start-ups. Japan, Brazil, the United Kingdom, Sweden, India, the Netherlands, Germany, and other nations have adopted programs that often are modeled directly on SBIR or other U.S. policies and address the early-stage funding challenge in the innovation chain.

•    Talent: Singapore, Canada, and China are among the nations that are attracting star scientists from around the world to their universities and research institutes by offering high salaries and opportunities to run well-funded programs. In the U.S., foreign-born U.S. science and technology graduates and entrepreneurs often face great difficulty obtaining U.S. residency visas and citizenship. Others are investing more in their existing workforce. Germany, for example, is a pathfinder in high-skilled worker training and retention, including dealing with the both the challenge and opportunities presented by an aging population. By contrast, the U.S. lacks any systematic worker-retraining program in an age of drastic technological change.

Efforts to Capture Economic Value:

•    Manufacturing. U.S. is losing competitiveness as a location for new investment in advanced manufacturing capacity, even in industries where the U.S. is at the technological forefront, driven in part by national policies. This continued erosion of America’s high-tech manufacturing base threatens to undermine U.S. leadership in nextgeneration technologies. Major U.S. trading partners understand that a domestic industrial base that can produce advanced products in high volumes is integral to maintaining global competitiveness in innovation and next-generation technologies. Nations and regions as diverse as Germany, Japan, Taiwan, and South Korea are showing it is possible to remain successful exporters in advanced manufacturing despite relatively high labor costs. The U.S. high-tech manufacturing base, by contrast, has deteriorated to the point that it is sometimes difficult to manufacture in high volumes the products that are invented in the United States —even when labor costs are not a major factor. While many other nations support high-volume manufacturing with tax holidays, grants and credit, U.S. federal incentive programs have short time horizons, limited scope, and uncertain future funding prospects.

•    Translational and Applied Research: In a time of intense technological change, large, well-funded public-private partnerships such as Germany’s Fraunhofer-Gesellschaft, Korea’s Electronics and Telecommunications Research Institute, Taiwan’s ITRI, and Finland’s Tekes have proven remarkably successful at helping domestic manufacturers translate new technologies into products and production processes. Although the U.S. has many applied-research programs, we lack a systematic institutional focus on developing manufacturing



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