Making Things, Better: Federal Support for U.S. Manufacturing

The energy system relies on the ability to manufacture the components necessary to generate, transport, and use energy. Boosting a strong domestic manufacturing sector has long found supporters on both sides of the aisle. In its first 100 days, the Biden administration announced an executive order to develop a supply chain strategy, following the Trump administration’s establishment of the Office of Trade and Manufacturing Policy in the same timeframe.

Manufacturing is one of the largest sectors of the U.S economy, representing 11% of total gross domestic product. Despite this, manufacturing employment has fallen from its peak of nearly 20 million workers in 1979 to just under 13 million in 2024—all while the U.S. leads the world in funding for research, development, and demonstration (RD&D), meaning that U.S. inventions are being manufactured elsewhere.

There are clear national security benefits to maintaining a strong, domestic manufacturing sector that reduces reliance on volatile or adversarial nations. There are also economic benefits such as providing good-paying jobs to American workers, and environmental benefits of to reducing emissions from manufacturing processes and producing components for clean energy deployment.

The federal government provides support through a variety of programs that address specific aspects of the U.S. manufacturing ecosystem. This guide provides a brief overview of these programs and their role in increasing U.S. manufacturing capacity, supporting manufacturing process innovation, strengthening supply chain resiliency, and setting manufacturing strategy.

Programs focused on increasing U.S. manufacturing capacity 

These programs focus on sustaining manufacturing capabilities and breaking through technological barriers.  

• The National Semiconductor Technology Center, established by the CHIPS and Science Act of 2022, is a forthcoming public-private partnership led by the Department of Commerce. The program seeks to strengthen the U.S. semiconductor manufacturing ecosystem through partnerships between government, industry, and academia to conduct research, design prototypes, and build a strong workforce. 
• The Manufacturing Technology (ManTech) Program is a program administered by the Department of Defense (DOD) to develop and deploy key defense-related manufacturing technologies and to accelerate manufacturing process innovation, especially for small- and medium-sized businesses. 
• The Advanced Manufacturing Program at the National Science Foundation (NSF) programs funds research to address issues to revitalize American manufacturing across a range of key industries, with emphasis on multidisciplinary research to transform manufacturing capabilities, methods, and practices. 
• The Manufacturing Extension Partnership based at the National Institute of Standards and Technology (NIST) is a national network of centers located in all 50 states and Puerto Rico that provides services to small- and medium-sized manufacturers to improve production processes and upgrade technology. 
• The Advanced Manufacturing Production Tax Credit (45X) is an Inflation Reduction Act (IRA) created production tax credit (PTC) aimed at incentivizing domestic production of clean energy technology components, including wind turbine blades, solar panel wafers, electricity inverters, batteries, and critical minerals. 
• The Qualifying Advanced Energy Project Tax Credit (48C), expanded by the IRA, is an investment tax credit (ITC) for domestic advanced energy projects, including projects to produce or recycle clean energy products and projects to reduce emissions at manufacturing facilities. 
• Key IRA production and investment tax credits provide a 10% bonus for meeting domestic manufacturing requirements for steel, iron, or manufactured components. These credits are the Renewable Electricity PTC (phasing out in 2024) and its successor Clean Electricity Production Tax Credit (45Y), and the Energy ITC (phasing out in 2024) and its successor Clean Electricity ITC (48E). 
• The Defense Production Act delegates broad authorities to the president under certain circumstances to prioritize manufacturing and production related to national defense, including for energy security. DPA was used by both the Trump and Biden administrations during the COVID-19 pandemic and has been authorized by the Biden administration for the production of critical minerals and heat pumps. 
• Build America, Buy America established by the Bipartisan Infrastructure Law (BIL) of 2022 requires that all iron, steel, manufactured products, and construction materials used in eligible federal infrastructure projects be produced in the United States. 

Programs focused on manufacturing process innovation 

These programs bring together manufacturers and federal expertise to address manufacturing challenges and develop improved practices.  

• Manufacturing USA is a network of 17 manufacturing research institutes that focus on developing and commercializing emerging manufacturing technologies through partnerships between the private sector and the Departments of Commerce, Defense, and Energy. It was established in the bipartisan Revitalize American Manufacturing and Innovation Act of 2014. 
• The State Manufacturing Leadership Program was established at DOE by the BIL to provide funding to states to help small- and medium-sized manufacturers adopt high-performance computing and implement smart manufacturing technologies. 
• The Industrial Assessment Centers Program is a DOE program that conducts no-cost, in-depth energy assessments for small- and medium-sized manufacturers and provides analysis and recommendations for energy usage improvements. Assessments are conducted with the assistance of students, which provides an additional workforce development component to local universities and colleges. The BIL added new centers at community colleges, union training programs, and trade schools. 

• The Next Generation Materials and Processes Program at DOE funds projects that focus on high-performance materials, advanced manufacturing processes, and the use of data to ensure manufacturing security and resilience. 
• The National Advanced Packaging and Manufacturing Program, established at NIST by the CHIPS and Science Act, will fund research and development to accelerate domestic capacity for advanced packaging substrates and substrate materials, a key technology for manufacturing semiconductors.   
• The Future Manufacturing Program at NSF funds fundamental research and workforce training to overcome the scientific, technological, educational, economic, and social barriers that new manufacturing capabilities face, with a focus on cybermanufacturing, eco-manufacturing, and biomanufacturing. 
• The Manufacturing Systems Integration Program at NSF funds research into the role of digital technologies, such as automation, in global manufacturing.  

Programs focused on strengthening supply chain resiliency 

These programs focus specifically on strengthening U.S. manufacturing capabilities for energy technologies to ensure a resilient, secure supply of key energy components and technologies.  

• The Advanced Energy Manufacturing and Recycling Grants Program at DOE program provides funding to small- and medium-sized manufacturers to enable them to build new or retrofit existing manufacturing and industrial facilities in communities where coal mines or coal power plants have closed. 
• The Battery Materials Processing and Battery Manufacturing Grants established at DOE by the BIL provide grants for battery materials processing and manufacturing to ensure the United States has a robust battery manufacturing industry.  

Programs focused on setting manufacturing strategy 

• The Advanced Manufacturing Technology (MFGTech) Roadmap Program awards grants to universities, non-profits, and others, to develop strategic “roadmaps” for critical technologies to develop objectives and create a shared vision for advanced manufacturing alongside industry consortia. 
• Several federal agencies, including the Departments of Energy, Defense, and Commerce, published reports in 2021 released reports to identify and set strategies for addressing weaknesses in key supply chains. These reports were in response to the Biden administration’s Executive Order on America’s Supply Chains.