Manufacturing Ecosystems and Keystone Technologies (Text Version)
This is a text version of the Manufacturing Ecosystems and Keystone Technologies video, originally presented on March 12, 2012 at the MDF Workshop held in Chicago, Illinois.
Lauren Culver, Special Assistant to Program Manager, Advanced Manufacturing Office (AMO)
Kelly Visconti, AAAS Science & Technology Policy Fellow, AMO
DR. LEO CHRISTODOULOU: I would like to resume our meeting and welcome everybody back. Those of you who are here and those of you who are joining us on the web. For the next part of this day, we are going to share with you some of the thoughts we have, some more details, in terms of the execution. Remember, our objective is to get something done. We just want to get something done. We just don't want to have talk here, we want to move forward and execute something.
So, I have asked Lauren, Lauren Culver who will be coming to the podium in just a minute, to share with you some of the thoughts that we have on the ecosystems that we're trying to develop and after that we will talk a little bit about some of the, perhaps, the important, some of the examples of technologies that you should consider. And these are examples. And so, Lauren....it's yours.
LAUREN CULVER: Good afternoon everyone. Like he said, my name is Lauren Culver. I'd like to thank you personally for your participation today. This is an extremely valuable opportunity for us to share with you where, what we're thinking, directions that we're moving and get some real critical feedback on what we're doing right and where we can improve. With that in mine, as Leo said, I'm going to talk a little bit about how we're envisioning manufacturing ecosystems, what we mean by that, and then Kelly will speak a little bit more in detail about what may be the technology focuses could be of the Manufacturing Demonstration Facilities.
So, we spent the majority of the morning in talking about Manufacturing Demonstration Facilities. We think this is really critical component of retaining and regaining competitiveness in the global economy because we know it's very important that businesses and their suppliers have access to cutting edge technology and really role the class expertise around that technology. But as actually came up during question and answer time, there are opportunities to leverage and to build kind of industry clusters beyond the formal activities that can happen within inside the MDF's. So, when we talked about MDF's we talked about some core actors that could play what activities that may be engaged in. And then other actors came up and you asked about universities, what about the role of R&D. What about different other federally funded activities that already exist. So, I'm hoping that in this short section, I can give you a little bit of an idea of where we are thinking in that space. And, as well, to kind of tie it to the earlier morning's conversation about, you know, these innovative manufacturing institutes. We focused on this MDF. We know that a lot of activities could happen around the MDF. And the institutes may be a way to kind of formalize those collaborations that may have otherwise happened opportunistically and organically. So from there I guess I will dive in.
I imagine many of you are familiar with the idea of industry ecosystems, industry clusters. This has been a common kind of academic field for the last several years and a lot of agencies have done work to stimulate activity in that area. At the heart of the ecosystem model, the heart of the cluster model, is businesses and other actors with a common industry and a common goal acting in their own individual interest but acting in a way that benefits the industry at large. Typically these are geographically concentrated because of the opportunities for different synergies. Your observation has shown that these clusters can make businesses involved more productive, more competitive as well as driving innovation in the field and simulating new business in the field, and those are all certainly goals of our broader work. So, what we're hoping is, whether formally in an institute or informally in, around these MDF's, we can build on the physical assets and the expertise that's housing in the MDF to affect the activities of a broader range of stakeholders.
So, getting to those stakeholders, and we have a few listed on the slide, the reality is that there are many. Many different stakeholders with many different responsibilities, core competencies and, has been a little bit of a theme today, you tell us what makes sense. Different technologies are in different stages of maturity. Maybe supporting many industries may be specific to one industry, maybe more science focused. Depending on that, we are aware of the fact that maybe what you propose, the model will vary accordingly. We expect that to be reflected in the stakeholders that are involved and the focus, the relative weights of activity that each of the stakeholders is engaged in and, similarly with the activities that they do. Like I said, I can give you a laundry list of stakeholder that we thought of but you know your regions, you know your industry, you know your technology, so don't ever feel that we are limiting you to what good ideas we would like to see.
So, certainly educational institutions play an important role, whether this is community colleges, or universities, there is an important element there in training the next generation, as well as the university role and perhaps the role of federal labs and other private research institutions. To bring ideas to the MDF to the ecosystem, we realize a lot of the R&D in science and kind of ground breaking innovation in that sense will come from the places that they are already coming from, places that are already doing a good job with this. Thinking about what is the role and how you would transfer those activities into the MDF when they are ready to go on to the next stage. We see a lot of involvement from industry of all kinds. Small companies, large companies, designers, suppliers, assemblers, you name it, whether they're making a product, whether they're doing the tools for the process, these are all an important network of companies that we think can only be more competitive if they're communicating and working together towards a common strategy.
Also an important role for financial institutions. Perhaps for supporting start-ups, maybe for other things but they are certainly an important role...for capital, we don't expect there to be necessarily huge sources of capital in the MDF but we would hope that the MDF knows how to reach out to those organizations as appropriate.
We see an important role for state and local agencies. DOE can't pretend that we are experts in a lot of these other areas where we have the Small Business Administration, where we have the Department of Labor and so, to the extent that they have already set up regional centers, we're happy to see those leveraged and really brought into the advanced manufacturing message. We found in some of our interactions with them, that they want to be engaged in advanced manufacturing. They realize it's an important direction for the country and for the economy and they don't necessarily know the vocabulary, know how to be engaged and so, what is the role of the MDF, trying to educate those kinds of state and local institutions to really be able to be helpful for the companies and the MDF and the goals of the MDF at large.
We can imagine a lot of different professional service providers of all kinds, lawyers, accountants, people that have particular skills that will be needed for your industry cluster. There are also a host of other non for profit organizations and other things, like I said, it's a little, I hesitate a little to make a list because I will forget someone. But, if it's important to your industry, if they have a play, to be made in a way that focus on their core competency, on what they do well for the benefit of everyone else in the cluster. We are certainly open to hearing how they might be engaged in this.
So, with those stakeholders in mind, we can also think about what area their range of activities that are outside the MDF but may be helpful to advancing the individual or corporate goals of those involved within the MDF. These can be technical activities; we think these can be business related activities. We see a lot of opportunity as well in workforce, which has been touched on some today.
So, in the area of technical, as you read up, I think earlier in Q&A we do think there is an important role for research and science and in some cases maybe that isn't appropriate for work inside the MDF but is complementary and can go on in existing universities. So, there is something about how that work is then linked.
Other kind of efforts in supply chain development, supplier relationship building, pilot deployment and demonstrations, full scale kind of deployments, just the learning that can happen if that's all occurring in a particular region.
On the business development side, there are a lot of organizations, business incubators, business accelerators, other types of business counseling that's provided to small and medium enterprises, so what's ...maybe the role of bringing them up to speed on the advanced manufacturing message, on the particular goals of the industry or technology around which the MDF is focused. Also, we see an important role for start-up companies. It's not only existing small companies, it's may be suppliers or it may be actual manufacturing technologies but also something about supporting new ideas and translating them into new companies, either to serve existing markets or to serve new markets.
In the workforce space, we see a couple of really interesting opportunities. It's kind of repeated over and over right now that really whether the US has the greatest opportunity to improve is, is a workforce that is innovative and plugged into the advanced manufacturing possibilities. We see a lot of opportunity, especially for community colleges to be engaged on this front. A lot of manufacturing is local when we think about the cluster, when we think about an ecosystem, the particular manufacturing requirements for the workforce may be different and so what role can a community college...has a more local focus...play in this. Also, in the opportunities for hands-on training and experience for undergraduate and graduate students, how they come and work in the MDF, maybe through fellowships or internships or other mechanisms, can go to and have experiences in other companies working in the MDF and around the MDF. A lot of exciting opportunities around that.
Finally, on the workforce space, thinking about retraining of existing skilled workers, veterans that come back with a variety of skills that can be redirected for the advanced manufacturing purposes of the particular cluster around the MDF. Really, kind of a breath of opportunities there and activities.
To reiterate again, we expect that, depending on the technology focus, depending on the stage of the technology and what you're really pitching and think is best for your region, different activities may be more or less focused on, more or less important and we certainly will be open to you convincing us that that is the case.
Two other elements that I think are important and you know in a sense we've tried to reflect in some of our conversations, about cost sharing is the role of industry, the importance of having a very strong industry presence in the direction of the MDF, in the direction of the cluster. Our reason beyond that is more than just leveraging federal dollars, it's also about keeping our fingers on the pulse of where the industry needs to be going, knowing that it's the life blood of companies, of small businesses, of large businesses to know what the market wants, to know where it's going, whether these customers are global or domestic....or local, perhaps government customers, industry really has the best vantage point to be able to make sure that the MDF and the work of the cluster is relevant, is meaningful and is going to advance the goals that we have for competitiveness in the US. So a lot of the motivation behind wanting strong, wanting this cost share from industry is kind of an indication of their involvement and commitment so we can be sure that the investments we are making are going in the best direction.
In a similar vein, we think about the role of state and local government. We pay a lot of attention when states are joining in on the endeavor, just seeing their awareness, gives us hope that other things that are within their control are also falling in line to support a general business climate that's favorable for whatever it's trying to be established regionally.
Two other important elements to bring into the message is how these kind of important stakeholders are really influencing and maybe the opportunity is in leadership. So, how are these organizations really setting a vision and leadership for the work that's going on in the MDF. A lot of the work in the MDF could be further benefit of an individual company, maybe a consortia of companies and certainly that is a good thing but there may be an opportunity within a larger ecosystem to really show leadership and direct the whole group together.
So, maybe kind of to close here. We've had some questions about the model, what is it that we are looking for? Would we expect a formal industry consortia or maybe several industry consortia, if the technology is kind of a platform technology. Do we think it should be distributed? What if there is a university that has a great capability or a national lab with a really big piece of science equipment that is not in your region but is critical. There are many models. Again, it's based a lot on what your technology is. Who's playing in your sandbox and things like that. So we aren't, we don't , we're not lying, we don't have a model in mind that we are secretly hoping that you will tell us. We want to see what makes sense and how do you make that case.
With that said, if there are those of you that may be unfamiliar with kind of what I've been talking about, ecosystems and clusters, there is a lot of work out there that's come out in the last couple of years by thought leaders on this topic, both from the academic community and a variety of think tanks. So there are a lot of models that have done and have been successful in parts of the country as well as the world, and a lot of models that have been proposed that maybe are a good idea and just hasn't found the right technology to bring that together.
With that, I will thank you for your attention and should I save questions until the end or do you want ...okay?
KELLY VISCONTI: I'm glad I didn't eat too many cookies at lunch that would have been hard navigation back there. Exactly. Sorry, no, there were no cookies, no cookies. It's a metaphor; I like cookies, dessert.......
Okay, so the moment we've all been waiting for, we've been talking about these keystone technologies, I've been dangling that as a nice carrot to stay to 2pm to listen. I know this is a rotten time of day, post lunch....people on the web, more power to you that you're still hanging in there. That's awesome; I know six hours on the web is a long time.
So, before we talk about keystone technologies, I just want to make a little comment on....I think Leo missed his calling as a biologist because some of the programs that Leo has sponsored in the past have really looked to biology for inspiration and we're going to do that, again, here and the idea of keystone technologies. Okay, this should work, okay; video is not going to work on this laptop.
So, let's pretend you can see this thing running on a treadmill. This is the cheetah. It is a legged robot that was developed under a DARPA bio-inspiration program and it got up to 18 mph on a treadmill. It's a pretty cool thing. You can see it on the web, if you go to You Tube you can see it, it's by Boston Dynamics, and you can see all the different kinds of legged robots they've got going on. The idea of using things from nature, it's not exactly a new concept but we have a specific piece of nature in ecology that we are going to talk to.
So, let's talk about manufacturing ecosystems, the techno-economic systems that they are a part of and how they are similar to biological systems. Many individual organisms interacting with one another or many individual firms or governments interacting with one another....and it's really about this flow, and Mike said it very nicely earlier, it's the supply web, much like the food web in biology and ecosystems. They're transferring, whether its carbon and nutrients in the ecological world or if it's money and resources and information and technologies in sort of the manufacturing, techno-economic systems. And there are similar dynamics to optimize both. So, you want to use things the most efficiently that you can in either situation so that the overall system benefits.
So, there's an idea in biology and ecosystems around a keystone species. This was first sort of created in the late 1960's by, hold on let me get his name right, Robert T. Payne. He was a zoologist at Washington State and he was trying to describe the interaction between certain species in the bay near there and it was talking about starfish and the presence of a small number of starfish have a dramatic impact over the number of species that exist in the ecosystem. So, when you have starfish present, you get 15 different species. This is what he found in his report. But when you take the starfish away, so they cleared an area of the beach, kept all the starfish out, over time they found they had only 8 different types of species. So, starfish, he coined the term, keystone species. So whether or not you have these certain types of species has a dramatic impact on the diversity of the system. You can kind of see it on the picture on the left. That's a kelp forest, got a lot of fish, lot of life, everything is going well, on the picture on the left. It's actually called an urchin barren and we'll talk about why it's called an urchin barren. But the main different between these two, and these entirely different systems, you can see on the one, it's extremely rich and abundant and the other one is pretty much barren and desolate. And the main difference between the two is this little guy right here, the sea otter. The sea otter is also a keystone species.
So, we're going to talk about why the sea otter is a keystone species and I'm actually going to talk about technology, not just biology, I promise. So, just give me one more slide to do this. So, sea otters, they really love sea urchins. It's like their cookies. They love them. So, when there are sea otters present in an ecological system they control the population of sea urchins. Now sea urchins themselves are kind of piggish and they eat a lot of sea kelp. So when they eat all the kelp, there's nothing left for all the other organisms to eat. Right? So, the sea otter is a keystone species in that when you remove the sea otter, similar ecosystems, like the picture we saw before, sea urchins are abundant, they're everywhere and so they eat all the kelp and there's nothing left. But when you have the sea otter present they can control the sea urchin population, kelp is abundant, other animals, other organisms grow, and you get this vast diversity of species. So, it's not just the diversity but the overall robustness and abundance in the system. The energy available is a lot more.
So why do we care about sea otters? If we use this as a metaphor, and it's not a perfect metaphor, but if we use this as a framework, a way to sort of look at technologies within a supply web, what are those sea otters? What are those keystone technologies that have a disproportionate effect on the supply webs that we are talking about? Knowledge about their abundance. So it's not necessarily kelp, it's not the ones that are everywhere that are present all over, it's those really targeted keystone technologies that can make a huge difference relative to how much they are available in the system.
So there are a few things we've tried to tease out in this analogy to give this metaphor some legs. So, keystone technologies have to do a couple of things, right? They have to effect the organization of the system. They have to affect the diversity of the technologies in the industrial base relative to other technologies. So, we saw the impact that sea otter had and the number of species, the starfish, the diversity, the actual structure, the organization, the number of different organisms interacting, right? So that's a key aspect of it.
Then the second thing around this, this is more technology based, but that it's a sustained market driven adoption once you've hit those performance and price targets. So these technologies stand on their own. They don't need government subsidies forever to be competitive. That there's actually a market need and a drive to adopt them. That they're transformative and/or broadly applicable. So there's two different things there. The transformative aspect is you just saw the different between the kelp forest and the urchin barren. That's transformative. That's the power of the sea otter. So that's what you're looking for, something that's complete game changing. Or the other aspect, being that it could be broadly applicable, in that sea otters also interact with other ecosystems and are a part of other food chains and other food supplies. So there's a multiplying effect in terms of the number of systems in touches.
So what would be the impact to the ecosystem of an MDF technology, a keystone technology, that would be proposed, that could be proposed? So, if we look at sort of these four buckets around organization, diversity, sustained, market-driven adoption and then the transformative nature of them, some aspects you would look for is the ability to support, as we've talked about before, US competitiveness, contributions to GDP, increasing the manufacturing base, domestic manufacturing base, increasing the US exports, altering the supply chain, as well as contributing and supporting the agency missions. So the Department of Energy, clearly around the life cycle energy intensity and greenhouse gases missions of processes and products. So, from cradle to cradle, how does this technology impact that system?
So around the diversity aspect, again, what's the ability of this technology to create new products, new processes and services, and new companies around that? How does it create entire new ecosystems and lead to technologies that build upon them, you don't necessarily intend. So what's the unintended consequences in a positive way, of the technology? So that's what leads to the need for an advanced workforce, creating new jobs, higher wage jobs as we've talked about a couple of times.
In this last piece, this third piece here, again, around this demonstrated need for the technology. Somebody wants to buy it, it just maybe costs too much today, where the quality isn't quite right today. But with a three to five year, ten year horizon you can really get to it and it has a major impact on market adoption.
So, transformative, again, we talked about or cross cutting again applicable to many systems in the supply chains.
So, a couple of examples. Take a few examples looking across of the interests of the Department of Energy as well as the overall US economy and what are our strengths. There are a few things that kind of stand out and for different reasons and sort of they all fit this same sort of criteria but maybe have strengths in one more than another but they all sort of seem to have these element that we can break it out into.
So, if we look at wide band gap semiconductor materials...what's the impact to the organization of why band gap semiconductor materials and their improved increase and use in different products and technologies? So, overall they increase the energy efficiency of devices in systems, in general, when they are put in. So they have an impact not just to the individual device but the overall component and device application that they are being used in. So it's enhancing an existing US based industry. So we do have some of this technology here, it's just a matter; it's also about growing it and making it more strong and robust. So this impacts the organization, the meeting DOE goals, meeting USG goals, meeting those US competitiveness needs. So it's about diversity as well. So we're expanding the market applicability of these materials and others that may fall into a similar category by lowering the cost, maintaining that high level quality control as necessary for them to be successful and have the performance criteria that they need. You have this complicated manufacturing process and so it spawns all these other needs. You need high tech metrology equipment. You need process control. You need a trained workforce that knows how these things work. It can't be easily separated. The process is absolutely integral to how you make the material and then the end quality of the material that you are making.
So there's an existing market for silicon based devices. There's an existing market for these devices already, in particular high temperature, high performance needs because they can afford the costs so they have specific needs around these materials and their use that justifies the higher cost. But if you bring that cost down, you then open up a whole new market that they don't have access to today and there is an existing need for these types of technologies as is evidenced by the different types of silicon based technology devices.
So, again, transformative. The wide band gap materials have step chain property improvements, I mean they are massively more efficient and have better properties over the traditional materials that are used. So you're talking about transformative over current state of the art. They are applicable to many systems and supply chains. I have a nice little picture in the next two or three slides that will kind of show you what the impacts are. They are used in a lot of different devices and could be used in so many more if the cost and quality was there.
So that's much more of a material and product based approach. So, if we look at something more around a process. This is biomanufacturing. It's a very big word. You can use it to describe a lot of different things. But, in general, you have two or three different major ways that you could do this, through fermentation, through biocatalyst, through photosynthetic roots. In the end, you would have to pick one or two, whatever makes the most sense. But, in general, how biomanufacturing effects the organization structure of this supply web is that is has a lower energy intensive production method. So, in general, they have over the life cycle, lower energy costs for making the products, lowering greenhouse gases and they can be based on renewable feedstocks. So, again, we're building on an existing US based industry. We're doing this today, already, for a number of products, pharmaceutical companies use this extensively for manufacturing drugs and it's used in other technologies as well. Making plastics and other bio-based, aside from fuels, other bio-based chemicals.
So, again, applicable to a range of industries and has even bigger potential. I mean, really, what you can do with biology is pretty unbelievable. Again, a complicated manufacturing process, closely coupling the manufacturing itself with the quality of the final products. So it's really hard to separate them.
You're getting a theme, right? We've got one more, don't worry.
Sustained market driven adoption. The existing products that are made in the more traditional chemical routes are in huge demand. These are high volume chemicals we're talking about. And so there's clearly already some market need for these things and new technologies and new products that you are going to make in the end. So, these are longer, biology takes a long time. So you have sort of longer development cycles to get the biology right. It takes a longer time to develop the process and, again, there are high quality control needs.
So we're looking, again, at transformative, cross cutting, sort of technologies around the chemicals industry, transportation, health care and many more. It's also used in waste water treatment, in some ways, if you look at it that way.
So the last one we'll talk about, again, as an example of a way to look at these technologies through this framework of a keystone species, or keystone technology. So there are a couple of challenges with carbon fiber composites but if we look at the compositing piece of it a large part of it is the energy required to actually form the final material. So if we can look at ways to lower the energy intensity using (inaudible) techniques or other techniques including automating, inline measurement devices, you have a way of lowering the energy intensity, lower greenhouse gases, lower cost. The early industries that would benefit from these lower costs carbon fiber composites are US manufacturing strengths. The aerospace industry already uses it extensively, creates a demand for it, but would have additional uses within those components to use it. Automotive, automotive has a huge potential to use these types of materials. Light weighting vehicles, improving the gas efficiency, huge opportunity. And, wind power, as we make bigger blades making them lighter and stronger, all potential uses for lower cost carbon fiber.
So, again, it's applicable to a current range of industries and has, really, an unlimited potential. In some ways, you can make almost anything out of it that have those needs for certain specific properties. Again, a complicated manufacturing process requiring a high level of control, if I sound like a broken record, I hope so, that was the intent. You can't take away the process from the product. It's connected, they're linked together. So there is already an existing market and the replacement potential is also very high. Again, limited by cost and time to develop high quality control needs, automation needs and they could be transformative technologies, new ways of making these composite materials.
So if we look just sort of graphically at them, you kind of get a sense of the diversity that these could impact. You have LED's, which are a huge potential, offering a more energy efficient lighting. You have all sorts of power electronic devices, switches, non-laser diodes. You have your blue-ray discs, everybody loves their blue-ray. Solar cells, converters, I mean the applications are really enormous and cross cutting in so many different ways.
So there's a large market for things in the biomanufacturing arena, playing to these strengths, playing to these big markets: chemicals, health care, transportation, and, again, carbon fiber composites. Playing to these US manufacturing strengths around aerospace and automotive and the wind power industry. Transformational and cross cutting.
So a few more that in the course of our discussions sort have come across the table as potentials, and again, the (inaudible) examples and sort of breaking it into the way that you could look at it in this keystone framework and what that would look like. So, low cost titanium or other low cost metals, variety of uses in aerospace, again, automotive, industrial applications, desalination. A huge cross cutting need in advanced separations, whether those are membranes or lower cost ionic liquids, which have potential. In the chemical industry, in buildings, oil and gas, water or waste water treatment, really, separations are used in so many different industries and processing.
This is a really big one...I think in-situ metrology and process controls, nearly every industry could benefit from improved process controls, better measurement devices. So the joining of disparate materials in aerospace and automotive, how do you make things that are completely different stick together?
So, some natural gas technologies. Clearly, we now have a very competitive stance with natural gas and how can we leverage that to do different thing with it, besides just burn it, but obviously, that is a huge potential as well with CHP. How can we use it in the chemicals, metals, transportation and buildings industries?
And another one I think is pretty critical, and cross cuts a couple of different things, power metallurgy, and how do we actually work with metals and be really good at that because that impacts so many different things...automotive, in the wind industry, industrial motors, related to making new magnets and how we make these new magnetic materials that require less material or completely new technologies. How do we make them low cost and automated and extremely high quality?
So here you are. What are the sea otters out there? Giving you a couple that we think are possibilities, kind of tried to lay out a framework of what we think a keystone technology would look like or kind of have a feel for. So this is the question. What are those keystone technologies? What are the ones that are transformative and will have impacts large than their abundance? So how can we invest in one technology area that will have a dramatic impact across multiple supply chains? How do we leverage that investment? How do we get the most out of what we can do given Leo's comments before, there isn't infinite money? How do you find those ones that really can make a big impact and transform entire ecosystems and supply chains?
I think that's sort of that. Literally, we can take answers to those questions and then anything else that you have, that we haven't gotten to today.
DR. LEO CHRISTODOULOU: What did you hear that you liked? What did you hear that you did not like? And what did you not hear at all that you wish you had? I mean, I think those are important questions to ask. And the answers to them are very important to us, very important indeed. We'd like your input into this. We've shared some of our thoughts, more or less were unanimously arrived at, our thoughts. But there was a lot of debate in our organization and our colleagues in other USG departments. Nor do we expect that the lists of technologies and capabilities that you heard are the definitive ones and prescriptive. They are examples, as Kelly tried to tell you. Part of what we would like, we have another room here, so if there is a group of you that wishes to go to the other room and sort of try to identify where this technology, where these keystone technologies might be, and you want to participate in that discussion, we welcome you, we will do that. If you want to stay here and have a question and answer, we can do that, too. We have about an hour left, I think, and in that time frame we would like to entertain as many questions. If some of you, if we could have some answers to these three questions from you, I would certainly appreciate it.
LAUREN CULVER: If you would like to write your answers to those questions on the notecards that are there and just drop them off at the end of the day rather than project it here in front of the microphone, we're happy to take you input that way as well.
DR. LEO CHRISTODOULOU: Yes, if you want to really say that you totally dislike this and you don't want to be named, you know, please them anonymously. We will still value those comments and don't feel like you have to do that.
Q: Very innovative approach here, so I applaud that effort. I can think of a lot of things you can do with natural gas. There's gas to liquids, gas to solids, natural gas to other gases, does this fall within the purview of these advanced manufacturing demonstrations?
A: Yes, it does. Yes, it does. I want to be quite clear. Within the Department of Energy, within EEIE, especially, we will have joint programs, manufacturing programs, with, the fossil program, for example, potentially, the buildings program, in fact we have a solicitation out, I think. It is out, correct? A solicitation out, jointly with the buildings program, where the buildings program , the Advanced Manufacturing Office are collaborating on manufacturing. We expect to see right across the entire DOE system that way. So, yes, certainly agree. And clean coal technology, and so on, all that.
Any other questions?
Q: Could you go back to that one slide that showed the last one that had your little clusters? I think this one is great. It shows that the center, essentially your MDF's, I think that one's a great one. It surprised me because I'm really interested in the lighting piece. So that wide band gap materials cluster looks really intriguing. Is there an opportunity for us, those that are interested in that cluster, to have any conversation here today?
A: Absolutely. I mean that's one of the areas, depending on the interest of the group we have, the rooms where we had lunch, so you can cluster there for a little bit. The other room in the other corner and, of course, in here. So, self assemble and those of you that are interested make it happen. We try not to be prescriptive here but we would like to hear your views on some areas that, perhaps, we missed completely. That you think, heh, you completely missed out on. I can't think of one right now.
Q: Heard a lot about hardware, less about software. Certainly in the Institute of Meteorology there is a lot of software involved, there's a lot of software on the backend of a lot of these but where does software do you think fits into this, in the the broader scheme of things?
A: It does fit. You do have an issue, at least with me, that I'm an engineer so I'm a materials engineer so that (inaudible). But software is a key part of it. The so called, the communications infrastructure, perhaps, and the above the shop floor technologies...we talk often about keystone capabilities not necessarily technologies and those capabilities could be in the soft domain, as well. But innovative capabilities that just, for example, I can think of parallel computing, programming for parallel processing, you know efficient processing like that, you know that's , what if we made that more accessible to everybody? Maybe the core was something about parallel computing and the efficiencies that may come from that or massively parallel computing, super computer, whatever that might be, and how that could be applied to manufacturing, for example. How tough manufacturing programs could perhaps be done. That would be of interest. That could be a core technology, clearly, clearly. Maybe 3D visualization technologies. You know, it's hard to know how this would be different from the gaming things and some of the work that is being done at DARPA, for example. As you know, DARPA has a very large program in the adaptive vehicle making. So, clearly we would not want to sort of fund things that other agencies are funding but there was no intent here to push those technologies or capabilities off the stage.
Q: I also like this slide of the clusters.
A: All credit to Kelly. She created it.
Q: I want to emphasize on the wide band gap materials, it's so important, it is the semiconductor for this century and energies, like information from the last century. So my question to you is, we have economic players, we have some small industries...you know, the President talked about reviving the auto industry but most of that money went to GM and GM became number one. So, we don't have, other than (inaudible) we don't have anybody else in that area, at this point. So how are we going to build an infrastructure? I want to go back to that question. You know, it's 100 million dollars probably is not going to do it. It's several billions of dollars to build that industry. So you have any plans, thought about?
A: So, so we don't think we can start the industry, I think that we can nucleate it. I'm hoping that we can help to nucleate it. I'm a materials science person so let me give everybody a materials science reminder. You know, when you transform from one phase to the other you invariably never go directly to the equilibrium phase, right? You go through nucleation phase, you go through a transition phase that enables the final phase, the equilibrium phase, to form. And what I'm hoping is our investments act as a nucleus, act as a tipping point that enables the industry to take over. I came from DARPA and DARPA took credit, a lot of credit, for the internet, the DARPAnet, that became the internet. But in the end really, vastly more money was put into the internet by commercial companies and other players, other than DARPA. But the nucleation of the communication between the four computers, one at NRL, one at Stanford, one at CalTech, that initial communication was the nucleus. I think that's the kind of thing we are looking for here. The nucleus that starts the ball rolling and we hope that all of industry with it's (inaudible) and will fund it... But we do need to sort of nucleate it. We need to take that risk out, we think that's a public, it's for the public good, it helps the whole nation and I do agree with you that some of these technologies, and I don't know if it's just them, these and others, would represent the new industries of the future. I spoke a little bit about the aluminum and how that particular innovation spawned a very successful American company, Alcoa, which one hundred years later is still doing very well. That's what we're looking for, and many others, by the way, not just that one and all the people that go along with it. I think we can, in fact, by investing relatively small amounts of money, whether it's 100 million or whatever, we can get the ball rolling and that's really the function. We cannot fund everything and we certainly not be able to fund everything. And certainly we will not fund commercialization because that's an industry mission, that's not a government mission to fund the specific commercialization.
Q: It seems like we've got a very unified national effort right now, everybody's focused on manufacturing from the administration all the way down to local farmers. I'm assuming that unified effort is what's allowed DOE, DOD, DO everybody to change their program slightly to focus more on manufacturing and more feet on the ground, boots on the ground technologies. I wonder if you have been given similar latitude to how you are going to contract these? So, are we going to revert to traditional contracting methods or are you going to change things and open it up for some, some unique ideas, if you will?
A: I'm a great, great proponent of new contracting and new procurement processes and Congress has given us some, quite a lot of flexibility in that domain. While I was at DARPA, I used other transactions authority quite a bit and those types of instruments allow for federal programs to be, acquisitions to be made, without the full overhead of the federal acquisitions regulations and so on. I have to be honest, though, with you, although we have some of this authority, the mechanisms are not always there for doing that. I mean, we do have a hard time in Washington mixing money with Congress, appropriate money in specific missions and specific brackets and it's not always easy to sort of break down those barriers. I think I would mislead you if I told you we have the full answers. However, there is a great deal of interest from all of us in trying to identify the simplest way of moving forward here to reduce the burden of working with the government. I mean we really appreciate that and we really know about that. For example, we try to, in the one case, a previous case that I can share with you, is that while I was still at DARPA we had a joint evaluation of the open manufacturing programs from DARPA, their BAA from DARPA and it was out of that competition that the particular manufacturing demonstration facility at Oak Ridge was selected. It was a DOD solicitation that we joined up from DOE and did it and there were a couple of other manufacturing demonstration facilities, more defense oriented that were selected out of that. So, we're working very hard to do that. The other transactions authority allows us to engage with industry and institutions of all types with payable milestones. So, you meet a goal and we make our contribution and that is a lot easier than some of the traditional ways of doing things. For example, let's say you're building a MDF, the day the MDF is open, that's a payable milestone. The day that the first machine goes it, that's a payable milestone. You know, it's fixed, so there is no argument. It's very clear. It's business like. It's efficient and, you know, there's no second guessing. It's not in the eye of the beholder. So over the lifetime of a project you may have, I don't know, 12, something like this, 12 major milestones that are payable. So you meet those milestones and you get paid. So, those instruments are there. Probably the hardest thing that we have in Washington to do is mixing money, actually organizationally that is the hardest thing to do. So, we are working on that and we are looking to, I don't deal with policy generally, and that's kind of a policy question and those kind of issues we're trying to work with OMB and other folks to help us solve them.
LAUREN CULVER: I have two administrative questions I will answer and you can look at this one.
Q: Can you clarify that the 30 day comment period regarding MDF's. Is this comment period directed towards the direction of the MDF's?
A: What we meant by a comment phase, that's what we expect as our response to concept papers so it's a DOE practice to have kind of a two stage funding opportunity announcement where, although the whole announcement period is 90 days, after 30 days, we will provide you some feedback and either encourage you or discourage you to submit a full proposal. So, that's what we mean by that. It's actually a comment on the proposal you want to submit not what you think of our program. If you want to give us comments on what you think about the program, that opportunity is now.
Another question about cost share....
Q: Earlier a 1 to 1 or 2 to 1 funding match for DOE investment was mentioned. Does this mean that matching contributions must come from non USG sources or can other USG sources be applied as matching funds?
A: This is one where we have an actual rule to follow. You can never use federal funds to match other federal funds. So when we talk about what our minimum cost share level, we will definitely not be able to allow you to use other federal funds as matching funds. We are working on anything above the minimum being reflected. We may not call it cost share. We may have to call it something else to avoid any other conclusion but we are personally interested in how you might be bringing other resources to the effort but your technical minimal cost share can't be met with that funding.
LC: Indeed and we will clarify all of this in the fall when it does come out.
I would like to read this question because it is a very important question and I would like to get to it and I will come to you immediately after.
Q: By supporting only the industries willing to support with the highest cost share aren't you just aiding the most economically advantaged industry and not the best ideas?
A: Very good question and let me try to answer it. In the context of the MDF and the ecosystems, I think that we look at the cost share as a commitment of a larger group of people to particular pre-competitive area and we think that it requires cost share because it's the only way we can measure the commitment. For best ideas, the very best ideas in terms of, you know, if you have an idea, the MDF is probably not the best vehicle for you to explore that idea. We have instruments like the innovative manufacturing initiative, that was in my innovative manufacturing initiative which was a direct grant between us and you and we'll have opportunities for you to bid your ideas on a one to one basis, if you wish, and for those we have waivers for cost share for small companies, certain educational institutions and so on and so on. So, we're not, I absolutely want to encourage best ideas...I'm not sure that if you have an idea that's so immature that the MDF is the right vehicle. It's not the only vehicle that the Department of Energy and our office will fund manufacturing ideas. But I do take that into account that if you have a best idea, you can always apply to one of our direct innovative manufacturing ideas rather than the MDF or the cluster, excuse me, the institute idea.
Q: Two part question. First about sort of focus and second about collaboration. So, looking at the keystone technologies and understanding that some existing are industry based and the assets at Enro and other federal labs, universities...I can see us submitting a proposal that crossed three to five of these sort of areas. First, how do your counsel on focusing that sort of goal and secondly, how do you counsel towards collaboration with sort of carbon fiber, you know we have assets in wind blades and aerospace but how would we work with sort of Detroit on lightweight vehicles and space (inaudible) and some other aerospace...so how do we integrate these systems and how do we focus them sort of geographically?
A: So, it is true that most states and most universities and most research institutions certainly could apply to multiple of this. Like all of us you have to prioritize. You have to decide which one is the one you want to go for and go for it. Of course, you can apply as many as you wish, you know, we are not going to be prescriptive on that. But my sense is that out of the Department of Energy we hope to have, over the next few years, including this one, four to six of the Manufacturing Demonstration Facilities. We would like to see them in different fields, just for balance, you know. Our colleagues from the Department of Commerce, the Department of Defense will have theirs as well so there will be opportunities over there, as well. So, you know, I don't know. My sense is, decide which is your strongest sort of area that you want to lead and go from there. You can be a participant in others. You don't have to lead them all. You can participate in more than one. We're not going to stop you from doing that.
Now, with respect to your second question about we want to engage the aerospace, you know, the multiple...Absolutely, the, for example, the carbon fiber one, yes. That's one where there could be multiple, there doesn't have to be one simple center of gravity, necessarily. One could be in the northwest. One could be in the southeast. One could be in Michigan and one could be in Colorado. We don't have any problem with that. You just have to tell us how that ecosystem...we have information infrastructure. We are blessed with having an information infrastructure and a road system that can actually move stuff around. A lot of other countries don't do that, remember? That's one of the inherent advantages of the United States is the highway system. So, you know, not everybody has to be in one location. But think about the carbon fiber ecosystem, let's say, if that's the one that you're interested in and just like in the wide band gap materials where we make solar cells or LED's or whatever, it could be different places. I mean, it doesn't have to be all in one. Again, you have to decide which way you want to go on that.
Any other questions?
Q: First of all, I do like the interdisciplinary nature that you are trying to achieve. I think creating a place where that comes together is a really, really great idea. What I am a little afraid of with one or two or three centers, that you're going to run the risk of a big splash in one place and, if it fails or succeeds, the AMO might get a black eye or a shining star. And I wonder if you're better off being more modest and smaller and most focused and then reward those things with increasing funding year over year, if they achieve milestones and if they really produce high impact potential. Just a thought.
LC: Good comment.
Q (continued...) What I still struggle with, that I don't get an answer, is I try to separate the management of a center from the things flowing through the center. I can understand how things flowing through the center can make money and be self-sustaining. I'm not understanding how the management of the center and those that invest in it set up a structure to actually return their investments. So, it's something I'm still actually struggling with myself.
A: Thank you for your comments. I do worry about, as I said being a pilot, being the first one out, we could get a black eye. We could get a shining star and it doesn't mean the next one is going to be good even if the first one is good, I agree with that. I guess my sense is that we have tried, within the greater USG, various different models in the past and this is slightly different and it's worth a try. I'm enough of a risk taker to be willing to take it on and risk that. But I do take the point and I take the point that, you know, incrementally funding multiple things and just sort of just hedging our bets a little bit would be one strategy and we're thinking about that. We're leaning against it, right now, to go with just the one but we will see how it comes out.
With respect to the actual how you get the return on investment, I think it is possible and maybe I am naïve, but I think it is possible for the integrator to make money by acting as a facilitator. A facilitator, I mean a service provider really to other entities. I think there is something to be made there for the operator of the entity, the management operator. Now, maybe you won't become a billionaire with it but I mean, I think there is a services aspect to it that could be profitable in there, if you managed it right. We will find out soon. We will find out soon. We will find out if people are willing to make those investments themselves with a plan of getting a return on investment. For my part, I'm hoping that non-profits and, you know associations and so on, of different people, whose interest transcends the local sort of making a profit locally and it's really more representing the bigger picture of their members or a region. That might be one management structure that would work, that wouldn't have the overt of return on investment necessarily; it would be more indirect return on investment. I mean the Sematech model seems to work pretty well. That's one aspect. And there are other models along those lines. DARPA has a model as well. So, you know, I'm hoping there will be sufficient diversity in the way we fund this, if we have like five or six of this, hopefully. That they will be sufficiently different then after the first 3 or 4 years we'll figure out which model works best and maybe we'll move to that one.
The Von Hofer Center, the German success story is really quite an interesting one. There are some lessons to be learned there. There are some interesting models in England and Great Britain. There are some interesting models in the Far East, now some of those are very heavily subsidized by the government, by the various governments. But they are interesting models; Singapore has a very, very strong model that they overtly fund. There are models out there in the world and we need to find our own uniqueness that balances our independence and our entrepreneurship with reduced government involvement. I don't know where it is yet, exactly.
Q: This question is probably outside the scope of this workshop, but let's say that you fund an MDF for wide band gap materials and it is outrageously successful with all sorts of breakthroughs, what mechanisms are going to be in place to prevent companies from then outsourcing, once again, all the products that are facilitated by all these breakthroughs? Now, I understood the point that you're making, repeatedly, about starting out with a complex manufacturing process that needs to be tied to the product, not easily separated, but then again we've seen with photovoltaics, that's a pretty complicated process. It didn't take long for it to, you know, go offshore. So, what's going to be different or how can we insure that that doesn't once again happen?
A: There are so absolute guarantees. However, we will be asking of the proposers, their plan for making contributions to GDP, because that is one of the evaluation criteria, remember? How will you, because as taxpayers, when we contribute to the establishment of this technologies and their development, we would like to get our money back. We are going to be pretty hard nosed about this. We want our money back with good return on investment. I suspect that over the long term, technology will diffuse and will go overseas. But it's our intention to encourage, I won't use the word demand, but to encourage in every way possible that any technology, manufacturing technology, manufacturing capability that comes out of this, is at least first implemented in the United States and that sufficient return on taxpayer's investment is obtained.
This is a hard question. There are sort of legal, I mean, there are statutory limitations to what we can do, as you know here and we're working to find a policy ground that would encourage people to manufacture IN the United States as opposed to manufacture outside the United States. I think if you listen to the administration that they are trying to enact those kinds of policies. I will say this, again. We understand that we live in a global environment, manufacturing environment and we understand that companies are, the large companies, at least, are global. We want to make it attractive to them to build things here in the United States and I think good examples of that, I mean, we see a number of foreign owned companies that have plants in the United States, BMW, Honda, Toyota, I mean these are companies that originated outside the United States yet export vehicles from the United States. We want to make it profitable and attractive to them to do that here, too. Some of it, perhaps, will go overseas but hopefully the majority will stay here. That's all I can do.
It sounds like we've tapped everybody out and certainly I'm losing my voice. It's 15 minutes to 3, so unless there are further questions from the floor, I will like to conclude this webcast and this meeting.
Let me start off by thanking my colleagues for their very hard work up here. Let me thank Mike Molnar for being here and also let me acknowledge that my own thinking here has benefited from discussions with multiple individuals both in the Department of Energy all the way from the Secretary to Dr. Steve Chu to (inaudible) to Dave Danielson to Henry Kelly, Kathleen Hogan, all the management team at DOE. I want to acknowledge my friends at the White House and the other Departments, Department of Defense, DARPA, Department of Defense, Pentagon, DARPA, DOE, DOD, DOC.
A lot of my thinking and my colleagues from (inaudible) helped us all put this together. I will not submit to you that we sitting in the first building in Washington D.C. don't know everything, despite what we may tell you so we would like your ideas. We are open to partnerships and we are always open to discussions. So, with that, thank you Betsy and thank you Blake for making this possible for me today.
Thank you to the people who made the arrangements here at the hotel. And, once again, I appreciate everybody coming here today. I know that time is the most valuable resource we all have and you've given some of your most valuable time to be with us here today. I hope it was useful to you and if it wasn't, please let me know. If it was, also, please let me know. Once, again, thank you for your participation and I look forward to a very strong MANUFACTURING USA! Thank you.