor technologies, end-effector development, software and artificial intelligence, materials science, human and machine behavior modeling, and quality assurance – to realize the promises of a robust manufacturing innovation ecosystem.
  • CESMII (Clean Energy Smart Manufacturing Innovation Institute): Smart Manufacturing works to spur advances in smart sensors and digital process controls that can radically improve the efficiency of U.S. advanced manufacturing.
  • DMDII (The Digital Manufacturing and Design Innovation Institute): DMDII encourages factories across the United States to deploy digital manufacturing and design technologies, so those factories can become more efficient and cost-competitive.
  • IACMI (The Institute for Advanced Composites Manufacturing Innovation): IACMI is committed to accelerating development and adoption of cutting-edge manufacturing technologies for low-cost, energy-efficient manufacturing of advanced polymer composites for vehicles, wind turbines and compressed gas storage.

The government supports manufacturing infrastructure requirements

In addition to helping with education, research and development programs, the federal government has an important role in maintaining and enhancing the infrastructure for utilities and transportation required by the manufacturing industry.

The U.S. electric grid is an engineering marvel with more than 9,200 electric generating units having more than 1 million megawatts of generating capacity connected to more than 600,000 miles of transmission lines. The electric grid is more than a network of electrical plants and wires, it is an ecosystem of asset owners, manufacturers, service providers, and government officials at federal, state, and local levels, all working together to run one of the more reliable electrical grids in the world.

The electric infrastructure is aging and it is being pushed to do more than it was originally designed to do. The grid needs to be modernized, making it “smarter” and more resilient through the use of cutting-edge technologies, equipment, and controls that communicate and work together to deliver electricity more reliably and efficiently. An improved grid can greatly reduce the frequency and duration of power outages, reduce storm impacts, and restore service faster when outages occur. A new “smart grid” can integrate consumers and suppliers, and provide improved security, reduced peak loads, increased integration of renewables and lower operational costs.

The federal government, working with state and local government, has played a central role in the development of our nation’s transportation infrastructure. In the 19th and early 20th centuries, the federal government invested in roads, locks, inland waterways and harbors, and that investment paid off, allowing the U.S. to grow into the strongest economy in the world.

In 2002, U.S. freight carriers moved more than 19 billion tons of freight valued at more than $13 trillion, and traveled 4.4 trillion ton-miles over our transportation network. The U.S. Department of Transportation (DoT) estimates that by 2035, the volume of freight shipped on the U.S. intermodal transportation system will increase to 33.7 billion metric tons, worth more than $38 trillion — an increase of more than 48%. [3]

Advances in logistics have turned the nation’s roadways into virtual warehouses thanks to just-in-time delivery, but the growth in congestion on the nation’s roadways threatens these efficiency gains.

The nation’s rail network has also experienced significant freight growth, and the U.S. DoT estimates that demand for rail freight tonnage will increase by 88% by 2035.

Ports and waterways continue to serve as vital links to trade. The U.S. is the world’s largest trading nation, accounting for nearly 20% of the world’s total ocean borne trade. 95% of all U.S. foreign trade tonnage is shipped by sea. Over the next 20 years, the DoT expects U.S. foreign ocean-borne trade to double.

Air transportation is another key part of the transportation system. The federal government has long been involved in promoting and developing the nation’s air service and infrastructure. This role continues today with the Federal Aviation Administration’s (FAA) operation of the air traffic control system and oversight of safety of airlines, pilots and airplanes. The FAA also provides grants to airports to develop their infrastructure through the Airport Improvement program.

Many more manufacturers are dependent on shipment services via airplane — not only from suppliers but also for delivery of products to customers. Airport congestion causes billions of hours of travel delays that result in additional billions of gallons of fuel being used while shippers, travelers and commuters are stranded in traffic and not moving. This congestion is also increasing logistics costs. Transportation accounts for 60% of the total logistics costs for manufacturers.

Many aspects of the nation’s transportation network are currently operating at or near capacity. With future trade volumes expected to more than double across all modes, new strategies are needed to fund and allocate the resources required to further develop these systems and meet the needs. Insufficient investment — and the resulting inefficiency in the roadway system — is having a significant impact on the nation’s economy.

Other countries including Brazil, China, India and many European countries are investing in their transportation infrastructure. The U.S. government could provide more visibility on these issues to the public and explain the importance of these types of investments to the future of the manufacturing industry.

The government helps to establish rules and guidelines for integrating the ecosystem

It might be counterintuitive because standards are difficult to develop and take time to adopt in industry, but standards support innovation and growth in many ways:

  • Standards permit the sharing of investment and risks related to implementation of the standard across companies in an industry
  • Standards help the exploitation of innovative ideas that depends on communication and integration standards as a framework for collaboration in the manufacturing ecosystem
  • Standards allow innovation by combination of techniques that involve different standards across different domains.
  • Standards avoid redundant efforts for many companies of “re-inventing the wheel” when a standard practice already exists.
  • And standards create a more competitive environment by allowing smaller product and service companies to participate with less cost and risk in a more open multi-vendor manufacturing ecosystem.

Between the late 19th- and early 20th-century advances in infrastructure, standardization and mass production methods fueled the second Industrial Revolution.  Infrastructure advances included large growth in railroad, gas, water, electricity, telegraph and telephone networks.  Government stepped in and established standards for a range of services, including railroad gauges, electricity voltages, layout of typewriter keyboards and rules of the road for automobiles. This period was marked by large economies of scales created by the new infrastructure and a corresponding reduction in setup and indirect cost to manufacturers.

Throughout the 19th century, the American, British and French militaries were sponsors and advocates of interchangeability and standardization. The standards developed had a positive impact on industry for many years but eventually became a burden on defense procurement processes. In the U.S., defense standards including MIL-SPEC and MIL-STD had grown to over 30,000 in 1990. In 1994, the DoD decided to reform the practices and move from government-developed standards to commercial standards developed by non-military standards groups.

Examples of organizations working on standards are ISO (an International Federation of the National Standardizing Associations), and the IEEE (Institute of Electrical and Electronics Engineers). These are technical professional associations with membership composed of engineers, scientists and professionals from industry, academia and government working together to develop and evolve standards for specific applications and industries. Government now endorses and promotes these standards and uses them in their procurement processes.

Government was instrumental in the development of the Internet, which evolved from early government networks like ARPANET and CSNET. In 1974, the IEEE published the TCP/IP standard that became the foundation for networking for the Internet. However, the foundational model for that standard was developed by DARPA (Defense Advanced Research Projects Agency) in the 1960s. In 1982, the DoD declared TCP/IP the standard for all military computer networking. Afterward, IBM, AT&T and DEC adopted TCP/IP despite having competing protocols. The Internet has been embraced as a platform for eCommerce applications and data exchange with suppliers via integration standards like EDI (Electronic Data Interchange) and OAGIS (Open Applications Group Integration Specification).

The biggest use of the Internet is yet to come with the Internet of Things. Gartner estimates that connected pieces of equipment in manufacturing will rise 30% every year to more than 500 million by 2020. [4] It would be impossible to be looking forward to the Industrial Internet of Things (IIoT) without standards like TCP/IP, OPC-UA, MTConnect, EDI and OAGIS helping us connect equipment and systems from the manufacturing factory into the supply chains.

The work of the manufacturing institutes listed above includes evolving, developing and promoting the communications standards needed for future digital and Smart Manufacturing ecosystems through documented integration practices and test bed results. Another government agency helping with standards is the National Institute of Standards and Technology (NIST). The NIST paper “Current Standards Landscape for Smart Manufacturing Systems” [5] is a great resource for learning more about the evolving role of standards in manufacturing. NIST has also published an important Cybersecurity Framework, [6] which many organizations are using as a reference model for reviewing security in manufacturing systems.

In summary, manufacturing is a vital part of a healthy economy and the competition to attract manufacturers is a global one. Other countries, including Brazil, China, France, Germany and India are investing in R&D and infrastructure to improve their ability to attract, support and maintain the manufacturing industry. The U.S. should not fall behind in manufacturing leadership and the government has multiple important support roles to play. Industry, academia, and government should strive to make “Made in America” a shared pride for all Americans. More visibility on the role of government and constraints to a competitive environment can help the public understand the importance of these types of investment for the future of the U.S. manufacturing industry.

Conrad Leiva is VP Product Strategy and Alliances at iBASEt. His career has included consulting with many aerospace and defense companies on how to streamline the paperwork and information flow among engineering, planning, quality, production and supply chain disciplines. He has recently focused his work on manufacturing intelligence and the integration between engineering, business, and manufacturing systems working with PLM and ERP partners.


[1] Research & Development, Innovation and the Science and Engineering Workforce, National Science Foundation, 2012

[2] Digital Prosperity: Understanding the Economic Benefits of the Information Technology Revolution, Atkinson/McKay, The ITI Foundation, 2007

[3] The Government’s Role in Ensuring a Strong Transportation Infrastructure, U.S. Rep. James L. Oberstar, 2007

[4] “The Emperor’s New Clothes and the Factory of the Future,” Simon Jacobson, Gartner Supply Chain Conference, 2015

[5] NISTIR 8107 – Current Standards Landscape for Smart Manufacturing Systems, Lu/ Morris/Frechette, NIST, 2016

[6] NIST Cybersecurity Network,

Matthew Portu, President, Freudenberg-NOK Sealing Technologies