What are Manufacturing Extension Partnerships?

    Manufacturing Extension Partnerships are one form of technical assistance within economic development strategies.  What is technical assistance?

    Technology can be defined as the creation of new ideas and technological diffusion can be defined as how does new information get disbursed across space.  A slight modification to each of these things leads to a defintion of technical assistance. Technical assistance is providing information and resources to communities that don't have access to this information.

    Manufacturing Extension Partnerships help small and medium sized businesses become more competitive by using advanced manufacturing technologies or techniques and best practices through cost shared partnerships with states, and center distribution systems.

   Ron Meleny, Wisconsin Manufacturing Extension Partnership, put it this way…”We are change agents, we want to help make your company more competitive and profitable.”

    Locally managed extension centers or partnerships offer technical assistance and the latest business practices to help the nation's smaller manufacturers improve their competitiveness.  There exists a network of more than 400 manufacturing extension centers and field offices located throughout the country.

    While part of a national network, MEP centers are independent, non-profit organizations. They offer products and services that meet the specific needs of the region's local manufacturers.  Each center works directly with area firms to provide expertise and services tailored to their most critical needs, which range from process improvements and worker training to business practices and applications of information technology. Solutions are offered through a combination of direct assistance from center staff and work with outside consultants.  MEP centers are staffed by knowledgeable manufacturing engineers and business specialists who typically have years of practical experience gained from working on the manufacturing floor, managing plant operations, or both. MEP center staff also know the local business community and the available local resources and can access additional resources available through the MEP network.  As a result, centers help small firms to overcome barriers in locating and obtaining private-sector resources.

Technical Assistance exists in numerous forms including the following:
1) Consultants
2) University Research Facilities
3) Total Quality Management in large industrial firms

Approaches to providing technical assistance vary considerably and include the following:
- sometimes program are run by state agencies
- in other cases, by universities or nonprofit organizations
- some use faculty or private consultants
- others have full time professional field engineers
- programs tend to serve firms with less than 500 employees
- programs vary along degree of technological assistance that they can provide, (advanced technology to microcomputer assistance)
- passive vs. house calls approach
(Source: Shapira, P.)

    During the presidencies of Reagan and Bush, the manufacturing sector of the U.S. economy lost ground to both imports and the recession, resulting in the loss of 1.8 million manufacturing jobs and a negative trade balance which peaked at $167 billion in 1987.
    The underlying premise is that the key cause of the decline in U.S. manufacturing competitiveness has been the inability of smaller manufacturers to implement manufacturing process technologies and techniques which would support high quality low cost production, while allowing for rapid changes in product design.

    The 1988 Omnibus Trade and Competitiveness Act established the Manufacturing Technology Centers which were the precursor to the MEP program.  Congress perceived that the United States was lagging in global competition.  It passed legislation changing the name of National Bureau of Standards to the National Institue of Standards and Technology (NIST).  NIST and mandating an emphasis on improving U.S. technology.  NIST is part of the U.S. Department of Commerce.  The National Bureau of Standards had been created to regulate precise weights and measures and the distribution of thousands of calibrated samples, providing benefits to many companies.

    Two programs were initiated at NIST, Manufacturing Extension Partnership and Advanced Technology Program.  These initiatives were well chosen mechanisms for responding to the needs of the times, and they were launched on a pilot scale.  By 1992, seven Manufacturing Technology Centers were established.  These are located in areas with relatively high concentrations of industrial firms.  They are managed by local sponsors and draw on expertise from a wide variety of sources, including universities.
    During the first three years of operation, only 1200 small manufacturing establishments were assisted.  An important shift also took place in the types of services expected to be provided by the MEP centers..  The mission changed to off the shelf best practices. This change reflected a shift from the supply side policy, where the focus is on the transfer to industrial firms of technology created by federal laboratories, to a demand side policy aimed at meeting the actual needs of smaller firms, which are better served by existing proven technologies along with implementation assistance.  Studies have shown that concerns over government regulation and the need for business assistance (marketing and finance) may well take precedence over technology needs.

The Growth of MEP:

    Since 1993, MEP has grown from a small pilot program operating in seven states to a national program in all 50 states accessible to the country’s nearly 382,000 smaller manufacturers.
Given the important role as suppliers to larger firms, lags in the technological performance of small and medium sized firms will adversely affect competitiveness throughout American industry.
As international competition in manufacturing increases, American industry is confronted with increasing pressure to enhance its productivity, workforce skills, work organization, product design, and marketing.  As international competition in manufacturing increases, U.S. industry must fare better in transferring and adopting new and best practice manufacturing technologies throughout the nation’s factories and industrial firms.

Other Historical Notes:

• A few states (Georgia and North Carolina) have offered industrial extension for three decades, usually managed through the state university system.

• 84% of the 42 state industrial extension programs were established since 1980.

Purpose of Manufacturing Extension Partnerships:

- maintaining well paying jobs in manufacturing and linked services
- reducing the trade deficit
- generating the resources necessary to fund future phases of research and development.

(Source: Shapira, P.)

Relationship to Agricultural Extensions: 

Manufacturing Extension Partnerships are considered to be modeled after the very effective federal  Agricultural Extension Programs. Connect to the United States Department of Agriculture Extension Service at: http://web.fie.com/htdoc/fed/agr/crs/any/text/any/agrtcr02.htm

Agricultural extension is credited with playing a critical role in the massive rise of U.S. agricultural productivity over the twentieth century.  In 1910, more than one third of the U.S. population lived on farms and each farmworker fed seven people.  Today, less than 2% of Americans live on farms, with each farmworker feeding 83 people.

Modes of sharing information within agricultural extensions:  one on one contacts between agents and farmers, publications, electronic media, and workshops and assistance.

1999 was declared the Year of the Small Manufacturer by Secretary of Commerce William Daley- it is a year long celebration of the achievement of small manufacturers.

• Manufacturers with fewer than 500 employees make up over 98% of all U.S. manufacturers.
• Some leading economists estimate that technology accounts for at least 50 percent of the economic growth in this and other industrialized nations.
• Firms with fewer than 500 people have generated about 3/4 of new manufacturing jobs created over the last two decades.
• Nearly 12 million Americans are employed in small manufacturing establishments.  Mnay of these jobs are high skilled, high wage jobs, paying an average 89% more than the average retail salary.
• There are 381,000 small U.S. manufacturing establishments, contributing more than half of the total U.S. value in manufacturing.  However, productivity among smaller manufactuers is growing at half the rate of larger manufacturers.

 
 

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This page was created by: Andy Pauline
for partial fulfillment of PLAN 261: Urban and Regional Economic Development
If you have any questions, please email Professor Ed Feser at feser@email.unc.edu
University of North Carolina@Chapel Hill
Department of City and Regional Planning
April 26, 1999