Research, Innovation and Technology

The internet may be saving our sanity (somewhat) with animal videos and Zoom chats . . . but there is a downside. With so much more happening online—such as retail and banking, not to mention all that working from home—hackers have a lot more targets.

The data depressingly bears that out:

• Large data breaches have skyrocketed by 273% in the first quarter of 2020, according to data from cloud computing company Iomart.
• Ransomware is up 90%, according to VMware, while attacks that destroy data or networks have risen 102%. And last, “island hopping,” in which criminals infiltrate one company in order to reach its partners or clients, is up 33%.

And here’s a worrying wrinkle: according to Iomart, manufacturing is one of the hardest-hit sectors.

There can be a grim benefit to cyberattacks, in that companies can learn from others that have already survived. To that end, aluminum manufacturer Norsk Hydro’s experience with a massive ransomware attack last year provides a number of (very) hard-earned lessons. From Bloomberg Businessweek (subscription):

• After the attack, the company had to make sure its employees got paid—but banks wouldn’t connect digitally with the company due to fears of cyber infection. So one executive, at Hydro’s Brazilian location, copied the previous month’s paychecks from their external payroll system, weeding out employees who had left or been fired.
• At a Pennsylvania plant, which lost access to corporate email and to the software that organizes its orders, employees received orders on their personal accounts. Then, having dug some old computers out of storage, they printed out the forms and distributed copies on the floor.
• At headquarters, Hydro had to rebuild their entire network. They were so worried about keeping these plans safe that they barred cleaning staff from coming into the room.

Hydro’s leaders consider themselves lucky to have only lost $60 million to the attacks, which unfortunately tells you a lot.

NAM with a plan: Though manufacturers should certainly prepare for the worst, they can also take many steps to minimize, if not eliminate, the danger. The NAM provides many cyber-related resources for members, including most recently a new cyber-insurance program called NAM Cyber Cover.

And here’s good news: the NAM’s Cyber Forum, cosponsored by PwC and eSentire, is on for the fall, in a virtual format. It will be from 11:00 a.m. to 1:00 p.m. EDT on four Thursdays in a row: Oct. 1, 8, 15 and 22. To learn more, email [email protected].

Here’s some good news: Moderna’s final-stage COVID-19 vaccine test began on Monday, according to The Wall Street Journal (subscription). The company’s researchers intend to conduct a nationwide, 30,000-person trial of its experimental vaccine, with the goal of testing whether two doses of the product can safely protect against COVID-19.

The timeline: Moderna is hoping that, with positive results, a vaccine could be available as early as this fall.

And more good news: Pfizer and German biotech BioNTech have also started their 30,000-person trials, which will extend around the globe. Their timeline? To get the vaccine into regulatory review by the fall.

So once a vaccine is ready, what happens next? A whole bunch of logistical challenges is what. The Atlantic details some of the complications involved:

• A vaccine probably won’t offer complete protection, though it will prevent severe cases.
• Production will be a challenge, with manufacturers seeking to make hundreds of millions of doses in record time and jockeying for supplies like glass vials.
• Distribution will face major hurdles as federal and state governments are forced to coordinate vaccine delivery.
• One in five Americans say they will refuse to get a vaccine even if it’s available, while nearly a third say they haven’t decided.

And one last PSA: STAT News gives us a heads-up that these vaccines may create some physical discomfort. That may actually be good news—the reaction could be a sign of your immune system going to work—but it’s probably best not to expect an entirely pleasant experience from a potentially lifesaving vaccine.

As always, your best bet for now is to follow CDC guidelines, wash your hands, maintain social distancing and wear a face covering.

The new report from the ITI Foundation offers strategies to maintain U.S. strength, spur greater innovation and increase domestic production.

U.S. policies spur success: “America still leads in innovation and drug development, in large part due to effective life-science policies, including significant federal investment in life-sciences basic research, robust intellectual property (IP) protections, effective technology transfer policies, investment incentives, and, importantly, drug pricing policies that enable companies to invest in high-risk drug development.”

Recommendations for policymakers: The paper suggests U.S. policymakers should focus on four key areas:

• Maintaining U.S. strength in pricing, tech transfer and intellectual property—and avoiding oppressive drug price control schemes that damage competitiveness;
• Boosting innovation through investment and additional tax incentives that promote research and development;
• Increasing domestic production, including via tax credits and additional funding for key research institutions; and
• Combating foreign mercantilism by making sure that America’s trading partners pay their “fair share” for new drugs, treatments and other medical products.

Innovation in the time of COVID-19: At a time when U.S. pharmaceutical companies are central to the fight against a global pandemic, the ability to innovate successfully is of paramount importance. The U.S. House Committee on Energy and Commerce held a hearing on Tuesday that discussed the issue, titled “Pathway to a Vaccine: Efforts to Develop a Safe, Effective and Accessible COVID-19 Vaccine.”

The NAM says: “The research ecosystem we have in the United States supports a global leadership position of biopharmaceutical innovation,” said NAM Vice President of Infrastructure, Innovation and Human Resources Policy Robyn Boerstling. “Manufacturers are committed to building upon that innovation—but it’s clear that government-led pricing restrictions and importing bad health care policies used by our competitors is not the way forward.”

Related . . . The NAM has launched a new six-figure television and digital ad campaign aimed at potential rules to address drug pricing through International Price Indexing and drug importation.

The new bill—an NAM priority introduced by Rep. Jackie Walorski (R-IN)—would boost the manufacturing industry’s ability to innovate.

The numbers: U.S. manufacturers spent more than $270 billion in R&D in 2018—or nearly two-thirds of all private-sector R&D.

The bill: Rep. Walorski’s bill would further support manufacturers seeking to invest in critical research and development, including:

• Doubling the traditional R&D tax credit from 20% to 40%;
• Doubling the alternative simplified tax credit from 14% to 28%; and
• Making it easier for small businesses to access the R&D tax credit.

An NAM priority: The NAM has consistently pushed lawmakers to include R&D tax policies as part of additional COVID-19 legislation—including in a letter to congressional leadership last week. The NAM’s onshoring plan also calls for enhancing the R&D tax credit.

A word from the NAM: “The manufacturing industry is the backbone of American research and development,” said NAM Senior Director of Tax Policy David Eiselsberg. “This bill would support jobs, boost innovation and help ensure America’s future competitiveness.”

And speaking of NAM tax priorities . . . the Treasury Department sealed a major victory for manufacturers this week by finalizing a rule that will provide relief for manufacturers with high-taxed foreign income.

• The problem: 2017’s tax reform created a new foreign minimum tax, which imposed a minimum 13.125% tax on foreign earnings. Due to the way the tax interacted with existing international rules, manufacturers with high-taxed foreign earnings could be subject to the new minimum tax.
• The solution: Treasury adopted key NAM recommendations in its final rule, which creates an elective high-tax exception that would spare manufacturers from paying additional U.S. tax if foreign earnings are subject to a foreign tax rate greater than 18.9%. The rule represents an important step toward implementing the foreign minimum tax according to congressional intent.

Nephron Pharmaceuticals Corporation, based in West Columbia, S.C., makes a significant portion of the nebulizer medicines used in the treatment of COVID-19 in the United States.

Typically, Nephron produces about 85 million doses of inhalation solution every month. As orders skyrocket for treatments used to combat respiratory illnesses like COVID-19, the manufacturer is working tirelessly to keep up with demand.

“We have all of our production lines going at 100 percent, and we’re rewarding faster changeover times to make sure we get them quickly cleaned, steamed and back in operation for the next batch,” said Nephron Pharmaceuticals CEO and owner Lou Kennedy. “We’ve more than doubled production. I predicted we might reach 110 million batches this month—and as of the end of March, we were at 193 million. We’re operating at max capacity, and orders are still coming in.”

Nephron has been in touch with federal regulators, including the Food and Drug Administration, seeking permission to open six additional product lines. Kennedy hopes to move forward with those additional lines in the near future in order to expand capacity and deliver additional products. So far, Kennedy has been encouraged by the FDA response.

“I can tell you that we have never seen a more responsive FDA,” said Kennedy. “All things are moving at breakneck speed, and I am so appreciative for that.”

In addition to serving patients across the country, Nephron is working to ensure that its employees stay safe and healthy, with temperature checks for every employee at shift changes and a ban on outside visitors at the facility. In addition to producing medication, Nephron is making hand sanitizer for employees’ use and will donate much of the surplus product to community organizations. In order to serve employees who need childcare assistance as schools close and daycare centers cease to operate, Nephron has organized a group of certified K-12 teachers to safely provide childcare from 8 a.m. to 5 p.m.

Even as some workplaces shut down, manufacturers like Nephron continue to produce and innovate at high speed, helping to deliver medical supplies and other essential products at a time of urgent need across the country.

“Every moment we’re involved in something new,” said Kennedy. “It’s just amazing how this country is coming together—and we’re so happy to do anything we can. Any little bit of help, we’re glad to do it.”

“In times of significant need, manufacturers have always stepped forward to answer the call,” said Jay Timmons, president and CEO of the National Association of Manufacturers. “As we face this period of challenge and uncertainty, we are delivering for our customers, for our communities, for our country and for the world.”

Washington, D.C. – The National Association of Manufacturers is calling on the federal government to take legislative and administrative steps to equip manufacturers to respond to COVID-19 and future public health emergencies, including specific actions in five key policy areas.

“When our country faces difficult challenges, manufacturers strive to be the solution,” said NAM President and CEO Jay Timmons. “For the good of our communities and our country, we are committed to bringing people together as we battle the COVID-19 outbreak. Neither government nor industry can solve this challenge alone. This is a path forward to ensure Americans’ health, our business stability and our economic resilience, and we hope our elected leaders can unite to meet this moment.”

The NAM’s “COVID-19 Policy Action Plan Recommendations” identify five key policy areas where legislative and administration action would help combat COVID-19 and future public health emergencies successfully:

• Keeping Our Workforce Safe and Healthy
• Protecting Our Communities
• Providing Economic Stability
• Encouraging Resilient Growth in the United States
• Encouraging Long-Term Job Growth

Read the full policy action plan here.

-NAM-

The National Association of Manufacturers is the largest manufacturing association in the United States, representing small and large manufacturers in every industrial sector and in all 50 states. Manufacturing employs more than 12.8 million men and women, contributes $2.37 trillion to the U.S. economy annually and has the largest economic multiplier of any major sector and accounts for 63% of private-sector research and development. The NAM is the powerful voice of the manufacturing community and the leading advocate for a policy agenda that helps manufacturers compete in the global economy and create jobs across the United States. For more information about the Manufacturers or to follow us on Twitter and Facebook, please visit www.nam.org.

Last week, National Association of Manufacturers President and CEO Jay Timmons delivered the 2020 State of Manufacturing Address at Vermeer Corporation in Pella, Iowa, highlighting the NAM’s policy agenda and laying out manufacturers’ priorities. Coinciding with the 125th anniversary of the founding of the NAM, the livestreamed Address kicks off a yearlong focus on the association’s contributions to manufacturing and its work to strengthen the industry going forward.

“The story of the past 125 years is one of manufacturers…changing our country for the better, and being the solution,” said Timmons. “That’s our calling for the next 125 years.”

Timmons honed in on Creators Wanted, an unprecedented campaign led by the Manufacturing Institute, the NAM’s workforce and education partner, to attract a new generation and change the industry’s perception. This spring, the Creators Wanted Tour is expected to engage more than 250,000 Americans with high-tech manufacturing and reach more than 15 million people online.  The tour stops will build momentum for the Making America Festival in Cincinnati in September. Timmons also announced major Creators Wanted sponsorships from Vermeer and neighboring Iowa manufacturer Pella Corporation.

At the event, the NAM released its “Competing to Win” agenda, a detailed roadmap for candidates and elected officials. Representing 12.8 million men and women who make things in America—from small business owners to global companies in every industrial sector—Timmons called for the nation to support leaders who stand for free enterprise, competitiveness, individual liberty and equal opportunity.

After the Address, Timmons participated in a panel with Vermeer’s President and CEO Jason Andringa, moderated by NAM’s Senior Vice President of Communications and Brand Strategy Erin Streeter. They further emphasized the role business leaders should play in helping unify the nation, the success of manufacturers’ trade agenda and Andringa’s ability to make unprecedented investments in his business due to tax and regulatory reform.

“Manufacturers like us are proud to offer rewarding careers, to support our community and to strengthen our country,” said Andringa. “Like millions of men and women across the United States, we are committed to building a better future—and today, we’re more optimistic than ever about what that future holds.”

View a photo gallery from the event.

Want to help shape the future? Learn how to get involved in our Creators Wanted campaign, and read Competing to Win, our policy blueprint for candidates and elected officials.

Washington, D.C. – National Association of Manufacturers President and CEO Jay Timmons delivered the eighth-annual NAM State of Manufacturing Address today at equipment manufacturer Vermeer Corporation in Pella, Iowa. Speaking to Vermeer Corporation employees, business and community leaders and local manufacturers, Timmons highlighted the NAM’s ambitious plan to address the industry’s growing workforce crisis with the groundbreaking, multimillion-dollar “Creators Wanted” campaign.

In his remarks, Timmons said:

“For 125 years, your NAM has led the business community and fought for all who make things in America. And all of you in this room, and the 13 million men and women in our industry, some of whom are watching today, are part of the storied history of building an exceptional nation. And Vermeer, this very company, embodies the story of manufacturers’ progress.”

. . . .

“In this pivotal year, the NAM and The Manufacturing Institute, our workforce and education partner, are setting out on an unprecedented campaign to inspire a new generation—and tell the real story of our industry. . . . Our historic effort, called “Creators Wanted,” is a capital campaign that will support the programs of the Manufacturing Institute—including the STEP Women’s Initiative, youth engagement and Heroes MAKE America, which trains our returning servicemembers for high-paying manufacturing jobs.”

. . . .

“Just yesterday, in his remarks at the World Economic Forum, President Trump touted manufacturing’s growth and success during his presidency. As I’ve said before, from tax reform to regulatory certainty to leveling the playing field, promises made to manufacturers have been promises kept—and the employment and output numbers show it.”

. . . .

“Here’s what I will say about this election . . . It’s not the label next to a candidate’s name—whether an “R,” a “D” or an “I”—that determines whether he or she will be a good president or even a good member of Congress. The test is whether he or she will work to uphold the values that make America exceptional. These are the same four values, the same four pillars, that make our industry’s success possible.”

Timmons also noted the generous contributions made by Vermeer and Pella Corporation to the NAM’s Creators Wanted campaign.

“And I am proud to announce today that Vermeer Corporation, along with your foundation and Mary and Dr. Dale Andringa, have contributed $100,000 to this cause. And another local manufacturer, Pella Corporation, is also leading by example with a $100,000 contribution of their own,” said Timmons.

Vermeer Corporation President and CEO Jason Andringa thanked Timmons for his visit and the NAM’s commitment to ensuring the long-term success of manufacturing in the United States.

“Thank you to Jay Timmons and the National Association of Manufacturers for visiting Vermeer Corporation and recognizing the incredible work of our team members and manufacturers across the country,” said Andringa. “These men and women truly demonstrate the impact our industry makes every day and represent the success of American manufacturing.”

To read the full address, click here.

-NAM-

The National Association of Manufacturers is the largest manufacturing association in the United States, representing small and large manufacturers in every industrial sector and in all 50 states. Manufacturing employs more than 12.8 million men and women, contributes $2.37 trillion to the U.S. economy annually and has the largest economic multiplier of any major sector and accounts for 63% of private-sector research and development. The NAM is the powerful voice of the manufacturing community and the leading advocate for a policy agenda that helps manufacturers compete in the global economy and create jobs across the United States. For more information about the Manufacturers or to follow us on Twitter and Facebook, please visit www.nam.org.

As rapid technological innovation sweeps across the manufacturing industry, cybersecurity has become a top priority. David Brousell, Vice President and Executive Director of the Manufacturing Leadership Council—the world’s first member-driven, global business leadership network dedicated to senior executives in the manufacturing industry—explains the importance of cybersecurity and what manufacturers are doing to combat global threats in the digital age.

Why is cybersecurity important for modern manufacturing?

Manufacturers are using cutting-edge digital technology to a greater degree than ever before. We’re putting sensors in equipment, digitizing supply chains and gathering data from customers to better the customer experience, to name just a few examples. The number of electronic connections we’re making is enormous—and the more you electronically link products and processes, the more vulnerable they become to cyberattacks.

What are the impacts of cyberattacks?

When we talk about cybersecurity, we’re not just talking about people trying to steal intellectual property. We’re also talking about attacks that target business operations, which can actually bring business to a halt. Manufacturers need to be able to guard against these attacks across the board in order to do their own innovative, cutting-edge work and to deliver for customers in the United States and around the world. That’s why manufacturers must invest in developing solutions that can stand strong against even the most sophisticated assault.

What are some of the challenges manufacturers face in cybersecurity?

The number one challenge is the increase in attacks. We do a lot of survey work among manufacturers of the Manufacturing Leadership Council, and the overwhelming majority of survey participants say they’re expecting more attacks in the year ahead. Just keeping up with the sheer volume of attacks is a big issue for manufacturing companies—large and small alike. This isn’t just an issue for multibillion-dollar enterprises. Cybersecurity is everyone’s concern.

What are manufacturers doing in the cybersecurity space to keep their work secure?

We’re taking a variety of actions. We’re continuing to invest in technology. We’re training people to understand best behaviors and best practices. And we’re trying to protect more and more on a systems level. For example, some companies are housing their information in the cloud because they feel that there are greater protections in a cloud environment than in a system on their own premises.

Most importantly, though, companies are adopting cybersecurity as a cultural discipline and making cybersecurity part of their business’ DNA and culture. Over many decades, manufacturers have made physical safety a well-honed science. Now we have to raise cybersecurity up to that level of safety if we’re going to bring it under control. We talk about how safety is everybody’s business—and now cybersecurity has to become everybody’s business, too.

Washington, D.C. – The Manufacturing Leadership Council has released a new blueprint to guide manufacturers as they transition to the digital model of doing business. The blueprint, called the 2019/2020 Critical Issues Agenda, is the latest strategic guidance on digital transformation released by the MLC, a division of the National Association of Manufacturers.

The MLC’s mission is to help senior manufacturing executives and emerging leaders define and shape a better future for themselves, their organizations and the industry by focusing on the intersecting business and technology issues driving manufacturing growth. The Critical Issues Agenda encompasses the technology, organizational and leadership requirements of implementing the digital model of modern manufacturing, also known as Manufacturing 4.0.

The agenda covers five categories:

• Factories of the Future
• Establishing M4.0 Cultures: Collaborative, Innovative, Integrated and Connected
• Transformative Technologies in Manufacturing
• Next-Generation Manufacturing Leadership and the Changing Workforce
• Manufacturing 4.0 Sustainability

The 2019/2020 Critical Issues Agenda identifies opportunities for manufacturers to become more efficient, more productive and even to develop new business models and services by successfully implementing new digital technologies and practices. These include data entrepreneurship, deploying artificial intelligence, the use of digital twins and providing digital skills training.

For nearly 10 years, our Critical Issues Agenda has proven to be a comprehensive and reliable model for embracing Manufacturing 4.0, said David R. Brousell, Co-Founder of the MLC. But what’s new and important this year is the need for leaders to develop greater digital acumen and for manufacturing organizations to deal with even greater volumes of data from increasingly connected factories and plants. If manufacturers can rise to these challenges, they will go a long way to unleashing the potential of M4.0.

The agenda is the result of a unique member-driven process designed to capture and reflect the views and insights of the MLC’s 1,500-strong executive membership. The resulting agenda is then finalized and approved by the MLC’s Board of Governors.

I am delighted that the MLC’s member-driven process continues to enable us to identify the critical issues that MLC members themselves have defined as most important in their drive to transform their businesses to world-class levels of efficiency and competitiveness, said John Fleming, chairman of the MLC’s Board of Governors and former executive vice president of global manufacturing and labor affairs at Ford Motor Company. The MLC will work tirelessly to deliver thought-leading knowledge and insights around these key transformational issues in the year ahead.

Full descriptions of the 2019/2020 Critical Issues Agenda are available on the MLC’s website and in the August 2019 issue of the Manufacturing Leadership Journal.

-MLC/NAM-

Founded in 2008, and now a division of the National Association of Manufacturers, the Manufacturing Leadership Council’s mission is to inspire and support manufacturing executives to achieve transformational growth for themselves, their companies and the industry at large through enlightened leadership. With more than 1,500 senior-level members from many of the world’s leading manufacturing companies, the MLC focuses on the intersection of advanced digital technologies and the business, identifying growth and improvement opportunities in the operation, organization and leadership of manufacturing enterprises as they pursue their journeys to Manufacturing 4.0.

The National Association of Manufacturers is the largest manufacturing association in the United States, representing small and large manufacturers in every industrial sector and in all 50 states. Manufacturing employs more than 12.8 million men and women, contributes $2.38 trillion to the U.S. economy annually, has the largest economic multiplier of any major sector and accounts for more than three-quarters of private-sector research and development. The NAM is the powerful voice of the manufacturing community and the leading advocate for a policy agenda that helps manufacturers compete in the global economy and create jobs across the United States. For more information about the Manufacturers or to follow us on Shopfloor, Twitter and Facebook, please visit www.nam.org.