The House Manufacturing Caucus recently asked the National Institute for Standards and Technology (NIST) to brief them on the NIST Manufacturing Extension Partnership (MEP) Program, a program which the Trump Administration proposed to eliminate in its FY18 budget. The briefing focused on how the program delivers value to the economy and national security of the United States through the services it provides to small- and medium-sized U.S. manufacturers.
The most recent statistics on MEP performance, based on 2016 data, were presented to the audience at the briefing. According to this data, a new study by the W.E. Upjohn Institute for Employment Research found that when applying the most conservative methods of measuring, the MEP program sees 8.71 return on investment to the U.S. taxpayer, which is significantly higher than most federal programs. According to the data, this means that the $130 million MEP program offers a return of $1.13 billion to the U.S. treasury—a net profit of over $1 billion to U.S. taxpayers.
The event was comprised of panels of economic and manufacturing experts, including representatives from individual state MEPs, MEP clients, and a representative from the Upjohn Institute. Some of the client companies focused their remarks on how a decline in MEP funding could negatively affect the national security of the U.S., offering what happened to the defense budget during sequestration as an example. During sequestration, military supply chain manufactures were hit hard by the downturn in funding. As a result, one Virginia-based company, Morphix Technologies, had to lay off 2/3 of its workforce, shifting from 60 employees to 20, and of those 20, those on the management team took no salary while they were working to protect the survival of the company. Morphix Technologies began working with GENEDGE, the Virginia MEP, and together they were able to develop a plan and identify gaps they needed to fill in order to get to new markets and survive as a company. Today, Morphix Technologies is alive and thriving as a result of their work with the Virginia MEP.
At the briefing a Rhode Island-based company, Goetz Composites, whose work with POLAIRS, the Rhode Island MEP, helped the company stay competitive in a time of mass-unemployment in the state. The MEP helped Goetz Composites to understand and manage risk by identifying which of their employees needed specific types of training, and where there were gaps that needed to be filled. As a result of these efforts, the company was able to hire 50 people in the past 2 years, 80% of which filled advanced manufacturing jobs. Additionally, of those advanced manufacturing jobs, 70% were filled by someone with no past manufacturing experience, and a majority were filled by individuals who had been previously underemployed or unemployed.
The MEP program works with small companies that are not able to invest in the type of services that MEP provides due to the very real financial and personnel constraints these small companies face. Yet, these companies are vital to the economic well-being and security of the United States. Eliminating MEP could harm our small and medium manufacturers, and thereby negatively affect our domestic supply chains capabilities, particularly in the area of national defense. As an example of the importance of small companies in the supply chain, the Rhode Island MEP representative shared that 95% of manufacturing companies in the state have less than 100 employees, and 74% have only 10-19 employees.
The briefing was recorded and can be viewed here: https://housemanufacturingcaucus-reed.house.gov/115th-congress-events.
To view the new report by the Upjohn Institute on “The National-Level Economic Impact of the Manufacturing Extension Partnership (MEP),” please visit: http://research.upjohn.org/cgi/viewcontent.cgi?article=1229&context=reports