moved to developing countries where labor and engineering are cheaper. In solar, however, the leading producer, Germany, is a developed country in which direct-line and engineering wages are as high as or higher than those in the United States.

The close tie between R&D and manufacturing also has different consequences in the three cases. In the case of displays, the close tie led U.S. firms to collaborate with foreign manufacturers to remain at the cutting edge of innovation. In the case of solar, the close tie between R&D and manufacturing means that R&D occurs largely in the same country as manufacturing and has enabled U.S.-based R&D and manufacturing of thin-film technologies to remain dominant. Finally, in the case of optoelectronic components for communications systems, the close tie between R&D and manufacturing led firms that moved manufacturing overseas to abandon monolithically integrated technologies. As a result, monolithic integration continues to be dominated by private firms that remain in the United States.

Those differences yield different policy implications for each industry. In the case of displays, government policies preventing firms from collaborating with foreign enterprises (such as might exist as stipulations for certain work with the Department of Defense [DOD] could have a negative impact on innovation. In the case of solar, the dominant position of German-based production suggests that developing countries may not be the site for cost-competitive manufacturing. The dominance of patenting and production in thin-film technologies by U.S.-based firms suggests that the United States may have the opportunity to be a leader not only in innovating but also in the next generation of advanced solar manufacturing. Finally, in the case of optoelectronic components for communications systems, government and venture funding of small and medium-size enterprises pursuing next-generation monolithically integrated technologies may be critical to overcome the gap between current market demands and longer-term markets in computing and biotechnology that may require the low-power and smaller form-factor performance offered by monolithically integrated solutions. Those differences highlight the importance of avoiding a single-blanket policy for all of photonics. Instead, it is essential to engage technical and industry experts in policy development to exploit their contextual understanding of implications and possible outcomes.

ADVANCED MANUFACTURING IN OPTICS

This section discusses advances in manufacturing technologies in optical component and optical systems production, which have experienced considerable progress over the last decade. Technologies that were considered innovative a dozen years ago have undergone significant evolution and are now found in operation in many optics manufacturing firms. Improvements in generation, finishing, assembly, and metrology technologies are being leveraged to generate higher-performing optical systems and push the upper end of the precision scale. Many of these systems



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