Strengthening
American Manufacturing
The Role of the Manufacturing
Extension Partnership
Summary of a Symposium
Charles W. Wessner, Rapporteur
Committee on 21st Century Manufacturing:
The Role of the Manufacturing Extension Partnership Program
of the National Institute of Standards and Technology
Board on Science, Technology, and Economic Policy
Policy and Global Affairs
NATIONAL RESEARCH COUNCIL
OF THE NATIONAL ACADEMIES
THE NATIONAL ACADEMIES PRESS
Washington, D.C.
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NOTICE: The project that is the subject of this report was approved by the Governing Board of the National Research Council, whose members are drawn from the councils of the National Academy of Sciences, the National Academy of Engineering, and the Institute of Medicine. The members of the committee responsible for the report were chosen for their special competences and with regard for appropriate balance.
This study was supported by: Contract/Grant No. SB134106Z0011, Task Order #9, between the National Academy of Sciences and the National Institute of Standards and Technology. Any opinions, findings, conclusions, or recommendations expressed in this publication are those of the author and do not necessarily reflect the views of the organizations or agencies that provided support for the project.
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THE NATIONAL ACADEMIES
Advisers to the Nation on Science, Engineering, and Medicine
The National Academy of Sciences is a private, nonprofit, self-perpetuating society of distinguished scholars engaged in scientific and engineering research, dedicated to the furtherance of science and technology and to their use for the general welfare. Upon the authority of the charter granted to it by the Congress in 1863, the Academy has a mandate that requires it to advise the federal government on scientific and technical matters. Dr. Ralph J. Cicerone is president of the National Academy of Sciences.
The National Academy of Engineering was established in 1964, under the charter of the National Academy of Sciences, as a parallel organization of outstanding engineers. It is autonomous in its administration and in the selection of its members, sharing with the National Academy of Sciences the responsibility for advising the federal government. The National Academy of Engineering also sponsors engineering programs aimed at meeting national needs, encourages education and research, and recognizes the superior achievements of engineers. Dr. C. D. Mote, Jr., is president of the National Academy of Engineering.
The Institute of Medicine was established in 1970 by the National Academy of Sciences to secure the services of eminent members of appropriate professions in the examination of policy matters pertaining to the health of the public. The Institute acts under the responsibility given to the National Academy of Sciences by its congressional charter to be an adviser to the federal government and, upon its own initiative, to identify issues of medical care, research, and education. Dr. Harvey V. Fineberg is president of the Institute of Medicine.
The National Research Council was organized by the National Academy of Sciences in 1916 to associate the broad community of science and technology with the Academy’s purposes of furthering knowledge and advising the federal government. Functioning in accordance with general policies determined by the Academy, the Council has become the principal operating agency of both the National Academy of Sciences and the National Academy of Engineering in providing services to the government, the public, and the scientific and engineering communities. The Council is administered jointly by both Academies and the Institute of Medicine. Dr. Ralph J. Cicerone and Dr. C. D. Mote, Jr., are chair and vice chair, respectively, of the National Research Council.
Committee on 21st Century Manufacturing:
The Role of the Manufacturing Extension Partnership Program of the National Institute of Standards and Technology*
Philip P. Shapira, Chair
Professor of Management, Innovation and Policy
Director, Manchester Institute of Innovation Research
Manchester Business School
University of Manchester
and
Professor, School of Public Policy
Director, Georgia Tech Program in Science, Technology and Innovation Policy
Georgia Institute of Technology
Edward Breiner
President & CEO
Schramm, Inc.
Mary L. Good (NAE)
Dean Emeritus, Donaghey College of Engineering and Information Technology
Special Advisor to the Chancellor for Economic Development
University of Arkansas at Little Rock
James Griffith
President & CEO
The Timken Company
Robert James
Interim Secretary General
National Research Council, Canada
Ginger Lew
Managing Director
Enduring Hydro
Deborah J. Nightingale (NAE)
Professor of the Practice of Aeronautics and Astronautics and Engineering Systems
Massachusetts Institute of Technology
Luis M. Proenza
President
University of Akron
Paul K. Wright (NAE)
Director
Center for Information Research in the Interest of Society
A. Martin Berlin Chair in Mechanical Engineering
University of California, Berkeley
PROJECT STAFF
Charles W. Wessner
Study Director
Alan H. Anderson
Consultant
McAlister T. Clabaugh
Program Officer
Sujai J. Shivakumar
Senior Program Officer
David S. Dawson
Senior Program Assistant
(through June 2013)
David E. Dierksheide
Program Officer
*As of August 2013
For the National Research Council (NRC), this project was overseen by the Board on Science, Technology and Economic Policy (STEP), a standing board of the NRC established by the National Academies of Sciences and Engineering and the Institute of Medicine in 1991. The mandate of the Board on Science, Technology, and Economic Policy is to advise federal, state, and local governments and inform the public about economic and related public policies to promote the creation, diffusion, and application of new scientific and technical knowledge to enhance the productivity and competitiveness of the U.S. economy and foster economic prosperity for all Americans. The STEP Board and its committees marshal research and the expertise of scholars, industrial managers, investors, and former public officials in a wide range of policy areas that affect the speed and direction of scientific and technological change and their contributions to the growth of the U.S. and global economies. Results are communicated through reports, conferences, workshops, briefings, and electronic media subject to the procedures of the National Academies to ensure their authoritativeness, independence, and objectivity. The members of the STEP Board* and the NRC staff are listed below:
Paul L. Joskow, Chair
President
Alfred P. Sloan Foundation
Ernst R. Berndt
Louis E. Seley Professor in Applied Economics
Massachusetts Institute of Technology
Jeff Bingaman
Former U.S. Senator, New Mexico
U.S. Senate
Ellen Dulberger
Managing Partner
Ellen Dulberger Enterprises, LLC
Alan M. Garber (IOM)
Provost
Harvard University
Ralph E. Gomory (NAS/NAE)
Research Professor
Stern School of Business
New York University
John L. Hennessy (NAS/NAE)
President
Stanford University
William H. Janeway
Managing Director and Senior Advisor
Warburg Pincus, LLC
Richard K. Lester
Japan Steel Industry Professor
Head, Nuclear Science and Engineering
Founding Director, Industrial Performance Center
Massachusetts Institute of Technology
*As of August 2013.
David T. Morgenthaler
Founder
Morgenthaler Ventures
Luis M. Proenza
President
University of Akron
William J. Raduchel
Independent Investor and Director
Kathryn L. Shaw
Ernest C. Arbuckle Professor of Economics
Graduate School of Business
Stanford University
Laura D'Andrea Tyson
S.K. and Angela Chan Professor of Global Management
Haas School of Business
University of California-Berkeley
Harold R. Varian
Chief Economist
Google Inc.
Alan Wm. Wolff
Senior Counsel
McKenna Long & Aldridge LLP
STEP Staff
Stephen A. Merrill
Executive Director
Paul T. Beaton
Program Officer
McAlister T. Clabaugh
Program Officer
Aqila A. Coulthurst
Program Coordinator
Charles W. Wessner
Program Director
David S. Dawson
Senior Program Assistant
(through June 2013)
David E. Dierksheide
Program Officer
Sujai J. Shivakumar
Senior Program Officer
Manufacturing strength is linked closely to the innovative potential and competitiveness of nations. In many sectors, innovative methods and ideas are generated and perfected through the process of making things. In recognition, a recent Report of the President’s Council of Advisors on Science and Technology (PCAST) and the President’s Innovation and Technology Advisory Committee (PITAC) emphasized the critical importance of advanced manufacturing in driving knowledge production and innovation in the United States.1 Manufacturing companies play a vital role in the economic growth, high skill employment, and competitiveness of the United States economy. They are responsible for over two-thirds of business and industrial R&D, employing the majority of domestic scientists and engineers. Furthermore, manufacturing R&D is the dominant source of innovative new service-sector technologies that reach beyond the manufacturing arena.2
The Manufacturing Extension Partnership (MEP)—a program of the U.S. Department of Commerce’s National Institute of Standards and Technology (NIST)—has sought for more than two decades to strengthen American manufacturing. It is a national network of affiliated manufacturing extension centers and field offices located throughout all fifty states and Puerto Rico. Qualified MEP Centers work directly with small and medium manufacturing firms in their state or sub-state region, providing expertise, services and assistance directed to foster growth, improve supply chain positioning, leverage emerging technologies, upgrade manufacturing processes, develop work force training, and apply and implement new information.
Given the importance of innovation to economic growth and competitiveness, MEP today is seeking to evolve beyond its traditional support
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1President’s Council of Advisors on Science and Technology, “Report to the President on Ensuring American Leadership in Advanced Manufacturing,” 2011, <http://www.whitehouse.gov/sites/default/files/microsites/ostp/pcastadvanced-manufacturing-june2011.pdf>.
2The status of U.S. manufacturing is discussed in detail by a new report by the Department of Commerce, written in consultation with the National Economic Council. This report argues that, despite recent declines, manufacturing remains a vital part of the U.S. economy. U.S. Department of Commerce, “The Competitiveness and Innovative Capacity of the United States,” Washington, DC, January 2012.
for lean manufacturing to increase the innovative capacity of the nation’s small and medium manufacturers.
THE STEP BOARD’S RESEARCH ON INNOVATION AND COMPETITIVENESS
The National Research Council, under the auspices of its Board on Science, Technology, and Economic Policy (STEP), has since 1991 undertaken a program of activities to improve policymakers' understandings of the interconnections of science, technology, and economic policy and their importance for the American economy and its international competitive position. The Board's activities have contributed to increased policy recognition of the importance of technology, innovation, and entrepreneurship to economic growth. This work is in many ways congruent with economic growth theory, which emphasizes the role of technology creation in the generation of significant growth externalities.3 In addition, many economists have recognized the limitations of traditional trade theory, particularly with respect to the reality of imperfect international competition. Public-private partnerships are increasingly recognized for their contributions to the commercialization of state and national investments in research and development. Such partnerships help address the challenges associated with the transition of research into products ready for the marketplace.4
One important element of STEP analysis has concerned the growth and impact of foreign technology programs.5 U.S. competitors have launched substantial programs to support new technologies, small firm development, innovative production at large companies, and consortia among large and small firms to strengthen national and regional positions in strategic sectors. Some governments overseas have chosen to provide public support to innovation to overcome the market imperfections apparent in their national innovation systems. They believe that the rising costs and risks associated with new potentially high-payoff technologies, and the growing global dispersal of technical expertise, underscore the need for national R&D programs to support new and existing high-technology firms within their borders.6
______________
3National Research Council, Enhancing Productivity Growth in the Information Age, D. W. Jorgenson and C. W. Wessner, eds., Washington, DC: The National Academies Press, 2007.
4National Research Council, Government-Industry Partnerships for the Development of New Technologies: Summary Report, C. W. Wessner, ed., Washington, DC: The National Academies Press, 2003.
5For a review of the challenges and opportunities faced by the United States in the face of unprecedented global competition for developing, commercializing, and manufacturing the next generation of technologies, see National Research Council, Rising to the Challenge: U.S. Innovation Policy for the Global Economy, C. W. Wessner and A. Wm. Wolff, eds., Washington, DC: The National Academies Press, 2012.
6For a discussion of Chinese initiatives to support national competitiveness, see National Research Council, Rising the Challenge: U.S. Innovation Policy for the Global Economy, Ibid, Chapter 5.
THE MEP STUDY
In 2011, MEP requested the National Academies’ Board on Science, Technology, and Economy Policy (STEP) to undertake a review of MEP. As noted below, this study seeks to generate a better understanding of the operation, achievements, and challenges of the Manufacturing Extension Partnership (MEP) program in its mission to support, strengthen, and grow U.S. manufacturing.
Project Statement of Task
An ad hoc committee will carry out an evaluation of the operation, achievements, and challenges of the Manufacturing Extension Partnership (MEP) program at the National Institute of Standards and Technology. The committee will hold a series of fact-finding workshops and commission research papers and case studies to review and document the program's current achievements, challenges, and new opportunities; identify and review similar national programs from abroad in order to draw on foreign practices, funding levels, and accomplishments as a point of reference; and discuss current needs and initiatives in light of the global focus on advanced manufacturing. One workshop summary will be prepared in the course of the study. The committee will develop findings and recommendations to improve program operations and impact for inclusion in the committee's final consensus report.
THIS REPORT
To launch this study of MEP, the STEP Board convened a workshop of business leaders, academic experts, and state and federal officials to review current operations and some of the recent MEP initiatives in the broader context of global manufacturing trends and the opportunities for high-value manufacturing companies. The conference also addressed the metrics and impacts of MEP and identified potential areas of improvement. The meeting drew attention to the scale and focuses of MEP, and highlighted the role it plays in supporting and enabling U.S. manufacturers to compete more effectively in the global marketplace. This volume is a summary of this initial workshop.
This report includes an overview of key issues raised at this workshop and a detailed summary of the conference presentations. This workshop summary has been prepared by the workshop rapporteur as a factual summary of what occurred at the workshop. The planning committee’s role was limited to planning and convening the workshop. The statements made are those of the rapporteur or individual workshop participants and do not necessarily represent
the views of all workshop participants, the planning committee, or the National Academies.
To further address the Statement of Task, the Committee has commissioned research, reviewed program data, and visited MEP Centers to document the program's current achievements and challenges. In addition, the Committee has reviewed a number of leading national programs to support applied research and manufacturing in order to learn more about foreign practices, funding levels, and accomplishments. This information will contribute to the Committee’s final report. The Committee’s goal is to inform a wide array of stakeholders, from federal and state policymakers and NIST and other federal agencies to small and large manufacturers, academic researchers, and others concerned about the manufacturing challenge and the role of MEP.
ACKNOWLEDGMENTS
On behalf of the National Academies, we express our appreciation and recognition for the insights, experiences, and perspectives made available by the participants of this meeting. We are indebted to Alan Anderson for summarizing the proceedings of the meeting. We are also indebted to Dr. Sujai Shivakumar for his important contributions to the quality of the report and the review process. We also wish to acknowledge McAlister Clabaugh and David Dawson for their contributions to the organization of the symposium.
ACKNOWLEDGMENT OF REVIEWERS
This report has been reviewed in draft form by individuals chosen for their diverse perspectives and technical expertise, in accordance with procedures approved by the National Academies’ Report Review Committee. The purpose of this independent review is to provide candid and critical comments that will assist the institution in making its published report as sound as possible and to ensure that the report meets institutional standards for quality and objectivity. The review comments and draft manuscript remain confidential to protect the integrity of the process.
We wish to thank the following individuals for their review of this report: Yoram Koren, University of Michigan; Diane Palmintera, Innovation Associates; Jan Youtie, Georgia Institute of Technology; and Jose Zayas-Castro, University of South Florida.
Although the reviewers listed above have provided many constructive comments and suggestions, they were not asked to endorse the content of the report, nor did they see the final draft before its release. Responsibility for the final content of this report rests entirely with the rapporteur and the institution.
| Philip Shapira | Charles W. Wessner |
