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2020 Budget Request Could Hamper Clean Energy R&D

According to budget documents released in March by the U.S. Department of Energy, the Administration proposed deep cuts that will reduce new spending on federal programs for clean energy research and development.

The request, if approved, eliminates funding for programs that lawmakers consider critical. This includes the Department of Energy’s Office of Energy Efficiency and Renewable Energy (EERE) that’ll see a slash of 87 percent – from $2.4 billion approved in the 2019 budget to $343 million in new spending come 2020.

At first glance, EERE’s cut seems less extensive because the fiscal year 2020 budget included some past funding that had been delayed.

However, even with the roll-over funds, the new total of $700 million for the department will cripple support for promising and novel technologies such as high-tech materials, advanced wind turbines, green buildings, and much more. The weatherization program that handles hidden pockets of energy asymmetry may also be abolished.

Another program that could take a hit is the Office of Science, which currently funds research in crucial areas such as chemistry and materials research, biology and environmental science, Advanced Research Projects Agency-Energy, and supercomputing.

In fact, this marks the 3rd time the Administration has tried eradicating ARPA-E, which funds emerging, energy-related projects such as improving basic components of solar panels and next-generation batteries.

it’s highly unlikely this proposal will come into play without major changes since the latest numbers need final approval from Congress, which is currently dominated by Democrats, but scientist have pointed out the proposal alone has had a chilling effect.

Scientists around the nation are concerned that they will face instability and resistance in future budgets, which could, in turn, affect their competitiveness and effectiveness.

2019 Innovation Rankings By State

The United States is usually accredited as one of the most innovative nations in the world. However, that does not mean the country’s technological and innovation quests are divided equally around the nation.

Burgeoning technology and innovative concepts usually find their inception in major regions such as San Francisco and New York, while middle tier states in the nation try to play catch-up.

With the United States predicted to spend approximately $581 billion on Research and Development (R&D) in 2019, and New York City recently no longer under consideration for Amazon’s 2nd headquarters, finance and research website WalletHub recently published an enumeration ranking the 50 U.S. States and District of Columbia in terms of innovation rate.

It came as no surprise that the least innovative states on the list included the Midwest states, usually ignored by leading tech firms in favor of metropolitan areas that have historically enticed top tech talent and major tech firms.

In order to come up with the rankings, Wallet Hub based its findings on multiple metrics divided into two different categories: innovation environment and human capital.

The human capital category includes units such as projected STEM job demand in 2020, the share of STEM professionals, and participation and performance in high school level science and math exams.

The innovation environment category, on the other hand, included each state’s tax-friendliness, number of jobs in new companies, level of research and development spending, and every state’s share of firms that are tech oriented.

Below are the most and least innovative states in the U.S. according to WalletHub:

Most innovative states

Massachusetts
Maryland
Washington
District of Columbia
California
Colorado
Virginia
Utah
Delaware
Oregon

Least innovative states

Oklahoma
Nebraska
Hawaii
Kentucky
Iowa
Tennessee
Arkansas
West Virginia
Louisiana
Mississippi

U.S. Senators Take A Bipartisan Approach to Solve Climate Change

Energy Research and Development (R&D) is at the heart of combating climate change.

And in order to reverse the snowballing, adverse effects of climate change, our nation needs to, at the very least, move toward a zero carbon emission economy as soon as possible. This is the resounding agreement throughout the scientific realm.

The good news is Congressional Republicans have been increasingly agreeing with their Democratic counterparts that action needs to be taken to alleviate climate change. During the parties’ house hearings, Energy R&D policy emerged as a focal point for bipartisan collaboration.

Better yet, on Friday, March 9, 2019, two centric senators called for the United States to pursue Pragmatic Energy R&D policies that can fight climate change instead of concentrating on drastic, yet unattainable measures.

Senate Energy and Natural Resources Committee Chair Sen. Lisa Murkowski (R-Alaska) and Sen. Joe Manchin (D – W.Va) wrote a Washington Post article on March 8 stating that the U.S boasts the opportunity to lead the entire world on the improvement of new innovations aimed at reducing greenhouse gas emissions. They even pledged they’ll support these efforts in the Senate.

“If the United States is going to lead by example, we must continue to lead the world in the development of new and improved technologies,” they wrote. “On the Energy and Natural Resources Committee, we agree it is time to act. And that is why we will work to find responsible solutions worthy of West Virginians, Alaskans, and all Americans.”

Even though they did not name specific Energy R&D policies they intend to pursue, Manchin and Murkowski wrote that they’ll back “pragmatic” energy policies that can attract strong, lasting support from lawmakers and voters alike.

Last month, Murkowski’s committee heard a testimony that was in favor of more than doubling United States’ energy R&D spending.

“If we are serious about creating and leading in a new industrial revolution and competing with China, the E.U. and other parts of the world, Congress should seriously consider ARPA-E’s budget authority to be $1 billion at the very least,” Arun Majumdar, founding director of ARPA-E between 2009-2012 and the co-director of Stanford University’s Precourt Institute for Energy, testified during the Congressional hearing.

Steady Growth For Manufacturing R&D in West Michigan

The manufacturing industry is synonymous with West Michigan. This special relationship was forged by an outburst of technological innovation in the area hundreds of years ago, which included the assembly line and major developments in the transmission system and internal combustion engine.

Fast forward to today’s innovative endeavors in the United States, it isn’t implausible to assert that the state of innovation activities in the manufacturing sector in North America has been improving consistently, with West Michigan retaining its dominant role.

According to an annual report analysis made by MiBiz and filed with federal securities regulators, the nine publicly traded companies in West Michigan collectively spent more than $2 billion on research and development (R&D) in 2018: which marks a 6.5 percent increase from the preceding year.

This analysis proved that manufacturers in the arbitrary region of the state remain consistent and committed to investing in engineering, research and development activities, without overextending themselves financially.

“Even in a time of uncertainty, the local companies around here are keeping disciplined on the R&D,” Wall, director of automotive analysis in Grand Rapids at IHS Markit told MiBiz. “They do that to their credit and it should bear well for them at the end of the day when you look at the investments that they are making. Frankly, I expect all these companies to know that if they don’t, their competitors will.”

West Michigan has been very successful to date in supporting its R&D spending as a percentage of net sales (a metric also regarded to as R&D intensity); with the value ranging from less than 1% to more than 6% among the public traded firms in the analysis.

Better yet, based on the current geopolitical and economic indicators, we haven’t seen or heard anything that’s really likely to change the companies’ level of investments in relation to R&D. We should expect them (the firms) to maintain their steady approach to R&D spending in the following years.

Clean Energy R&D Could Be the Solution to Climate Change

Research and Development is the unsung hero when it comes to American innovation. Decades ago, unemployment and lack of sufficient industries were the biggest challenges in America, but Government funded Research and Development (R&D) innovations took care of all of that. Today, we have a different challenge: climate change.

But the good news is that R&D can help take care of that too, through clean energy R&D policies. In fact, clean energy R&D policies are already making a difference in the realm of climate change.

Did you know that clean energy is cheaper today compared to any other time in history? And that is a direct result of scientific innovations that were made possible by R&D investments made 10, 15, 20, and even 30 years ago.

Even though this improvement is nowhere close to goals we would like to attain in the long term, it is significant progress we should definitely include in the “win” column.

That said, we cannot fully take control over climate change only using the technology we have today.

“Clean Energy R&D innovation is the ultimate solution to the surging threat in climate change. All nations around the world do not have the luxury to sit around and wait for the next cutting edge technological inventions to emerge so they can start taking action,” said Ernest Moniz, Secretary of the Department of Energy.

This means governments need to make serious investments in clean energy R&D right away.

On the bright side, clean energy R&D that has already had an impact is Solar Photovoltaics. These devices were invented back in the 1950s, but they were too expensive to be adopted for commercial and non-commercial use back then.

However, thanks to recent, multiple R&D breakthroughs, the market cost of these devices dropped from $76.67 in 1977 to $0.26 in 2016. This marks a decrease of more than 99% in 39 years.

This astounding price decrease accelerated deployment, opening the doors wide open for the solar sector: which, in turn, encouraged private investments in the clean energy economy.

To meet the challenges of climate change wholly, we need more R&D victories like these.

Australia’s Attractiveness for Clinical Trials

To bring a new drug to market, an average of 12 years and $1.7 billion (US) in R&D spending is required. Yet only 1 in 5,000 drugs that begin preclinical testing make it to the market. This has led to a disproportionate number of drugs being developed for rare diseases (affecting less than 200,000 in the US at any given time) due to a 25.3% success rate versus 3.4% for oncology. Many argue this is unsustainable and there is pressure to shorten the amount of time it takes to develop drugs.

Over 50% of global clinical trials have treatment sites in the Asia-Pacific region due to the huge number and diversity of participants available (over four billion). Australia is particularly attractive, with over $1 billion AUD invested in R&D each year across more than 1,500 trials. From 2012-2015, clinical trial activity rose by 17.2% compared to 1.8% globally. Australia’s top-notch facilities and quality of medical research are key draw points for pharmaceutical companies.

The refundable R&D tax incentive encourages clinical trial development in Australia, with early phase (I/II and III) often considered core activities. International companies can access the incentive, as the company is necessarily required to be a resident or hold I.P. in Australia. Ultimately, the R&D tax incentive can significantly lower the cost of R&D for global pharmaceutical companies.

*Note this is general information only, and companies should seek specific advice with respect to the eligibility, entitlements on obligations of registering their R&D Activities. More info is available on the websites of the Australian Government Agency Regulators:

China’s Great Leap Forward in Research and Development

According to a report released by the U.S. National Science Board (NSB), the United States is still leading in the world in gross domestic expenditure on Research and Development (R&D). However, the nation’s global share of R&D has been decreasing over the last 15 years, whereas China’s share has been increasing steadily over the last 25 years.

According to the NBS report, China’s R&D spending skyrocketed by approximately 20.3% per annum between 1992 and 2017, with the nation’s expenditure amount for 2017 reaching a whopping $254 billion (about 1.76 trillion Yuan).

The figure marks a year on year increase of 12.3%, as the nation pursues a development strategy through technological and scientific progress. That figure is also 123 times the amount China spent on R&D in 1991.

“The year-to-year growth in R&D spending indicates firm governmental and social support for making China a scientific power,” said Xie Xuemei, a specialist in innovation economics at Shanghai University in China.

One of the main reasons China’s R&D spending is surging so rapidly is that the nation is trying to gain a competitive advantage over other nations in emerging industries.

According to a different report by the Organization for Economic Cooperation and Development, the biggest source of China’s R&D funding is its business sector; which mirrors the financing trend of advanced economies.

The nation’s business enterprise sector coughed up approximately 76% of the total R&D expenditure in 2017, up from 2000’s 57% contribution. In the United States, the business sector contributed 62% of the total R&D expenditure in 2017, while Japan businesses funded 78%.

That said, the business sector is not the only factor contributing to the nation’s surge in R&D expenditure. The figures were also partly propelled by set government measures. According to the 13th Five Year Plan (2015-2020), China set a goal of hitting an R&D spending –to–GDP ratio of 2.5 percent by 2020.

It also vowed to implement strategies and build up core technologies that push for innovation-driven developments. If everything goes as planned, that will bring China in a head-to-head competition against the United States, which is the current main exporter of technology-intensive products.

Mercury Marine Scoops the “Wisconsin Manufacturer of the Year” Award

They are the Oscars of the manufacturing industry. The Wisconsin Manufacturer of the Year Awards Ceremony was held on February 21, 2019, at the Pfister Hotel in Milwaukee, and Mercury Marine (the world leader in marine propulsion and technology) was awarded as 2019’s Wisconsin Manufacturer of the Year in the Mega category.

This is the third time Mercury Marine (which is also the largest division of Brunswick Corporation) has won the prestigious award: first in 2006 then again in 2014. It also so happens that the Fond du Lac-based firm is celebrating its 80th anniversary in 2019.

For those not acquainted with the awards, they are presented once a year by Wisconsin Manufacturers and Commerce (WMC) to companies based in the state. All nominees of the awards should be firms that produce world-class products and create employment for people in communities where they (the companies) are located.

“We are honored to win the Wisconsin Manufacturer of the Year Award for the third time,” said John Pfeifer, the President of Mercury Marine. “We have invested more than $1 billion in expansion and R&D over the past 10 years and in 2018, we had the largest product launch in the history of our company,” he added.

Below is an enumeration of milestones Mercury Marine achieved in 2018.

Broke ground on completing a $10 million expansion project that added a 20,000 square feet research facility to the 2.5 million square foot campus. The firm also made major upgrades to its other facilities.
Had the largest, major new-product rollout in the company’s history. The rollout included 19 new V-6 and V-8 outboard engines and 7 other new engines. Better yet, on average, Marine Mercury has released a major product every six weeks for the last six years, allowing it to set the pace for marine innovation.
Workforce expanded by 12 percent to support increased production. The firm experienced an unmatched product demand response in 2018.
Adopted state-of-the-art, automated manufacturing equipment. These already-installed and implemented gadgets are highly effective compared to the previous equipment the company was using.
Also had to adopt new manufacturing practices and adapt them to higher output when demand skyrocketed beyond their expectations.

“Although Mercury has unveiled many new innovations and has amassed many successes through the years, 2018 stands out as a particularly remarkable year of achievements that will help to shape the future of both Mercury Marine and the entire boating industry and it is gratifying to be recognized for this honor by the WMC,” Pfeifer wrote in a statement after winning the award.

As a show of appreciation, the company has decided to celebrate its 80th anniversary throughout the year with its customers and employees.

Hampshire Pet Products Set A World Record Thanks To Its R&D Efforts

There are lots of world records regarding the pets we adore so much. For instance, the Longest Dog – a Great Dane that measured more than 7 feet from its hind legs to the nose. Tallest Dog? That was Zeus, another Great Dane that was 44 inches tall.

There is even a record for the heaviest dog. The English Mastiff named Zorba from the UK made the Guinness Book of World Records, thanks her massive size. She weighed more than 343 pounds and measured 8 feet 3 inches.

But there is a dog-related record that’s more interesting than all of these. In 2011, Hampshire Pet Products in Joplin, Missouri received an entry in the Guinness Book of World Records for making the largest dog biscuit that weighed 617 lb. (279.87 kg). The biscuit was 19 ft. (5.79 m) long, 1.63 inches (0.04 m) deep, and 3.8 ft. (1.16 m) wide. In addition, it required ten bakers to bake it, and it was made to celebrate the firm’s 10th anniversary.

In case you did not notice, the dog biscuit weighed twice as much as poor Zorba (the heaviest dog.) So how was Hampshire Pet Products able to pull it off?

Two months after the deadly Joplin tornado that blew out the south wall of Hampshire’s processing facility, the company, famed for its cold extruded and baked pet treats, got serious about setting a new Guinness world record for the biggest dog biscuit.

But it was not that simple. To turn this goal into a reality, it took the firm three consecutive months of baking trials with strict Research and Development (R&D) times before they could start the real attempt. On the day of the event, the baking procedure alone took four hours.

The company even added a new, secret weapon to its product development arsenal: a test facility.

“We now have our own internal R&D test kitchen, so we can test new products in house with the customer’s help or without the customer’s help,” Curt Dudley, vice president of sales says. “The previous Guinness Record for a dog biscuit was held in the UK and it weighed less than 300 pounds. Our company’s goal was to set a new record with a dog biscuit that weighed more than 400 pounds.”

This focus on R&D is also how Hampshire Pet Products, in partnership with its clients, is able to launch over 60 new products each year. Using the SKALA system, the company collects data during the different points in the baking process, which will be used for R&D purposes to innovate and increase efficiency. The company’s skilled employees have the ability to develop new and custom features for their equipment, providing a competitive advantage by increasing the business’s flexibility and being able to test new items in the market.

Chicago and Indiana Among the Fastest Growing Life Sciences Clusters

In an industrial sector defined mostly by innovation, life sciences research remains a high expense, high-risk scheme – and having a great location strategy is a vital success factor.

According to Deloitte’s 2019 Global Life Sciences Outlook, rising research and development (R&D) costs, operating costs, competitive wages for top talents, and skyrocketing lab rent payment in top tier clusters are driving life science firms to newfangled and creative real estate strategies so they can remain near resources and top talent.

Competitive and expensive real estate markets are forcing life sciences firms to think twice when assessing their real estate preferences. For the most highly in-demand locations, fierce competition for talent and space is resulting in both creative renovations and new development of first generation space.

But not every need for life sciences laboratory space can be met in larger and more established clusters such as San Diego, Boston-Cambridge, or Raleigh Durham. As these cities face a scarcity of laboratory space and other life sciences real estate, companies looking for alternative options are discovering second-rank markets such as Chicago, Indiana, Seattle, and Denver. Even though established United States clusters are located on either coast, emerging clusters are showing that life science companies are growing and taking root in the middle of the nation.

Midwest cities such as Indiana are showing sufficient growth to rank as emerging clusters. Indiana’s pharmaceutical and medical device industries have shown steady growth since 2014 and was ranked in the top 10 states for bio-science patent distributions in 2016. According to TEConomy 2018 research on Investment, Innovation, and Job Creation in the Bioscience Industry, Indiana boasted the highest location quotient for drugs and pharmaceuticals compared to all other US states. This implies there is a high employment concentration in the industry in this city relative to the rest of the nation.

Illinois, chiefly the Chicago region, is now home to several top research institutions and universities, and also boasts the headquarters of big firms such as Hospira, Baxter International and Abbot Laboratories.

The Windy City also received favorable attention in February 2018 when CBRE (the commercial real estate giant) pointed out the city’s emergence as a noteworthy life sciences cluster. And even though the region ranks tenth in NIH funding with awards totaling around $688.2 million, it placed ninth in lab space (8.8 million square feet), patents (1246), and VC funding ($332.21 million from nine deals).

Over the next few years, we can expect these city’s commercial real estate sector to be the main beneficiaries of the booming life sciences sector.