1. Gardner Carrick Senior Director The Manufacturing Institute March 28, 2012 HPCC Conference

2. Manufacturing’s Multiplier Effect 2 Source: U.S. Bureau of Economic Analysis, 2007 Annual Input-Output Tables

3. The Public Supports Manufacturing 3 The Manufacturing Institute & Deloitte - September 2011

4. A Renaissance in Manufacturing?  Over 400,000 jobs added in the last two years.  Major consulting firms issue reports predicting a return of manufacturing from Asia. 4 Manufacturing Jobs in U.S. (000s)

5. Structural Cost of Manufacturing  U.S. Manufacturers face a 20% cost burden over competitors from our largest trading partners.  Corporate tax rates make up over half that burden as other countries have reduced rates. 5 U.S.CanadaMexicoJapanChinaGermanyU.K.KoreaTaiwanFrance 199740%44%34%51%33%57%31%30%25%36% 201040%31%30%40%25%29%28%24%17%33% The Manufacturing Institute & MAPI - October 2011

6. Global Competitiveness Challenge: Disturbing Trends The 2010 trade deficit for all manufactured goods was $565B; and for advanced technology products was $81B Source: The Manufacturing Mandate, Unleashing a Dynamic Innovation Economy, Aug. 2010 The Association For Manufacturing Technology Manufactured Goods U.S. Trade Balance

7. Challenges Opportunities Percentage of votes for an option Priorities to Improve Manufacturing Competitiveness

8. How important will having world-class manufacturing technologies be to your company's overall competitiveness in the next 5 years? Extremely important Not at all important Importance of Innovation

9.  June 2010 Global Manufacturing Competitiveness Index;  Primary driver of competitiveness is “talent-driven innovation”  June 2011 PCAST Report to the President on Ensuring American Leadership in Advanced Manufacturing:  “The United States is lagging behind in innovation in its manufacturing sector relative to high-wage nations such as Germany and Japan”  October 2011 Economist Intelligence Unit survey of senior executives from U.S. manufacturing firms  90% identify innovation as the key to long-term success  January 2012 Dept. of Commerce report “The Competitiveness and Innovative Capacity of the United States”  “Innovation is the key driver of competitiveness, wage and job growth, and long-term economic growth.” Importance of Innovation Widely Recognized

10. Structural problem requires a structural solution Universities, NSF Centers, Federal Labs High-risk research Long time horizon Not focused on shop floor implementation Industry, NIST MEP Incremental improvement Off the shelf technology Short time horizon Time to deployment Technical Innovation Best Practices Basic Research/ Education Manufacturing Technology Innovation Missing Middle Manufacturing technology innovation, maturation, commercialization, insertion Medium time horizon High impact Insufficient Emphasis on Maturing New Manufacturing Technology

11.  Fraunhofer Institutes (Germany)  A*STAR (Singapore)  SEMATECH  NCMS  NIST MEPs  University Centers  EWI Edison Center  DoD MANTECH  EPRI  Federal laboratories  One-off federal solicitations None of these models alone is sufficient to bridge the U.S. “Manufacturing Innovation Gap” A new American model is needed Many Innovation Models

12.  25 industry participants ─Large, medium, and small companies ─Range of sectors  Confirmed need for an infrastructure to mature manufacturing technology  Reviewed innovation models  Consensus behind a proposed innovation model to develop, mature and implement advanced manufacturing technology Industry Driven Model

13. Industry Consortia Component  Sector specific and organized around industry clusters;  Member based collaborations; financial support to demonstrate relevance;  Government/industry cost share pre-competitive technology development;  Engages universities and national labs to address “grand challenges;”  Workforce development through educational institutions;  IP framework that reduces barriers to collaboration.

14. Application Center Component  Manufacturing technology specific; capabilities that are world-beating;  Facilities and expertise to support all sectors and business sizes;  501(c)(3) not-for-profit corporations focused on industry clients;  Primarily industry funded to implement technology for proprietary applications;  Modest government funding to build core capabilities;  IP framework that reduces barriers to implementation; 14

15. Manufacturing Applications Centers Industry Consortia Industry support drives entries and exits Consortia/Center Examples

16.  Engage industry leaders to identify and solve common challenges  Leverage industry and government funding to develop pre- competitive technologies  Access wide range of technical organizations for innovative technology development  Advance industry codes and standards  Support workforce training and education programs  Program management to ensure timely and efficient execution  Royalty-free licenses to IP created by the consortium Benefits of the Industry Consortia

17.  Practical application of the technologies leveraging proven solutions from a wide range of industry sectors  Access to world-beating manufacturing technology expertise and high-value capital equipment  Robust network to rapidly connect small, medium, and large manufacturers with the best technical assets  Network collaboration to advance cross-cutting technologies, e.g., modeling and design methodologies  Client ownership of IP developed on client projects  Leverage Application Centers background IP Benefits of the Application Centers

18. Universities, NSF Centers, Federal Labs High-risk research Long time horizon Not focused on shop floor implementation Industry, NIST MEP Incremental improvement Off the shelf technology Short time horizon Time to deployment Technical Innovation Bridging the Innovation Gap Application Centers Mature and commercialize technology Implement for industrial applications Industry Consortia Precompetitive technology development Workforce Training National network of industry-focused application centers and consortia linked to existing assets

19. Innovation Concept Gaining Support  DARPA Open Manufacturing  National Network for Manufacturing Innovation $1B budget request $45 million in existing funds for pilot program  DOE Manufacturing Demonstration Facilities  EWI, CCAM and Others 19

20. HPC in Manufacturing – Discussion and Attempted Action  Council on Competitiveness  National Lab Partnerships  University Outreach  Manufacturing Institute  Ohio Supercomputing Center  National Center for Manufacturing Sciences 20

21. Is the Divide Too Wide?  280,000 manufacturers in the U.S. How many are equipped to use HPC assets? Possess the expertise Understand the application Have access to a location Have the budget  How many HPC locations are prepared to address the challenges to make it possible? Licensing Security Consulting IP 21

22. Application of Digital Assets  Virtualize product lifecycle;  Prototype and refine innovations;  Simulation-based education and training;  For smaller OEMs or suppliers, is there a model to capitalize on digital assets short of Top 500?  If HPCC, other groups, or individual centers discover a successful method, the Manufacturing Institute is prepared to assist. 22