President-elect Donald Trump has made bolstering U.S. manufacturing an important policy priority, and according to the Information Technology and Innovation Foundation (ITIF), one of the most important ways for the country to regain global manufacturing market share and jobs is to focus on “smart” manufacturing.

ITIF, a leading U.S. science and tech policy think tank, released a new report explaining how smart manufacturing—the application of information and communications technologies to every facet of modern manufacturing processes—could reduce the advantages low-wage nations have in the manufacturing industry in favor of higher-cost nations such as the United States, but only if policymakers act.

“The digitalization of manufacturing is transforming everything from how products are designed, fabricated, and serviced, to the operations and energy footprint of factories and the management of supply chains,” said Stephen J. Ezell, the report’s author and ITIF vice president for global innovation policy. “The countries, companies, and industries that lead in embracing smart-manufacturing techniques will gain first-mover advantage over global competitors. If policymakers want to ensure that American industries remain on the cutting edge of manufacturing innovation to stay globally competitive, they need to implement policies that can help ensure the United States remains a smart-manufacturing leader.”

Ezell’s report explains that the current transformation in manufacturing stems from the advent and maturity of several foundational digital technologies, including sensors, wireless connectivity, data analytics, generative and computer-aided design, and advanced robotics. These digital technologies will transform nearly every aspect of modern manufacturing, from the design of manufactured goods, to the management and execution of production processes and factory operations, to the integration of industrial supply chains, to how products are used by customers once they leave the factory floor.

Recognizing the importance of smart manufacturing to their industrial future, several countries have already launched policies and programs to support the research, development, and deployment of these technologies, including China, Germany, the European Union, Korea, Sweden, and the United Kingdom.

To ensure America’s continuing leadership in smart manufacturing, ITIF urges Congress to enact several pices of legislation. Among these would be measures to allocate funding to build out the Manufacturing USA network; provide a stronger tax incentive for investment in machinery and equipment; expand the development and use of standards-based, nationally portable, industry-recognized certifications; increase support for vocational-education programs at community colleges; and fund research and development into technological challenges relevant to the Internet of Things. ITIF also usrges Congress to pass the Small Business R&D Act, the Energy Modernization Act, the Manufacturing Universities Act, and the National Fab Lab Network Act.

ITIF also usrges Congress and the administration to support trade agreements that preclude partner nations from imposing barriers to crossborder data flows.

“The marriage of digital and industrial is the defining aspect of the fifth wave of the industrial revolution,” concluded Ezell. “Yet the private sector will not be able to navigate this transformation alone. Around the world, nations are implementing smart-manufacturing strategies and making attendant investments to ensure that their manufacturing enterprises, large and small alike, are positioned to take optimal advantage of the smart-manufacturing revolution. If the United States wishes to remain a leading smart-manufacturing economy, policymakers must implement robust, proactive, and coordinated public policies that support America’s manufacturing sector and its ability to leverage smart-manufacturing techniques.”