Inventions resulting from Federal funding should benefit American producers and workers when possible.
Bidenomics is mobilizing historic levels of private sector investment in the United States, supporting American innovation and research and development (R&D), strengthening domestic manufacturing after decades of offshoring, and creating new, good-paying jobs, including union jobs and jobs that don’t require a college degree. Over the last several decades, American workers, researchers and companies have created and commercialized many of the world’s most important technologies. However, many innovative technologies have ended up being manufactured elsewhere, even when the research behind those inventions has been funded with taxpayer dollars and can be manufactured domestically. On Friday, July 28,President Biden will sign an Executive Order to prioritize America’s policy of “invent it here, make it here”—to the benefit of American workers, communities, and global supply chain resilience.
With the President’s Invest in America historic investments in Federal R&D through the Bipartisan Infrastructure Law, the CHIPS and Science Act, and the Inflation Reduction Act, the United States has a once-in-a-generation package of tools and resources to expand our innovative capacity. Through the government innovation practices in the Executive Order, the Administration will promote R&D investments than can directly support American manufacturing and American jobs in the industries of the future—a key pillar of Bidenomics.
To achieve this outcome, today’s Executive Order tackles four core objectives:
First, it will improve transparency, cut red tape, and streamline reporting requirements in the Federal R&D process to better track progress towards our domestic manufacturing goals.
- The Federal Government has historically faced challenges when tracking the lifecycle of technologies developed and commercialized through Federal R&D investment. In particular, the government has lacked the ability to understand how, when, and where investments in R&D lead to domestic manufacturing and the creation of good-paying U.S. jobs. The Executive Order helps to modernize use of the government reporting system—iEdison—to help researchers, companies, and the public better understand the innovation landscape in the United States.
- The Executive Order directs the Department of Commerce to develop contract terms for use by agencies to ease implementation. Agencies are encouraged to use these terms to collect data on inventions and their manufacturing locations. The terms developed by the Department of Commerce will make sure that this reporting protects business confidential information while providing increased visibility into taxpayer-funded R&D investments.
- The Executive Order encourages agencies to streamline reporting requirements to reduce the administrative burden on funding recipients and provide more consistent innovation and commercialization data.
- The Executive Order directs most agencies to transition reporting requirements to a single reporting portal—the National Institute of Standards and Technology’s iEdison—by the end of 2025. Already used by many agencies, iEdison will simplify and centralize reporting for Federal R&D funding recipients and their licensees, who will use one system to report all required information.
- Beginning within two years after the date of this order, agencies that make substantial R&D investments will report annually to the Made in America Director in the Office of Management and Budget on the utilization of inventions developed through their R&D awards, as well as where products using those inventions are being manufactured.
Second, it will boost the incentive to manufacture new inventions in the United States when those inventions are developed using Federal funds.
- The Executive Order encourages agencies to consider domestic manufacturing in their R&D award solicitations.
- The White House Office of Science and Technology Policy (OSTP), working through the National Science and Technology Council, will seek to add domestic manufacturing to the Federal Government’s technology R&D roadmaps. This emphasizes the importance of domestic manufacturing for federally funded inventions, and also encourages potential recipients of Federal funding to build domestic manufacturing into their long-term planning to commercialize their inventions.
- The Executive Order encourages agencies to consider using the broad range of agency authorities used to purchase or invest in leading-edge technologies to support their production in the United States, extending the incentive to manufacture domestically beyond use of those authorities that historically included such a requirement.
Third, it encourages the expansion of domestic production for critical industries while maintaining flexibility to build strong international R&D partnerships
- In deciding whether to expand domestic manufacturing requirements, agencies shall consider the economic and national security interests of the United States, including whether certain critical or emerging technologies should be produced domestically.
- Under the 1980 Bayh-Dole Act, domestic manufacturing requirements are limited to a narrow set of entities—third parties who have received an exclusive license to use and sell an invention in the United States. The Bayh-Dole domestic manufacturing requirement doesn’t apply to an organization with a non-exclusive license, Federal funding awardees themselves, or an organization that takes an invention developed with U.S. Federal funding to market to sell solely overseas. For critical and emerging technologies, agencies are encouraged to expand the domestic manufacturing requirement to not just exclusive licensees but other entities.
- This Executive Order also is forward-facing and maintains the flexibilities to create critical international R&D partnerships that support supply chain resilience and economic security.
Fourth, it will make the domestic manufacturing waiver process clearer, timelier, and more consistent, including when production is not commercially feasible.
- The Department of Commerce will develop a set of common waiver questions for use across the U.S. Government. Relevant criteria for these questions should include, among other things, how the waiver will be used; why it is important that the invention be brought to market; whether there are any potential economic or national security impacts to manufacturing the invention outside the United States; and what benefits will accrue to domestic manufacturing and United States jobs as a result of bringing the invention to market.
- Importantly, waiver applicants will be required to describe the conditions under which the invention will be manufactured abroad, including unionization of workplaces, health and safety standards, labor and wage laws, and environmental impacts. This will support the goal of manufacturing inventions under conditions that are in line with U.S. values when they cannot be manufactured domestically.
- The Executive Order encourages agencies to improve the timeliness of the waiver process by acknowledging receipt of waiver applications within 10 business days and finalizing waiver decisions as soon as possible.
- The Executive Order instructs the Department of Commerce to improve the transparency of the waiver process by developing public guidance on how agencies will approach waiver decisions. The guidance will include a non-exhaustive list of factors for consideration when assessing whether domestic production of an invention is not commercially feasible. This waiver guidance will provide clarity and confidence to the business community and continue to enable collaboration with trusted allies and partners, all while ensuring that U.S.-based manufacturers are not disadvantaged.