solvency and viability of smaller firms if they are not accomplished successfully. Consequently, smaller firms place great importance on ''doing it right the first time.'' They may not get a second chance.


The large and growing importance of smaller firms in the U.S. manufacturing sector, coupled with evidence that their response to a rapidly changing competitive environment is lagging, has prompted growing interest in providing various forms of assistance to these firms. A wide array of programs and resources, both public and private, is already available. (These programs are reviewed in Chapter 3.)

The Clinton administration has published plans to raise significantly the contribution of the federal government in industrial extension efforts (Clinton and Gore, 1993). President Clinton has proposed the creation of a national network of manufacturing extension centers. Federal funds, matched by state and local funding, would go to support and build on existing state, local, and university programs to expand assistance services "to give all firms access to the technologies, testing facilities, and training programs they need" (Clinton and Gore, 1993).

Initial efforts to implement this national network have been included in the Technology Reinvestment Project, the multiagency federal program for defense technology conversion, reinvestment, and transition assistance (U.S. Department of Defense, 1993). Almost 2800 proposals were received in July 1993, of which 545 were in the area of technology deployment. Technology deployment proposals were solicited in one of four activities: manufacturing extension services, extension enabling services, alternative deployment pilot projects, and technology access services. Additional proposals relevant to industrial extension were sought for the Defense Dual Use Assistance Extension Program (U.S. Department of Defense, 1993). Fiscal year 1993 appropriations for the Manufacturing Extension Programs is $87.4 million; appropriations for the Defense Dual Use Assistance Extension Program is $90.8 million (U.S. Department of Defense, 1993). The proposal conditions require cost sharing of at least 50 percent.

These budgets represent a substantial increase in resources available for public industrial assistance services. A better understanding of the barriers facing smaller manufacturers in their efforts to modernize their operations is a prerequisite for effective use of those resources. Accordingly, the following chapters examine the barriers, opportunities for assistance providers to help firms overcome them, and some of the lessons learned by existing programs, focusing on the MTCs.

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