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Helping U.S. Advanced Industries, which are Crucial for the U.S. Economy

March 4, 2016

Derek Hill, National Science Foundation

A mechanical arm engages in an Oak Ridge National Laboratory experiment regarding use of plutonium-238 as an energy source for space exploration.

Advanced industries, such as those that manufacture clean energy technologies, contribute to the local economies where they are located, but how much? The Brookings Institution has identified a set of 50 advanced industries that are R&D intensive and employ a high share of highly skilled STEM (science, technology, engineering, and math) workers. The 50 industries are classified into three sectors: energy (3 industries), manufacturing (35 industries), and services (12 industries).

The performance of these high tech and R&D-intensive U.S. industries may provide insight to the successes and challenges of regions with clean energy manufacturing. Like advanced industries, clean energy manufacturers also invest heavily in R&D and employ a high share of STEM workers. In addition, clean energy manufacturing industries are likely to use intermediate goods, services, or technologies produced by other advanced industries.

According to Brookings, the nation's 50 advanced industries play a major role in the U.S. economy. In 2013, these industries employed 12.3 million workers (9% of private sector employment) and produced $2.7 trillion in value added output (17% of U.S. GDP). The average advanced industry worker earned nearly twice as much as the average worker outside this sector. The Brookings' advanced industry sector employs about 80% of the country's engineers, obtains about 85% of all U.S. patents, and accounts for 65% of U.S. exports. These industries tend to cluster in larger metropolitan areas with a focus on advanced manufacturing, energy specialization, or advanced services, such as research and development. Among the Brookings' advanced industry sector, the 35 manufacturing industries collectively employed 5.5 million workers and produced $1.2 trillion in output.

Despite their impressive performance, U.S. advanced industries face several challenges. Since 2000, the sector's employment and output as a share of the U.S. total labor force and GDP has fallen. In several European countries, including Germany, Sweden, Finland, and Italy, the advanced industry sector has a higher share of employment than the United States. Advanced industries rely heavily on highly skilled STEM workers, but many U.S. employers report difficulties finding qualified STEM workers, which hampers their competitiveness. A further complication is sharp regional variations in the availability of STEM graduates to fill jobs.

In order to better understand these issues related to clean energy manufacturing, I am delighted to join CEMAC for a part-time detail for six months. Together, we will be researching the interaction among government, industry, universities, and research institutes in developing and sustaining technology clusters to help inform CEMAC's research in U.S. clean energy manufacturing.