“Lost Einsteins” is a term coined by researchers at the Massachusetts Institute of Technology to describe the millions of potential inventors who could advance the nation’s innovation, but have been excluded from participating. Researchers found that innovation in the United States could quadruple if women, people of color, and economically disadvantaged children became inventors at the same rate as men from high-income families. At the moment, the pathway to innovation in technology and manufacturing is highly restricted by class: those with the highest economic privilege are nearly ten times more likely to become inventors than those who are the most disadvantaged. The America COMPETES Act of 2022 seeks to change that inequity by scaling manufacturing and rebuilding the industry with an eye toward ensuring everyone can participate in and benefit from the sector, in an effort to power the nation’s economy in an increasingly competitive global environment.
The passage of the America COMPETES Act has the potential to leave an indelible mark on the nation’s manufacturing industry, workforce provisions, and industrial policy. With the Senate having already passed its version of the bill (the U.S. Innovation and Competition Act) through a bipartisan vote with the support of sixty-eight Senators, the passage of the America COMPETES Act in the House brings the country one step closer to robust industrial policy on par with global competitors such as China, Japan, and Germany.
In April 2021, Senate Majority Leader Chuck Schumer introduced the U.S. Innovation and Competition Act (USICA), which passed in the Senate in June 2021, with bipartisan support. The America COMPETES Act followed after USICA. Although they are two different acts, there are key similarities in manufacturing between USICA and the America COMPETES Act, including investments for the semiconductor industry, supply change resilience, climate change, and research and development. Senate leaders from both parties, including U.S. Senator Todd Young (R-IN), are hopeful that the House and Senate will work through these differences and come up with a final package this Spring. This won’t be an easy task, especially given the rise of partisan bickering during an election year, and a number of key differences between the two bills. But, it does present a policy window for the largest reinvestment in American manufacturing since the Second World War, which Congress should be sure not to miss.
This commentary will explain why this bill matters for manufacturing, racial equity, and trade policy, and has very positive implications for workers who have been too often excluded from previous initiatives.
A Historic Investment in Manufacturing
Manufacturing is the lifeblood for many communities, providing middle-class jobs and robust economic activity. Furthermore, manufacturing has special value to smaller cities and towns, particularly in the Midwest and Southeast, as well as for urban communities of color where deindustrialization has had lasting negative impacts. And, manufacturing has gained fresh attention over the past two years, starting with the nation’s need for medical goods during the COVID-19 pandemic, continuing now as snarled supply chains have driven up prices for cars and other critical goods, and looking ahead to electric vehicles, alternative energy generation, and other innovative technologies needed to addresses the existential challenge of climate change.
A centerpiece of the America COMPETES Act is the CHIPS for America Fund, which allocates $52 billion to initiatives established by the CHIPS for America Act and paves the way for America to fabricate computer chips as well as reduce semiconductor supply chain disruptions. This fund could have an outsized impact on the entire manufacturing sector in America. As Mark Muro, Robert Maxim, and Stephen Ezell at Brookings argue, semiconductor devices are essential to today’s digital economy, as they operate most cars and all computers. The manufacturing and sale of these devices are dependent on a robust semiconductor supply chain, and the funding allocated by the act not only will ensure that the digital economy operates without disruption, but also will strengthen the nation’s capacity for technology and innovation. Historically, this fund has been particularly important, as the U.S. semiconductor industry for years has lagged behind those of competitor countries. Researchers, including those at the Information Technology and Innovation Foundation, found that only ten years after creating the semiconductor industry, the United States lost its global leadership, and the nation’s lack of attention to this critical industry meant U.S. competitiveness continued to erode. The $52 billion commitment to American computer chip production in the America COMPETES Act will once again put America in a winning place.
Section 20204 of the America COMPETES Act creates the Critical Supply Chain Resilience Program, including an authorization of $45 billion to strengthen the nation’s supply chain, economy, and national security. During the pandemic, this program matters more than ever as it supports the production of critical goods such as masks, ensuring that high quality masks such as N95 are made in the United States for all Americans, especially health care workers and students. This new program, recommended as part of the Biden administration’s 100-day review of supply chain weaknesses, would give the administration tools to establish a national supply chain strategy and continually and respond to monitor threats to the production of those goods. The resources would allow the federal government to deploy grants and loans toward the expansion of domestic manufacturing of these critical goods. The program would become a pillar of a new approach to American industrial policy that identifies a set of strategic manufactured goods, resulting in a lesser likelihood that the United States would be dependent on foreign-made essential products that have proven to be in short supply when needed. In essence, the program would follow through on House Majority Leader Steny H. Hoyer’s words, “When America competes, America wins.” The act also includes a new expansion grant program for the Manufacturing Extension Partnership and two new competitively awarded Manufacturing USA programs, but at lower levels than in the U.S. Innovation and Competition Act.
Supporting Bottom-Up Development of Advanced Manufacturing Technologies and Jobs
Advanced manufacturing economies rely on a set of shared resources, including research capacity, skilled workers, access to capital, and infrastructure. Dubbed the industrial commons by Harvard Professors Gary Pisano and Willy Shih, and called the key to “jump-starting America” by MIT’s Jonanthan Gruber, these resources operate in regional clusters of specialized technology. In an effort to spur technology-based economic development in more communities, Both the House America COMPETES Act and the Senate U.S. Innovation and Competition Act include a new Regional Technology Hub Program. The goal of the program is to spread technology and advanced manufacturing development more equitably across the country, especially rural areas and those away from coastal high tech boom areas like Silicon Valley. This competitive grant program would direct resources to regional education and economic development leaders to create an ecosystem of innovation, job creation and skills development.
The House included key language that would strengthen the effectiveness of the proposed program, especially as it relates to engaging underserved communities in technology and manufacturing jobs. This includes making serving under-represented communities a goal of the program, expanding the list of eligible grant recipients to include economic development organizations focused on under-represented communities, the siting of a portion of grant funds in communities with Historically Black Colleges and Universities (HBCUs) or other minority-serving institutions. Moreover, it would encourage the development of worker cooperatives and employee ownership in manufacturing.
Opening Up the Doors for All Communities to Participate in Technology and Manufacturing
In a statement celebrating the House passage of the America COMPETES Act, Senator Raphael Warnock (D–GA) underscored that, “Until we fully include students at HBCUs and MSIs in our workforce development efforts, we are failing to develop the most qualified, innovative, and entrepreneurial workforce.” An amendment in the act increased funding for a new Capacity Building Program for Developing Universities by $1.2 billion, ensuring that minority serving institutions have the capacity and opportunity to benefit from National Science Foundation even if they are not yet so-called R1 institutions. This is one of several provisions to distribute National Science Foundation (NSF) funding more equitably, including a program to foster the capacity outside of the top 100 recipients of NSF dollars and a pilot program creating partnerships between typical NSF recipients and emerging research institutions. This correlates with a report from the National Science Foundation that found that a small pool of only thirty institutions nationwide accounts for a whopping 42 percent of all research and development spending by colleges and universities across the country. And sadly, none of these thirty universities are HBCUs or minority serving institutions. The America COMPETES Act will help undo this historical wrong by promoting the inclusion of HBCUs and MSIs in future research and development efforts
The Penn Center for Minority Serving Institutions found that Black students studying engineering earned only 4.2 percent of bachelor’s degrees across the United States in 2012, while white students earned 68.1 percent. A more robust investment in HBCUs would help narrow this gap. Although HBCUs comprise only 3 percent of colleges and universities, nearly 27 percent percent of African-American students at these schools graduate with a STEM-related degree. For research and development, HBCUs award 30 percent of STEM doctoral degrees for Black graduates, and 46 percent of STEM degrees for Black women.
Furthermore, for new federal investments to make their desired impact, it must recognize the gender barriers that exist in the manufacturing sector. For women, men, and nonbinary people in the manufacturing industry, sexual harrassment is often the elephant in the room in leadership conversations. Women in particular leave the industry at astonishing rates due to this dynamic, depriving themselves and their families of the opportunities that come with well-paying jobs. Positively, the COMPETES Act included the language that directs the Office of Science and Technology Policy to issue standardized guidance on sexual harassment for all grantees and requiring an updating a policy. This section would place sexual harassment on the same level as research misconduct.
Trade Adjustment Assistance
The America COMPETES Act includes a number of key trade policy provisions that have been lauded by the labor movement and progressive trade leaders. Of special interest is the reauthorization of the Trade Adjustment Assistance (TAA) program, which is set to completely expire in July. Since 1962, TAA has made a difference for thousands of workers who lose their jobs due to trade, giving them a lifeline to provide basic necessities for themselves and their families as well as workforce development support as they transitioned to new careers. The Trade Adjustment Assistance Modernization Act of 2021 is made stronger in the America COMPETES Act by the inclusion of allowances for job searches and a child care allowance of $2,000 each, longer periods of income support, new funding for stronger community college training programs to connect dislocated workers to high-paying jobs, and new resources for communities to develop new industries and jobs to replace those that have left.
Beyond these individual benefits, and perhaps more important, TAA would have new provisions related to racial equity, particularly for those historically distressed by trade policies. Recent research by The Groundwork Collaborative found that Black earnings are reduced by 3.84 percentage points for every 1 percentage point increase in import exposure in the exposed sector, and the adverse impacts on trade policies were most pronounced for Black workers.
The introduction of the America COMPETES Act was led by Representative Eddie Bernice Johnson (D–TX), the first African-American and woman to chair the House Committee on Science, Space, and Technology, and the act incorporates numerous bipartisan components that had been passed through her committee. It is fitting that the act passed the House at the start of Black History Month, when the nation collectively commemorates the resiliency and contributions of Black Americans. During February, Americans learn why the Black experience is a part of the American experience, from medicine to the arts, and the America COMPETES Act will open the doors for Black Americans to make many more history-making contributions to science and technology. Now, if they can reconcile the House and Senate versions of the bill, Congress has an exciting chance to lay the groundwork for a bipartisan industrial policy and make a lifelong, positive difference for all of America’s workers. The nation’s lost Einsteins deserve better.