Biden Issues “Made in America” Executive Order on Government Funded R&D

On July 28, 2023, the Biden administration issued an “Executive Order on Federal Research and Development [R&D] in Support of Domestic Manufacturing and United States Jobs.” The policy outlines a wide-ranging set of objectives related to R&D that has been publicly funded by the US federal government, and proposes a series of initial deadlines for executive agencies to submit plans to meet those objectives.

Above all, the executive order focuses on making sure that as much US taxpayer-funded innovation as possible remains within domestic borders as it moves from the lab to the factory. The order essentially covers all IP that has been bolstered by US government funding, and touches especially on such R&D gains made in the latest emerging technologies.

Despite its comprehensiveness, the policy can be expected to have the most immediate and lasting impact on advanced manufacturing processes, as these have the utmost strategic priority relative to the commercialization of all the other emerging technologies. As Section 1 of the document notes, prompt fulfillment of the requirements laid out in the text will be integral to the success of virtually all of the Biden administration’s major policy initiatives thus far. And implementation of the core framework suggested by the executive order is a prerequisite towards ensuring that the domestic US economy is made the primary beneficiary of publicly-subsidized R&D:

“My Administration has prioritized support for our unique innovation ecosystem by reinvesting across sectors in [R&D], demonstrations, education, and the necessary infrastructure to accelerate the transition of discoveries quickly from the lab to the marketplace. …Therefore, it is the policy of my Administration that when new technologies and products are developed with support from the United States Government, they will be manufactured in the United States whenever feasible and consistent with applicable law.”
Section 3 of the order is perhaps the most significant portion, encapsulated by this sentence: “These agency heads [most of the cabinet-level secretaries as well as the heads of NASA and the National Science Foundation] shall also consider how their respective agencies’ R&D funding agreements support broader domestic manufacturing objectives, including the development of production facilities and capabilities broadly supportive of United States manufacturing, as appropriate and consistent with applicable law.”

Since the policy in its initial form includes so many recommendations for future actions that the relevant agencies involved need to take, the executive order’s full implications will be difficult to assess until the arrival at some of the deadlines mentioned above. For instance, Section 4 (g) states, “Within 180 days of the date of this order, the Secretary of Commerce…should develop common invention utilization questions (utilization questions), allowing agencies to add agency-specific questions.” The various deadlines of this nature extend to two years after the executive order’s issuance.

Basically, though, the crux of all of these objectives/deadlines is to (1) streamline across all agencies, the process by which the US federal government tracks what’s being done with the IP that it either partially or wholly funds, and (2) to implement that process in a way that optimizes the impact of government funding on American domestic manufacturing ecosystem and workforce. Considering how slowly the US government tends to act in making changes of this nature, the executive order is calling for a transformation to the federal bureaucracy at a pace that has occurred as a result of perhaps just two prior pieces of legislation, the 1947 National Security Act and the USA PATRIOT ACT of 2001.

At the same time, the executive order can only require that these changes happen so quickly because of the Biden administration’s aforementioned major 2021-2022 policy initiatives that were approved by congress, including the Inflation Reduction Act, Bipartisan Infrastructure Law, and CHIPS Act. It should also be noted that existing US laws already place similar domestic manufacturing stipulations on federally-funded inventions.

According to critics of how those laws are typically enforced, however, the current regulatory regime is far too lax about granting waivers and facilitating other exceptions that ultimately allow taxpayer-funded IP to lead to manufacturing growth outside of the US. In June, 2023, Senators Tammy Baldwin (D-WI) and JD Vance (R-OH) introduced a bill called the Invent Here, Make Here Act of 2023, which addresses the same set of issues at the focus of the Biden administration’s executive order. (Baldwin also introduced a version of the bill in the fall of 2022, with co-sponsor Rob Portman, who Vance succeeded in the US Senate.) With congress about to break for August recess, the administration could be attempting to get out in front of the issue with its own preferred way of doing things.

Although the policy is a reminder that government funding always comes with strings attached, the successful implementation of the order should generally only mean upside for the US additive manufacturing (AM) sector. All of the elements were already in place to encourage accelerated reshoring, and this latest policy signals the arrival of the teeth that can truly enforce that foundation.

If I had to guess, then, the gist is that now the government will have enhanced leverage in twisting the arms of businesses that have enjoyed public funding, so that those business will be inclined to think domestically. It will no doubt be a messy and contentious process, but the long shot, AM-driven revitalization of the US manufacturing sector is about to look a whole lot more realistic.