Senate Targets U.S. R&D Investment Gaps With New Bill
While the United States consistently tops world rankings in research and development spending due to a robust ecosystem of public and private funders, many firms with promising technologies are unable to move beyond the initial technological discovery phase into manufacturing at scale. For most, the initial investment required to deploy advanced technologies goes beyond traditional research grants, yet private funders are reluctant to take on the risk of large technology projects, especially when positive return-on-investment is expected to take many years. This so-called “valley of death” for innovators causes U.S. firms either to seek manufacturing partners in other countries or fail altogether and is the target of a group of senators’ new bill.
Introduced on August 5th, the Industrial Finance Corporation Act of 2021 outlines the creation of a government-owned corporation supporting U.S. competitiveness and innovation in manufacturing and advanced technologies. Following the model of the Development Finance Corporation, which enables the U.S. to invest in emerging technologies abroad, the bill establishes the Industrial Finance Corporation of the United States (IFCUS) that would serve to bridge investment gaps that often prevent government-funded R&D projects from deploying and scaling their technologies in-country. With the authority to issue loans, purchase equity, and create investment facilities, IFCUS will serve as a strategic partner to innovators and enable taxpayers to reap the benefits of successful projects.
The group of senators sponsoring the bill includes Chris Coons (D-Del.), Amy Klobuchar (D-Minn.), Chris Van Hollen (D-Md.), Raphael Warnock (D-Ga.), Gary Peters (D-Mich.), Michael Bennet (D-Colo.), and Mark Warner (D-Va.). Senator Coons noted that the bill will “address gaps in our supply chain that have resulted in the offshoring of high-paying manufacturing jobs.” Senator Bennet added that while “manufacturing is critical to American security and prosperity…our national approach for supporting this sector has failed to keep pace with innovation.”
A summary of the Industrial Finance Corporation Act of 2021 can be read here: https://www.coons.senate.gov/imo/media/doc/SUMMARY%20IFCUS%20117%20v.2.pdf