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Session 2502

Successful Government-Industry Models of Industrial Outreach

David Swanson, Richard Korchak Georgia Institute of Technology/Manufacturing Extension Partnership

The modernization of American manufacturing enterprises became a major concern of government and industry in recent years. The principal causes for this public-private concern over industrial strength and economic growth have been based on the perceived decline in American industries share of world markets, the dislocation of workers as a result of the cutback in defense spending, and the successful and massive introduction of foreign made products into American markets. The evidence of the economic problems are wage stagnation and job losses in many industries, a decline in world market share. , a loss of employment opportunities, and a severe imbalance in trade with foreign countries.

The responses to these problems, after the initial reactions such a restraints on imports, were that industry needed modernization, access to research, and incentives to bring new processes and products into the market. The long standing faith in technology combined with the realization that major competitor countries were focusing on manufacturing brought into focus the need to spur the introduction of technologies into the markets and processes. The need to interject appropriate technologies into products, processes and systems demanded interventions into the existing processes of transferring technologies. There was also the realization that large companies had the human and financial resources but the smaller companies lacked these capabilities. Technological solutions, along with the implementation of new management techniques and more attention to the needs of national and international customers, became the focus of industry and government. Along with this realization were the studies that revealed the dearth of automation in smaller American companies as compared to those in Japan.

Introducing new concepts and technologies that would make manufacturing companies more adept and modem, carried the assumptions that these technologies would mean lower costs, better products, and more employment. Firms producing better quality good at lower costs would be able to compete with foreign firms, thus solving many of the balance of payment, economic growth, and wage issues. Strengthening the manufacturing sectors would also mean a stronger nation in economic and military terms. The common good in government and private terms was seen as the reason for introducing new partnerships that would focus on modernizing manufacturing companies. Better products and lower costs would mean expansion of market share, wealth and influence.

The issue of how to accomplish the goals of economic growth through technology utilization under the constraints of a drive to reduce the federal budget. This meant that the states and industries would have to participate in the endeavor and that the results would need to be realized quickly in order to sustain political support. Politics of the day also demanded that the programs and incentives be directed at the smaller manufacturers. Large companies were assumed to have the capabilities to pursue modernization and foreign market penetration without the help of government. Many of the large companies already had proven their ability to successfully compete aircraft, electronics, computer, software, pharmaceutical and several other industrial sectors. But it was painfully clear that smaller companies lacking these capabilities and resources were not adopting newer technologies and were losing market share domestically and intemationaJly. Smaller firms by nearly every measure used fewer technologies than larger firms and indeed fewer than their overseas counterparts.

A variety of alternatives were implemented by states and the federal government to remedy the problem. Lower corporate and personal taxes, public money to support applied research, tax incentives for investments in equipment and research, removal of some regulatory constraints, assistance in examining foreign market opportunities, and technical assistance programs were implemented. The later, industrial out reach, is the focus of this paper and is evidence of one of the most dramatic shifts in support for industry in several decades. The federal government, after years of offering

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Korchak, R., & Swanson, D. (1996, June), Successful Government Industry Models Of Industrial Outreach Paper presented at 1996 Annual Conference, Washington, District of Columbia. 10.18260/1-2--6302