MEP’s New Environment
Changing economic environment
- U.S. manufacturing has faced increasing challenges and recent developments have accelerated what many see as the need for rapid change and adjustment in this sector.
- Globalization, and especially the globalization of supply chains in manufacturing, means that American third, fourth, and fifth-tier suppliers can now face direct challenges from foreign manufacturers with different cost structures.
- Innovation, and especially the accelerating pace of technological change in manufacturing, means that firms need to continually and rapidly adapt to—and develop—new products and processes.
- Regulation, for example environmental regulation, is changing the way that manufacturing operates in the United States, and firms must adapt here too.
The population of manufacturing companies and MEP’s market targets
- The actual number of potential clients—i.e., manufacturing firms—in any given center’s region varies substantially, from almost 30,000 firms in southern California to less than 3,000 in some smaller states
- Manufacturers range in size from the large majority with fewer than 20 employees, to a handful with many thousands.
- The actual market for MEP services varies by region, but it likely does NOT include:
The very large number of firms that are in the main too small to take advantage of MEP’s services.
Firms larger than 250 employees who have other alternatives and tend to prefer commercial services providers.
The substantial numbers of smaller and mid-sized firms that have established customers, established products, and see limited value in change. They may not all be correct in this assessment, but their self-exclusion from MEP services is nonetheless a reality.
- Given very limited resources for outreach, centers must therefore decide how to target their efforts to maximize impact, meet program objectives, and at the same time generate sufficient fee revenues to meet federal match requirements.