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NAM Continues to Spread the Word on IP Theft

If you are reading this blog post it likely means you care about how intellectual property theft puts manufacturers at a competitive disadvantage. Well, the NAM cares strongly about this issue too. As part of our ongoing efforts to educate the public on the high premium manufacturers place on the value of IT to their business, the NAM is participating in a panel discussion tomorrow on the impact of information technology theft and what tactics State Attorney Generals (AG) are using to combat it. You are welcome to listen in via the live webcast.

Information technology (IT) and intellectual property (IP) theft directly harms manufacturers and compromises American competitiveness.  The American Bar Association (ABA) is sponsoring this panel discussion on innovative enforcement actions designed to curb unfair competition from manufacturers that use stolen technology. The panelists include former FTC Chair Bill Kovacic, the NAM’s Tiffany Adams, and Emilio Varanini from the California Department of Justice. The panel will be moderated by Rob McKenna, the former Washington state AG.

As a leading member of the National Alliance for Jobs & Innovation (NAJI), the NAM’s participation in the panel continues our efforts to support initiatives that level the competitive playing field for manufacturers in the US. We encourage you to join us or listen in.

The event is Wednesday, June 26, from 12:00 p.m. – 1:30 p.m. There is no charge for the event.

Click here for more information and to register.


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President Focuses on New Manufacturing Innovation – Not New Spending

The President is in Texas today and it is being reported that he plans to announce that he is issuing an Executive Order focused on manufacturing innovation. This is good news. It continues to recognize what the NAM already knows: Manufacturers in the U.S. are the world’s foremost innovators and therefore are driving our economy. It also endorses the NAM’s position that this White House initiative can be accomplished with existing funding and not increase the deficit.

Today’s announcement follows through on the President’s commitment, made in his State of the Union address earlier this year, to launch three new manufacturing hubs around emerging manufacturing technologies. The existing hub launched as a pilot in Youngstown, OH is centered on additive manufacturing and is being led by many NAM member companies. The competition for the next three institutes are said to focus on digital manufacturing, lightweight and modern metals manufacturing, and manufacturing for next generation power electronics. It is hard to imagine given these areas that NAM’s members will not once again be the innovative brainpower behind these centers as well.

The NAM has been an advocate of this concept. Public-private partnerships bringing together the best minds from industry, academia, the research community, and the government have a proven track record of delivering game-changing innovations in manufacturing products and processes. The NAM has also been clear that now more than ever before these partnerships must be strategic and not lead to wasteful spending. In a recent letter to the U.S Senate we in fact supported an amendment to the Budget resolution that would accelerate the development of advanced manufacturing technologies as long the effort did not add to the deficit.

While it is encouraging that the President continues to bring attention to the power that manufacturing has in job growth and creation the NAM will remain vigilant that any new proposals are fiscally responsible and are in sync with the NAM’s Growth Agenda.

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Tackling a Uniquely 21st Century Problem: How to Tax Digital Goods

During the recent debate in the Senate on the Marketplace Fairness Act, S. 743, another 21st century tax issue popped up, albeit briefly.  We think it’s worth going back to consider an amendment submitted by Sen. John Thune (R-SD) that clarifies the taxation of digital goods and services. This amendment is based on bipartisan legislation the Senator introduced last Congress with Senator Ron Wyden (D-OR).

Simply put, digital goods are electronic files sold online. This includes software, manuals in digital form, and images among other products. Digital services include products ranging from cloud computing to alarm monitoring. These are all products and services that may be leveraged by manufacturers to increase the efficiency of their shopfloor, enhance their ability to connect with customers, and help them better manage their supply chain.

When these goods and services are “shipped” online it is not always as simple as traveling from point A to point B. These digital products can actually bounce around to many “locations” in cyberspace all in the blink of an eye. Today’s current tax regime allows multiple states to tax a manufacturer or other taxpayer on just one transaction.

Manufacturers are already under intense economic pressure ranging from global competition and other adverse and unnecessary regulations in the United States. Fixing this statute with Senators Thune and Wyden’s proposal that would eliminate duplicative and discriminatory taxes would increase manufacturers’ ability to compete.

We look forward to working with both chambers on this very targeted issue so that manufacturers have one less obstacle in their way as they continue to lead America’s most innovative industry.

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2013 Data Breach Investigations Report (DBIR) Released

If all the news we shared with you last week on the legislative activity on cybersecurity has you looking for more this week, we call your attention to the release of Verizon’s sixth annual Data Breach Investigation Report just made public. The report commonly referred to as the DBIR analyzed more than 47,000 security incidents and studied more than 600 data breaches. What they found is alarming but should not be surprising to all the manufacturers on the front lines working hard to protect their data every day from theft and intrusion.

Manufacturers know their intellectual property, including patents, product designs, and trade secrets are the envy of their competitors around the world. They are therefore the constant target of cyberthieves attempting to access this critical data. The DBIR in fact found that manufacturing is the highest targeted industry (33%) by those motivated by industrial espionage. The report also provides a wealth of data on where the threats originate, what the motivating factors are, and provides some recommended best practices to help prevent them.

This type of research performed by Verizon and other industry segment leaders is extremely useful to their manufacturing peers and policymakers around the world. In the United States, our government made a good step forward to address the threats outlined in the DBIR when the House of Representatives passed H.R. 624, the Cyber Intelligence Sharing and Protection Act (CISPA) on April 18. The NAM now looks forward to working with the U.S. Senate to ensure similar legislation is passed in that chamber and sent to the President for his signature.

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President’s Budget Supports Manufacturers as Innovation Leaders

The NAM’s Growth Agenda lays out policies that will make manufacturers in the United States the world’s leading innovators. This can be accomplished partly through federal government support of Federal research agencies and encouraging strong collaborations between the public and private sector. These innovations and the resulting intellectual property coming out of the private and public sector also need to be protected. A robust Federal cybersecurity infrastructure therefore needs improvement. The budget released today by President Obama gives considerable attention to these issues important to manufacturers.

The President’s budget provides for $143B investment in Federal research and development spending across multiple agencies. Much of the research spending is geared specifically toward advances in manufacturing innovation and technology. Of the overall R&D spending, $2.9B is set aside for supporting advanced manufacturing efforts at the National Science Foundation (NSF), and the Departments of Defense, Energy, and Commerce. The Hollings Manufacturing Extension Partnership (MEP) program which is highly utilized by many small manufacturers also receives a $25M increase in the FY14 budget request.

Cybersecurity investment appears to be a priority for the Administration by just looking at the numbers. Almost across the board increases are seen in agencies such as the Departments of Defense and Homeland Security to support cybersecurity research and development inside the government and cyberworkforce training. It also supports the NAM-supported multi-agency Networking and Information Technology Research and Development (NITRD) Program.

Another focus of the President’s budget is the mandatory $1B in new spending for a new program called the National Network for Manufacturing Innovation (NNMI). This money will fund fifteen regional centers to develop and commercialize emerging technologies. The NAM is in support of this concept but still remains concerned about where the money is found to fund it.

These numbers by themselves are all good news for today’s manufacturers that must continue to out-innovate their competitors around the world. We are pleased by this commitment by the Federal government to take the necessary steps to put manufacturers on the front of the cutting edge of innovative developments.

The investments are real commitments to manufacturers and in support of the NAM Growth Agenda. But many other steps need to be made before new dollars can be spent and manufacturers can have the ability to participate in these projects. Manufacturers will continue to push all policymakers to give us a comprehensive innovation agenda which will include delivering on the entire NAM Growth Agenda, not just this one piece of it.

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Lots of Talk, But Manufacturers Want Action on Cybersecurity

It’s hard to avoid the issue of cybersecurity these days. Everywhere you turn there seems to be another story about hacking, theft of intellectual property, and other activity ranging from disruptive to sinister. As a result, the number of proposed solutions now seem to equal the number of press articles. At the NAM we think it is time to stop talking and take action.

The NAM has lent its support once again to a bill recently introduced in the House of Representatives that would allow companies to share cyberthreat information with the government, and vice versa, as well as with other companies. The Cyber Intelligence Sharing and Protection Act (H.R. 624) is a bipartisan bill championed by the leaders of the House Permanent Select Committee on Intelligence, Chairman Mike Rogers (R-MI) and Ranking Member Dutch Ruppersberger (D-MD). The NAM has repeatedly said to the Hill and the White House that if manufacturers are allowed to share information – and have liability protection when they do – the cybersecurity of our critical infrastructure can be significantly enhanced.

The White House has also weighed in on this issue. President Obama raised the importance of cybersecurity and protecting our nation’s intellectual property in his State of the Union address. The day after that speech he issued an Executive Order on cybersecurity. While we are encouraged that the issue of cybersecurity is a priority for this Administration the Executive Order lacks the incentives and liability protection for manufacturers that legislation like The Cyber Intelligence Sharing and Protection Act would provide.

The economic and national security of our nation is the NAM’s highest priority. Manufacturers need timely, reliable, and actionable cyber information so their businesses can address the threats quickly and move on to what they do best and what matters most – making America strong. Let’s stop talking about cybersecurity and pass a bipartisan bill that will help manufacturers.

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NAM Co-Hosts Hill Briefing on Tech Innovation and Manufacturing Growth.

If Congressional staff did not know before this morning how high-tech manufacturing is, they do now after attending a briefing with some of the leading American innovators. The NAM joined forces with the BSA | The Software Alliance on Thursday, February 21, to demonstrate to members of Congress, their staff and the media the important role software solutions have in spurring manufacturing technology advances and creating economic opportunity.

Executives from NAM members The Procter & Gamble Company and Microsoft Corporation were among the companies that participated on a panel discussion on why software and other intellectual property must be protected to help drive innovation. Manufacturers of all sizes leverage information technology to design, produce and deliver their products.

Educating Congress and the public on the strong role that manufacturers play in America’s global technology leadership position is a priority for the NAM. We encourage you to share your innovative story with the NAM and help us drive that message.

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Unfair Competitors Cannot Skirt the Rules in California

When California’s Attorney General Kamala D. Harris filed suit last week against two manufacturers that were using pirated software in their operations it signaled to garment makers around the world that if you don’t play by the rules, you will be held accountable.

The move by the AG supports the NAM’s current efforts to stop manufacturers from unfairly competing against companies in the U.S. If a company uses pirated or stolen software in their operations it reduces their overhead unfairly allowing them to underbid legitimate operations and, in some cases, can jeopardize the safety of their customers. This is not good for American consumers or the manufacturing industry fighting aggressively to gain global market share and create jobs.

We last told you about this issue in a blog post in October when the Commonwealth of Massachusetts filed suit against a Thai seafood company using pirated software giving them an unfair advantage over the Bay State’s fishing companies. While these industries are important, this is not just limited to cargo pants and crab legs. Pirated software can be used in the creation of semiconductors, medications, and auto parts. Like apparel manufacturers and the food industry, these too are job creators in America that play by the rules. Companies that compete unfairly against them should be stopped.

The NAM has joined the National Alliance for Jobs and Innovation, a coalition of manufacturers from around the country working together to address this issue. We encourage you to check out the website and consider participating in this important effort.

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What You Can’t See at CES is what Really Drives Innovation

The Consumer Electronics Show (CES) is the largest convention of the year in Las Vegas. The organizers estimate that close to 160,000 people will visit the show this week. Attendees come from all over the world to see the latest smartphones, in-vehicle technology, gaming innovations, and home appliances to name just a few. Every square inch of the convention center is packed with new technology – even the parking lots are tented over. But it is what you don’t see here that is really the secret to all these technology advances: the wireless telecommunications infrastructure that differentiates many of these innovations.

Wireless technology is what allows the navigation systems being showcased in many of the vehicles at CES to work. It is how smartphones can show you the latest movies in the palm of your hand. It is what powers the connected homes that give all of us the ability to reduce our energy consumption.  Wireless technology is not only what we want for our electronic s, it is frankly what we need.

This need for wireless technology and services is also putting stress on the airwaves – known as spectrum – on which the information travels. Spectrum is a finite resource and users of it are working hard to develop more innovative and efficient ways to use it. But the users can only do so much. The government plays a major role. The agency that regulates the use of spectrum is the Federal Communications Commission (FCC) and it has been directed by Congress to repurpose and auction unused or underutilized spectrum. How the FCC handles these auctions could have a major impact on all manufacturers.

The NAM has repeatedly communicated to the FCC the importance of wireless technology to manufacturers. Our member companies use it to communicate with their employees, manage supply chains, and connect with their customers. We have therefore stressed to the FCC that it cannot pick winners and losers when setting up the rules of the road for these auctions. The process should be open to all and no conditions should be placed on the participants. This will ensure the market drives the next wireless innovations and the regulatory process does not unnecessarily slow it down.

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Corning @ CES: A Show Made of Glass

Today at the 2013 Consumer Electronics Show (CES) it is hard not to go anywhere without seeing the impact of manufacturing innovation. We were amazed to learn more about NAM member Corning and how their products have revolutionized the tech industry.

Corning Incorporated is the world leader in specialty glass and ceramics. Drawing on more than 160 years of materials science and process engineering knowledge, Corning creates and makes keystone components that enable high-technology systems for consumer electronics, mobile emissions control, telecommunications and life sciences. This innovation going back to the 1800’s was on full display here in Las Vegas.

For example, if you are reading this blog post on your mobile device, the odds are you are viewing it through Corning® Gorilla® Glass. Gorilla Glass is the standard for protective cover glass performance and can be found on more than 33 brands, 900 models, and 1 billion of the world’s coolest smartphones, tablets and PCs.

As cool as Gorilla Glass is what’s even cooler for the U.S. manufacturing economy is that it is designed and produced in Harrodsburg, Kentucky and other Corning facilities, from which it is then exported all around the world. It is a true U.S. manufacturing success story – driven by Corning’s strategic innovation – that capitalized on the technology boom around the world. Even in the economic downturn, Corning’s plant in Kentucky and its 400 workers were busy supplying their global customers.

Another part of the Gorilla Glass story is that Corning made another strategic decision to keep their research, development and the resulting intellectual property (IP) here in the United States. IP is what separates Corning from its competitors around the world and they need to ensure they operate in a system which protects it.

This year on Capitol Hill the issue of intellectual property and how to strengthen the system that protects it is likely to be a hot topic. The NAM will continue to be the voice of manufacturers so that products like Gorilla Glass continue to be developed in the U.S. – and create jobs here.

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