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Financing Advanced Manufacturing: Why VCs Aren’t the Answer

In 2013, a group of MIT researchers published a study examining the business trajectory of 150 start-up firms that grew out of technology developed at the university.1 These were production-related “hardware” firms that actually manufactured things. The firms were able to attract early stage venture capital (VC) funding. They were also able to find the advanced engineering talent required for the sophisticated manufacturing processes involved. In general, the firms were able to create prototypes of their products in the United States, and they often built U.S. pilot production facilities as well.

But when it came time to “scale up” production of the most suc­cessful of these new products, and manufacture them en masse, it was another story. Most firms moved their production abroad. Al­though some medical device companies were able to scale their manufacturing domestically, when it came to production in sectors such as electronics, advanced materials, batteries, and renewable energy, all that went overseas.

The MIT study identified a not widely discussed but central reason these firms decided to manufacture offshore: financing. While the firms were able to raise American VC capital for their early stages of development, outside of biotech they had trouble finding, within the United States, the large sums of capital required for manufacturing.

MIT professor Hiram Samel, one of the three researchers in­volved in the study, said: “the VCs who provided the initial fi­nancing weren’t interested in funding the manufacturing stage of the project. VCs want things that scale at zero marginal cost, which describes software, not manufacturing.”

Another problem was the time span required. VCs were willing to make the initial investments in these manufacturing firms, but the technology required time to be developed at scale, often two to four years. This would require additional investments, bringing the over­all project beyond the average VC fund’s life of seven to eight years.

Hence the manufacturing start-ups needed to look elsewhere for funding. They found it in Asia: Asian countries were willing to provide grants to attract these later-stage projects. The countries also provided guarantees in terms of demand. As a result, the start-up firms in the MIT study very often had no choice but to move production overseas.

This MIT case study encapsulates some of the weaknesses in the U.S. model of innovation. VCs fund the most promising businesses stemming from basic research conducted at universities and government labs. But there is a disconnect—and a critical funding gap—when it comes to domestic mass production of these innovations. Activist industrial policies or outright mercantile practices by other countries fill this gap, or exploit it, so that production moves offshore. The result is “jobless innovation” in the United States.

Further, as production moves offshore, so do the capabilities and skills required for production. The result is a thinned-out industrial ecosystem, including the loss of suppliers, skills, and the overall “industrial commons.” And as deep knowledge of the technology moves to the site of production, the ability to innovate going for­ward moves along with it. In other words, offshoring threatens future innovation.

There is an additional concern: many of the advanced technologies that America no longer manufactures or even has the capability to manufacture, such as flat-panel displays, are dual-use technologies, with both civilian and military applications. By forgoing the pro­duction of advanced technologies, the United States increases its military risks.

The good news is that there are possible solutions to this financing gap facing attempts to “scale up” in the United States. These solutions will allow Americans to not just to innovate here, but also to manufacture here.

Why the U.S. Venture Capital Model Does Not Support Advanced Manufacturing

“Through our VC industry, we have created this fabulous tool that supports innovation in software technology, and entrepreneurship,” says Bill Bonvillian of MIT. Bonvillian, who is the author of Ad­vanced Manufacturing (with Peter Singer) as well as many other books about innovation policy, adds: “The problem is the method we came up with to bring new technology out, doesn’t fit sectors besides software, IT or biotech well.”

The MIT case study was no outlier: in general, VCs prefer to invest in the early stage of a project, which is low-cost, high reward, and which has a quick timetable for success, with five years or so of funding. Investments in software start-ups are ideal. In contrast, “hard” technologies that require manufacturing are capital intensive and can take a decade or more to evolve. Manufacturing can often require more than $50 million dollars up front for a plant and complex equipment, with many technological risks along the way. The costs are very high and so are the risks of failure. Building manufacturing plants simply doesn’t fit the VC financial model. (Biotech is a VC funding exception in that it is capital heavy and takes a long time to reach fruition. It has a unique regulatory structure, however, that makes it attractive to venture capital. As Bonvillian points out, the FDA’s clinical approval process allows VCs to carefully manage risk along the way, and patents for drugs that make it through this process protect returns.)

The U.S. venture capital system can point to amazing successes such as Google, Facebook, and Netflix—in fact the entire ICT revolution. But it falls flat when it comes to funding comparable innovations in manufacturing or manufacturing companies.

These financial realities are reflected in 2017 statistics from the National Venture Capital Association in terms of what was funded by sector.2 As the following pie chart makes clear, VC firms are focused on funding software. This sector accounted for $30 billion of deals or 35 percent of the total. Pharma and biotech received $13 billion in funding in 2017 or 15 percent of the total. In contrast, IT hardware accounted for only $2.7 billion in funding, a mere 3 percent of the total. Energy was even less, at just over $1 billion.

In the past, manufacturing start-ups could have turned to other sources of funding, such as IPOs or acquisition by a U.S. manufacturing conglomerate. But the IPO market has mostly dried up ex­cept for large, already mature companies. Meanwhile, U.S. conglomerates have themselves been broken up to focus on “core activities,” with manufacturing outsourced to Asia. Additionally, start-ups lack the collateral typically required for bank financing (try getting a loan to build a new factory in the United States in contrast to a new condo). And the capital requirements for manufacturing are much too large for angel investors or online crowdfunding.

From Innovate Here Manufacture There to
Manufacture There Innovate There

Today, the U.S. trade deficit in advanced technology products is about $135 billion annually, primarily with China.3 The sophisticated wisdom in economics is that none of this necessarily matters. Economists’ standard view is that manufacturing is no more im­portant than any other sector—and might even be worse—that it is somehow an inherently retrograde activity. Advanced economies should shed manufacturing jobs in the same way that Americans stopped working on the farm as the country became more developed, according to this conventional wisdom.

The Nobel Prize–winning economist Gary Becker (1930–2014) exemplified this perspective. In his many writings, he argued that manufacturing was analogous to agriculture and that the sector was likely to under­go a fall in its share of total jobs.4 He did acknowledge that the growth of China and “its exports of a large variety of cheap manufactured goods” may have been a force in reducing manufacturing jobs in the United States, but insisted that Chinese manufacturing has been “a great boon to American and other consumers.” Though the United States would lose many low-skill manufacturing jobs as a result of improved technology and offshoring, “new and exciting technologies may bring back some manufacturing output to the United States.”

Becker’s approach, however, cannot explain why manufacturing still makes up a much higher share of employment in Germany and Switzerland compared to the United States, even with higher wages in those countries. Becker forecast that the United States would likely retain the highly skilled jobs at the top of the manufacturing supply chain while shedding low-skill jobs. In reality, America has lost both types of manufacturing jobs. Three Dutch economists who study global supply chains found that “whereas in Europe and Japan, high-skilled job opportunities have increased, they have declined in the United States since 1995.”5

Consulting firms were all too happy to help move manufacturing jobs to China. The title of the McKinsey Global Institute’s 2003 white paper “Offshoring: Is it a Win-Win Game?”6 was clearly only a rhetorical question. The answer according to McKinsey was, unsurprisingly, that “offshoring is as beneficial to the United States as it is to the destination country.”

The initial idea might have been that the United States would outsource to Asia low-skill, labor-intensive manufacturing jobs such as simple assembly or circuit board stuffing. But what wasn’t under­stood was that the United States was rapidly offshoring advanced manufacturing too, because of the lack of domestic financing. This globalist, free trade ideology didn’t consider how offshoring would intersect with Chinese mercantilist practices. The United States has lost more than just jobs as a result. It has fallen behind in technologies originally created in America.

“Twenty or thirty years ago, we invented and manufactured here, and had production capacity in most industries. Gradually, we out­sourced components, then subsystems, then final assembly, but we still invented here,” says Sridhar Kota, executive director of MFore­sight, a federally funded national consortium focused on emerging manufacturing technologies. “Today, with the latest technology we don’t even pretend to manufacture here,” Kota says. “We are losing production of new technologies right from the cradle. Too many start-ups are forced to manufacture in China because we have lost the industrial commons. This is a dangerous situation for an ad­vanced economy.”7

For instance, all manufacturing of flat-panel displays takes place in two time zones in Asia (the underlying liquid crystal technology was created at the GE and Westinghouse labs). Similar stories could be told about photovoltaics and increasingly nanotechnology. And with the exception of Apple, virtually all notebook computers and smart phones are not just made in Asia, they are designed there too. The U.S. model of innovate here, manufacture there has become manufacture there, innovate there.

Today, the world’s lithium battery industry (which powers elec­tric vehicles) is centered in China, home of the world’s largest car market. Though much of the underlying technology for lithium-ion batteries was developed in the United States, battery manufacturing, like other hard tech, is a poor fit for venture capital funding and scale-up in production. It is a good fit for the government-backed funding initiatives in China and the size of the Chinese market. For instance, in China, subsidies go to those electric vehicles which are powered by domestically produced batteries.

China, even more than the United States, enjoys economies of scale because of its huge population. As manufacturers “learn by doing,” the more they produce the cheaper it gets, with a rapid decrease in unit cost. This can result in a virtuous circle of increasing scale, improving innovation, and falling cost.

This is increasingly a Chinese advanced manufacturing story, rather than a U.S. one. Aside from the uncertain case of Tesla, this virtuous circle for the production of advanced technologies, includ­ing lithium batteries and probably electric vehicles too, is taking place in China, not the United States.

There are many other examples of technological innovation thriving outside of but not in America. Examples include materials and coatings, integrated circuit packaging (in particular so-called system-in-package or SiPs), magnets, motors, wind turbines, and lots of areas in chemicals. This list is long and growing and now even extends to 5G wireless technology: “There are no U.S. companies in the radio parts anymore,” says Harvard Business School professor Willy Shih. The United States has no telecoms equipment manufacturer that can compete with Huawei.

Indeed, America’s remaining supposed tech leaders are expe­riencing a litany of engineering setbacks and a regression from technological progress.

Apple, which introduced the Mac in 1994, the iPod in 2001, and the iPhone in 2007, in 2019 introduced . . . the Apple Card and Apple TV+. Just as Steve Jobs at the launch of the iPhone said, “every once in a while, a revolutionary product comes along that changes everything,” Tim Cook said at the launch of the Apple Card, this is “the most significant change in the credit card experience in fifty years.” In the emotional ceremony which also launched Apple TV+, Cook cried as he was hugged by Oprah.

Meanwhile, Apple is eighteen months behind its rivals in bringing a 5G phone to the market. Huawei offered to help by selling Apple 5G chips. Forbes concluded, “Apple has been left out­gunned by 5G technology.”8

Boeing, a leader in one the few industries where the United States allegedly maintains manufacturing prowess, saw two crashes of its most recent 737 max. The proximate cause was erroneous activation of safety software. This software was necessary because of the inher­ent instability of the 737 max compared to earlier 737s. But Boeing has a much longer string of recent engineering problems. These include the battery fires on the 787s and the rarely discussed “flutter problem” on the 747-800 (the most recent version of the 747). Oscillations of the wing could cause the plane to break up. Boeing found a software solution that overrode this problem.9

Boeing, which historically developed and largely manufactured its planes in-house, in the 2000s started moving to “an unconventional supply chain” involving radical outsourcing: 70 percent of both the development and manufacturing of the 787 was outsourced.10 More recently Boeing has tried to bring back some capa­bilities in-house, but it might be too late. Boeing’s expertise in aircraft wing technology has been transferred to Japan where the wings are designed and made. A 2007 study of the geography of aircraft production, “Boeing’s Diffusion of Commercial Aircraft Technology to Japan: Surrendering the U.S. Industry for Foreign Financial Support,”11 argued that Japanese subsidies were a key com­ponent of Boeing’s outsourcing of advanced manufacturing to Japan.

Solving the Scale-Up Problem

The United States currently lacks a flourishing example of how to fund the “scale-up” gap facing advanced manufacturing. Permanent capital funds (with no termination date), bank financing, and sover­eign wealth funds are intrinsically well-suited to this task, but this is not (currently) the American way. Other countries, however, face the same problem of jobless innovation and the question of how to finance the domestic scaling-up of technological advances. They have created financing solutions that could be implemented here.

Lessons from the United Kingdom. The British Business Bank’s “Patient Capital Programme,” launched in July 2018, is an interest­ing example because it is a government intervention in a country which, like the United States, has a laissez-faire tradition. The program’s mission is to enable “long-term investment in innovative firms led by ambitious entrepreneurs who want to build large scale businesses.” It does this by offering access to “the long-term fi­nancing they require to scale up.”

The British Business Bank, which is launching the initiative, is a government-owned development bank. The Patient Capital Pro­gramme grew out of recommendations in the HM Treasury report “Financing Growth in Innovative Firms,”12 which found that UK businesses face a scale-up problem because of a lack of finance for innovative small businesses. If anything, in Britain the scale-up and commercialization problem of domestic technological innovations is more severe than in the United States.

Though many U.S. social scientists think they were the first to identify a financing gap for scale-ups, sometimes referred to as “the valley of death,” the English realized they had this problem a long time ago.13 The Macmillan Committee, set up in 1929 to examine the causes of the depression in Britain, “unearthed structural fault lines in the provision of small to medium enterprise finance—the so-called ‘Macmillan gap.’”14 The context for the committee’s 1931 report about this gap was that the United Kingdom, in some ways like America today, had an extremely well-developed financial sector and a history of technological innovation, but problems connecting the two. The Macmillan gap has never really been closed. This can be seen in the fact that Britain invented the jet engine, radar, and, according to the English, the television, only to have other countries dominate these technologies.

British Patient Capital does not make direct investments in com­panies or “pick winners.” Instead it uses a fund-of-funds approach, investing in established funds that make the investments. It was initially seeded with £400 billion of capital, which will grow to £2.5 billion.

Many questions surround the British Patient Capital Programme and the British Business Bank itself. Government initiatives are in­trinsically vulnerable to political capture, with financial support di­rected to politically powerful but declining industries rather than growing ones. This complaint has been made in the press against the similarly structured Ottawa Innovation Fund, for example.15 The bigger problem is that scaling up doesn’t happen overnight. The results aren’t seen for many years if not decades. Governments typi­cally lack the patience that the “patient capital initiative” requires.

Still, since Margaret Thatcher, Britain has pioneered many initia­tives centered on deregulation and market competition. Now, in a tentative way, it is pursuing an activist approach to industrial policy. In this case the government identified a specific market failure in the financing of scale-ups and so intervened.

Lessons from Israel. “The U.S. does not need brand new institutions like a development bank to fund scale-ups,” counters Dan Breznitz, a professor of global affairs and innovation studies at the University of Toronto. “I think retraining commercial banks, as has been done in Israel, is a better model.” Breznitz studies comparative innovation systems around the world, such as in Taiwan, Ireland, Israel, and China.

Israel, sometimes called “start-up” nation, does not have the same reputation as a “scale-up” nation. Israeli start-ups do become big, but not always in Israel or as independent companies. Financing is the problem: the most promising software and biotech start-ups often relocate to foreign countries for late-stage funding and growth. The Israeli Innovation Authority created its own solution to the scale-up problem through new approaches to commercial lending.

Bank lending is well suited to the scaling-up stage of a company. The comparatively low returns and long time horizons associated with financing this stage make it an intrinsically better fit for com­mercial banks as opposed to VC incubation. Commercial lending is attractive to entrepreneurs as well: for a start-up, a loan from a bank allows the founders, whose ownership has already been diluted by early stage venture capital funding, to scale up without further dilut­ing their equity. In Germany, the small to medium industrial ex­porters, “the Mittelstand,” are primarily financed by German com­mercial banks.

Nevertheless, there are many risks to commercial banks in funding scale-ups. Even if the start-up has a firm set of orders and a clearly defined cash burn rate, it usually lacks collateral. Lenders need a deep understanding of the start-up’s business in order to make prudent loans.

Israel was able to foster commercial bank loans for scaling up through a state guarantee of the loans. Specifically, the European Investment Bank provided the funding required for the guarantee. Each time a loan is repaid, the guarantee is extended to a new loan. The program has multiple advantages: the state does not pick win­ners, but instead lets commercial banks make the key decisions. And the bank comes to have knowledge of the start-up’s business, neces­sary for future loans. The result is a robust new financing mechanism for scaling up.

Breznitz, who is author of the forthcoming Seeds of Growth: Radical New Thinking on How to Foster Local Innovation-Based Growth, says “this model could easily be deployed in the U.S.,” though he cautions that a critical part of this policy would involve the retraining of both banks and entrepreneurs.

Current programs in the United States. The United States does have institutions that could be used for scaling up, though they aren’t banks: the Manufacturing USA Institutes, established by the Obama administration to increase U.S. competitiveness in advanced manufacturing, could also be used to bring manufacturing to scale. For example, the Advanced Functional Fabrics of America (affoa), one of the institutes, is working on new types of textiles woven out of semiconductors. The resulting “sensing fabrics” can be built into infrastructure to detect deterioration. Or more creatively, a shirt woven from these fibers can become a computer, or phone, and transmit information about the wearer’s health. One of the institute’s goals, in addition to developing these new fibers, is to “address challenges that prevent the volume manufacturing of innovative fibers.” To this end it offers rapid prototyping capabilities so that companies can test proof of concept and ultimately execute projects for both “consumer and defense applications.”

The U.S. textile industry largely left for China fifteen years ago with only a few small residual pockets left. Creating advanced fibers with “smart capabilities” is what the U.S. does best, pioneering a whole new industry rather than propping up legacy ones.

The question, though, is whether supply alone is enough to revive manufacturing in the United States. There is also a demand side to the equation. “Having a customer who will buy this stuff would be a good way to attract manufacturing back to the US,” says Professor Willy Shih. Shih is known for his finding that the United States no longer has the technological capability to manufacture the Amazon Kindle, among many other things, domestically. Shih’s argument is that, although manufacturing institutes such as affoa are a good start, sufficient demand is needed to create the financial incentives for these technologies to scale, with or without new financial structures.

But where would this demand come from? China can create demand by decree. America’s very large states could do the same. Maybe the answer—at least the one with some historical precedent—is targeted demand from the Department of Defense, which is already funding the majority of the Manufacturing USA Institutes.

Manufacturing a Political Majority

The inability of advanced technology firms to scale up their manufacturing in the United States is ultimately symptomatic of the broader limitations of the U.S. way of innovation. America is still among the leaders in advanced or upstream R&D, largely conducted at universities or government labs, focused on new technological frontiers (though even these capabilities may be declining, at least compared to the recent past).16 In contrast, other countries such as Germany lead in applied or downstream innovation, focused on manufacturing processes. In the United States there is a disconnect between upstream and downstream innovation. In the past, corporate labs bridged this gap and made contributions of their own, but these labs have been eliminated due to cost cutting. America also lacks institutions such as Germany’s Fraunhofer Institutes that translate theoretical academic research into applied processes that can be used for manufacturing. And the failure of the U.S. financial system to support advanced manufacturing here further exacerbates this disconnect when it comes to making things in the United States.

What the financial system has done is to shape the contours of innovation in America, and thus determine what gets brought to market. Financial incentives explain why tech in America means software not hardware. Radical new approaches to transportation, building materials, or energy don’t get funding and so remain in the lab. These funding limitations underpin Peter Thiel’s manifesto about the VC industry, “What Happened to the Future?”17 It is subtitled, “We wanted flying cars, instead we got 140 characters.”

Elite Americans gave up on manufacturing a long time ago and are immunized from its decline. Moreover, because their wealth does not rely on advanced manufacturing, those industries have little in the way of an elite constituency or organized corporate lobby. To them, manufacturing is essentially a legacy industry. Besides, Ameri­ca still leads in the industries of the present such as big data or social media or software apps. But these might not be the industries of the future. The future could be new types of hardware, hardware with military applications.

Today, the whole topic of U.S. manufacturing weakness brings up negative associations with “the deplorables” or red states, or worst of all, Trump. An article in the Atlantic about the Green New Deal made these unspoken feelings explicit, stating: “the word manufacturing is now a racial dog whistle.”18 It countered: “who better than a popular leftist congresswoman to reclaim its whine? Green New Deal’s racial-justice agenda reads as an attempt to deal with this legacy.”

The Green New Deal, and perhaps more importantly, the reading list behind it, shows that some on the left are willing to embrace industrial policy again. But this industrial policy is tightly focused on climate change combined with social justice. There is otherwise no general interest in restoring American competitiveness and eco­nomic dynamism. The risk to U.S. military capabilities posed by American weakness in “hard tech” is hardly a concern: for many on the left, the decline of U.S. military prowess is a good thing.

On the mainstream right, the solutions to the scale-up problem deployed by other countries are completely unacceptable. Though none of the solutions discussed above involve picking winners, all involve some sort of government intervention. They therefore vio­late absolutist free market principles.

Proponents of the view that government can never be the solu­tion should consider that the governments of other countries have identified specific market failures relating to scaling up and crafted specific solutions in response. Indeed, earlier in the twentieth centu­ry, America itself adopted proactive government measures to address the funding gap for small business, and transformative innovations in American tech have frequently stemmed from government-funded basic research. For instance, the Defense Advanced Research Projects Agency (darpa) was instrumental in creating the personal computer and the early stages of the internet.

And what does heeding the wisdom of the market mean when today’s markets, such as those for electric vehicles or batteries, are being driven by Chinese rules and regulations? For instance, the “Made in China 2025” initiative aims to “create ‘national champions’ that can conquer export markets” according to the Financial Times.19 It will require that Chinese hospitals use 70 percent Chinese-made medical devices. What is the libertarian response to that?

The laissez-faire approach might have been an appropriate re­sponse to the challenges of the 1970s and ’80s posed by U.S. eco­nomic sclerosis. But is it still is a good response to the challenges of today, posed by the mercantilist Chinese model? A few on the right, such as Marco Rubio, who has called for a national innovation strategy, are willing to question this antique orthodoxy. But in general, a set of policy solutions that sometimes work, sometimes doesn’t, has coarsened into an unquestionable belief system. The anti‑statism of the right now resembles a religion, analogous to the role that victim identity plays in the church on the left.

As a result of these hardened political positions, finding new financing solutions to the scale-up problem in manufacturing has no natural ideological home. Mainstream economics does not sup­port the need for new interventions either. Economists generally are skeptical of policies which privilege manufacturing over other sec­tors, and they are also largely ignorant of the scale-up problem itself.

Even if it lacks a vocal constituency, however, finding a solution to the scale-up problem could benefit all Americans. The current system of U.S. innovation poses problems across U.S. society. Currently, the fruits of innovation go to the inventor, a handful of R&D engineers, and venture capitalists. But the vast majority of Americans don’t benefit except as consumers. The middle-class prosperity found in America at mid-century is moving to the site of production, which is offshore.

By making things in America again, the United States can revive a model of economic growth and development that benefits many regions, as opposed to just the handful of coastal cities that specialize in (soft) tech or financial services. Finding solutions to the financing gap for scale-ups is one way to accomplish this.

Scaling up advanced manufacturing in the United States doesn’t mean discarding the remarkable U.S. VC system. It means building upon it to find new solutions that can grow advanced manufacturing. Cities and states working to create a “start-up culture” should also try to foster a scale-up culture. New York for example, has become a technology leader. The tri-state region should consider building upon this success to become a leader in advanced manufacturing too, however surprising this may seem.

Finding the financial solution to support scale-up will take some experimentation. There is no app for how to do this, but it is a relatively simple problem to solve. There are many solutions. For instance, the “Opportunity Zones” program established by Congress to foster investment in “low-income communities” could be adapted and used as a model of how to spur investment in manufacturing. Or the financial industry could bring out new permanent capital funds—existing closed-end fund structures are well suited to this long-term perspective. Or a farsighted state government could allocate some of the funding directed to start-ups—which generally go nowhere—to establish a bank lending system for scale-ups, as has been done in Israel. Or large states could find ways to increase demand for American advanced manufacturing products.

America has always been good at inventing things. With the right fixes it can get back in the business of making things.

This article originally appeared in American Affairs Volume III, Number 2 (Summer 2019): 43–57.


Notes

1   Elisabeth B. Reynolds et al., “Learning by Building: Complementary Assets and the Migration of Capabilities in U.S. Innovative Firms,” Production in the Innovation Economy (Cambridge: MIT Press, 2014).

2   National Venture Capital Association, National Venture Capital Association Yearbook, 2018.

3   Wayne M. Morrison, “China-US Trade Issues,” Congressional Research Service, July 30, 2018.

4   Gary Becker, “Concern about the Decline in Manufacturing in the United States?,” Becker-Posner Blog, April 22, 2012.

5   Bart Los, Marcel P. Timmer, and Gaaitzen J. de Vries, “How Global Are Global Value Chains?: A New Approach to Measure International Fragmentation,” Journal of Regional Science 55, no. 1 (January 2015): 66–92.

6   Diana Farrell et al., “Offshoring: Is It a Win-Win Game?,” McKinsey Global Institute, August 2003.

7   Sridhar Kota and Thomas C. Mahoney, “Manufacturing Prosperity: A Bold Strategy for National Wealth and Security,” MForesight, June 2018.

8   Ewan Spence, “Apple Backs Down against Qualcomm to Secure iPhone 5G Technology,” Forbes, April 17, 2019.

9   Dominic Gates, “In Person: Fitzgerald’s Fix for Boeing 747-8 Earns Aviation Honors,” Seattle Times, October 24, 2011.

10  Christopher S. Tang and Joshua D. Zimmerman, “Managing New Product Development and Supply Chain Risks: The Boeing 787 Case,” Supply Chain Forum: An International Journal 10, no. 2 (2009): 74.

11  Alan MacPherson, and David Pritchard, “Boeing’s Diffusion of Commercial Aircraft Technology to Japan: Surrendering the U.S. Industry for Foreign Financial Support,” Journal of Labor Research 28, no. 3 (July 2007): 552–66.

12  “Financing Growth in Innovative Firms,” HM Treasury (United Kingdom), August 2017.

13  Andrew Haldane, “The UK Needs a Credit Register to Close Its ‘Macmillan Gap,’” Telegraph, June 17, 2014.

14  See J. C. Stamp, “The Report of the Macmillan Committee,” Economic Journal 41, no. 163 (September 1931): 424–35.

15  Jess Snyder, “Experts Warn Ottawa’s Latest Innovation Fund Could Be Falling Under Political Influence,” National Post, December 18, 2018.

16  See Edward Dougherty, “The Decline of American Science and Engineering,” American Affairs 3, no. 1 (Spring 2019): 113–26.

17  Peter Thiel, Sean Parker, Ken Howery, Luke Nosek, Brian Singerman, and Bruce Gibney, “What Happened to the Future,” Founders Fund, 2011.

18  Robinson Meyer, “A Centuries-Old Idea Could Revolutionize Climate Policy,” Atlantic, February 19, 2019.

19  Tom Hancock, “Multinationals Lose Ground in China’s Medical Devices,” Financial Times, May 27, 2018.


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