A recent news brief from the Georgia Tech Office of Economic Development and Technology Ventures noted that the federally funded NIST Manufacturing Extension Program (MEP)-an industry-assistance program-is facing major budget cuts in 2005. MEP stands for the Manufacturing Extension Partner-ship, a nationwide network of not-for-profit centers in over 400 locations nationwide, whose sole purpose is to provide small and medium sized manufacturers with the help they need to succeed.
There are an estimated 350,000 small manufacturers in the U.S. that account for more than half the total value of U.S. production and represent nearly 99% of all manufacturing establishments. In addition, they are said to employ nearly 11.1 million people.
The centers, serving all 50 States and Puerto Rico, are linked together through NIST, and are funded by federal, state, local and private resources to serve manufacturers. That makes it possible for even the smallest companies to tap into the expertise of knowledgeable manufacturing and business specialists throughout the United States. These specialists are persons who have had experience on manufacturing floors and in plant operations.
Each center works directly with area manufacturer clients to provide expertise and services tailored to the clients' 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 outside consultants. Centers often help small companies overcome barriers in locating and obtaining private-sector resources. One such center is Georgia Tech's Economic Development Institute (EDI).
EDI says the MEP budget cut will "...considerably reduce, if not eliminate, many services provided to domestic industry already struggling against overseas competition." EDI expects to receive a $1.7 million annual cut in MEP funds starting July 2004, which will require reductions in staff and offices. Other centers surely will face similar consequences.
Since the beginning of MEP in 1988, over 149,000 companies have received assistance. Studies indicate that small manufacturers who work with their local NIST MEP center show dramatic improvements. For example, a survey of NIST MEP clients served from October 2002 through September 2003 shows that 5,015 companies around the country have:
- Created or retained 35,028 jobs
- Increased sales by $953 million
- Retained sales of $1.84 billion
- Realized $681 million in cost savings
- Invested $940 million in modernization, including plant and equipment, information systems and workforce and training
According to the Cato Institute, a nonprofit public policy research foundation headquartered in Washington, D.C., examples of waste and fraud in the federal budget have reached gargantuan proportions, which incite only yawns from Washington policymakers. So why would a program that produces positive results like these have funding cut by nearly 65%? Trimming the federal budget is a good thing, but here's an example of wrong-headed thinking. IH
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