Predicted 2017 Cost Savings from Automation and Innovation Significant According to NIST

To spur significant innovation and growth in advanced manufacturing, as well as save over $100 billion annually, U.S. industry must rectify currently unmet needs for measurement science and "proof-of-concept" demonstrations of emerging technologies. This is the overall conclusion reached by economic studies funded by the National Institute of Standards and Technology (NIST) of four advanced manufacturing areas used to create everything from automobile composites to zero-noise headsets.

"Gaps in the technology infrastructure-including the lack of reliable measurement and test methods, scientifically based standards, and other formal knowledge and tools-limit advanced manufacturing's further development and adoption," said NIST economist Gary Anderson, coordinator of the economic studies prepared by RTI International, an independent nonprofit research institute.

Using data collected through extensive interviews and surveys with researchers, developers, manufacturers and other stakeholders, each of the four studies identifies 5 to 10 critical technical barriers to the adoption of its specific manufacturing technology. The studies also estimate the impacts of eliminating those obstacles and define which needs should be met first to do so.

The two largest predicted cost savings were the $57.4 billion and $40.1 billion for the smart manufacturing (where all manufacturing data from design to finished product is electronically exchanged and processed) and advanced robotics and automation sectors, respectively. Among the needs that must be met to realize both of these benefits, the researchers said, is increasing access by small- and medium-sized manufacturers to the same state-of-the-art methods, tools and knowledge as their larger counterparts.

For each of the four advanced manufacturing technologies studied, the estimated annual cost savings and percentage reduction in production costs are:

Additive manufacturing: $4.1 billion, 18.3 percent
Advanced robotics and automation: $40.1 billion, 5.3 percent
Roll-to-roll manufacturing: $400 million, 14.7 percent
Smart manufacturing: $57.4 billion, 3.2 percent

The researchers stated that studies only looked at benefits directly attributable to closing the identified technical gaps in each sector; therefore, the impact estimates are conservative. "If we consider the larger-scale outcomes brought about by meeting these needs-such as new and improved products, increased production quality, long-term industry growth and job creation-the impacts would be significantly higher," Anderson said.

Advanced robotics and automation are potential game-changing technologies for strengthening the U.S. manufacturing sector, particularly for small and medium-sized enterprises in the manufacturing sector. Next-generation advanced robots will be mobile, free to move about their environments and able to safely collaborate with humans. This represents a stark contrast with current-generation industrial robots that operate in highly controlled environments and are frequently isolated from workers out of safety concerns.

Another recent study, commissioned by NIST found that "barriers to innovation lead to a shortage of critical technology infrastructure and inhibit the development and adoption of robotics technology." Technology infrastructure is the broad base of public and quasi-public technologies and technical knowledge that support the research, development, production and diffusion activities of national laboratories, universities and firms.

The analysis is based on in-depth interviews with more than 80 advanced robotics experts from leading robotic systems and component developers, systems integrators and end-users in a variety of industries as well as stakeholders from universities, research centers and industry associations. The unique contribution of the study is the focus on barriers to the development and adoption of advanced robotic technology. The study finds that gaps in critical technology infrastructure, which include standards, measurement technology and other platform technologies, act as a barrier to innovation. Meeting these needs would enable the development of advanced robotic capabilities that would stimulate industry investment in robotics technology and lead to the realization of an estimated $40.4 billion in net economic savings of U.S. manufacturers. This represents a 5.3% reduction in the cost of goods sold.

The study also identifies distinct barriers to innovation, caused by market failures, beyond the public good nature of technology infrastructure. These barriers increase the cost of advanced manufacturing R&D, weaken private investment incentives and magnify the role of public institutions in meeting these scientific and technical needs. The infrastructure gaps alongside critical uncertainties and network effects ensure that current advanced robotics research, development and deployment is excessively costly and accessible to a limited set of companies.

The study provides evidence that proprietary standards fail to address these underlying barriers to innovation. The analysis demonstrates that when measurement and test methods, interoperability standards, scientific and engineering databases are treated as proprietary intellectual assets, firms can use these to create market distortions by conveying market power through branding and reputation. 2017 will be the year in which manufacturers aggressively eliminate barriers to innovation. Thomas R. Cutler is the President & CEO of Fort Lauderdale, Florida-based, TR Cutler, Inc., (www.trcutlerinc.com) Cutler is the founder of the Manufacturing Media Consortium including more than 6000 journalists, editors, and economists writing about trends in manufacturing, industry, material handling, and process improvement. Cutler authors more than 500 feature articles annually regarding the manufacturing sector and is the most published freelance industrial journalist worldwide. Cutler can be contacted at trcutler@trcutlerinc.com and can be followed on Twitter @ThomasRCutler. See More Details.