Technology Transfer

The United States has experienced major trade deficits in manufactured goods each year since 1983, and U.S. companies have lost significant market share to foreign competitors. In particular, small manufacturers have not kept pace with their foreign rivals because they have not upgraded their manufacturing processes with basic automated equipment like computer-aided design systems. In response, four federal programs were created during the last three years to help small manufacturers regain their industrial competitiveness. The primary technology need of most small manufacturers is for proven, off-the-shelf automated technologies to enable them to raise productivity, improve product quality, and respond to changing market conditions. Most small manufacturers cannot effectively use advanced, state-of-the-art automated technologies developed at the National Institute of Standards and Technology and other federal laboratories because they generally do not have the resources or trained personnel to incorporate such technologies into their operations. Overall, GAO found that the four federal programs have been only somewhat effective in addressing the technological needs of small manufacturers to improve their competitiveness. In addition, the four programs have affected only a relatively small percentage of small manufacturers; by themselves, they are insufficient to have much effect on improving small manufacturers' competitive position. Moreover, while the federal programs offer incentives for states to start or expand technology assistance services, only seven states provide direct consultation to manufacturers--the type of help experts consider most effective in assisting manufacturers. Recently, three of these states substantially cut funding for their programs because of budget constraints.

GAO found that: (1) most state-of-the-art automated technologies developed at the National Institute of Standards and Technology (NIST) and other federal laboratories cannot effectively be used by small manufacturers, since such manufacturers generally do not have the resources or trained personnel to incorporate such technologies into their operations; (2) the four federal programs have been only somewhat effective in addressing the technological needs of small manufacturers to improve their competitiveness; (3) three centers initially proposed to transfer advanced technologies from federal laboratories to small manufacturers, but found that their clients primarily needed proven technologies; (4) the three centers initiated 1,336 projects emphasizing proven technologies and saving several firms $139 million through improved operations; and (5) only seven states provided direct consultation to manufacturers, the type of assistance experts considered most effective in helping manufacturers, and three of those states recently substantially reduced funding for their programs because of budget constraints.

Recommendations

Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.

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