THE US GOVERNMENT POLICY AIMED AT THE DEVELOPMENT OF THE INDUSTRIAL AND TECHNOLOGICAL CAPACITY OF SMALL AND MEDIUM-SIZED ENTERPRISES (1980S–1990S)

Abstract

The United States is one of the most technologically advanced countries in the world. At the same time, during the period of not less than 50 years it has been experiencing strong competition from innovative economies of such countries as Japan and Germany. In order to reduce the USA's technological lag with Japan, the Republican government of Ronald Reagan and George H.W. Bush started to pay special attention to the development of partnerships between government and small or medium-sized business, especially in the field of research and development (R&D). The Republicans were convinced that economic growth could be achieved by attraction of private capital for creation of partnerships based on the ``government-industry{''} principle. Moreover, federal investments in technology were also necessary. In 1988, the National Institute of Standards and Technology (NIST) was created. Its aim was to promote the economic growth of the United States through partnerships with industry in the sphere of development and application of new technologies and standards. The mission of NIST laboratories was to satisfy needs of the US industry in technological infrastructure, including standards, measuring technology, data evaluation, simulation of manufacturing processes, product testing and quality control technology. The Omnibus Trade and Competitiveness Act of 1988 marked the beginning of two experimental programs carried out under the auspices of the National Institute of Standards and Technology: the Manufacturing Extension Partnership (MEP) and the Advanced Technology Program (ATP). The aim of the first program was to provide technical assistance and support in the field of management to small and medium-sized companies. MEP was launched in 1989 and was originally considered as a program for creation of manufacturing technology centers to provide services to small and medium-sized enterprises. The main task of the established regional centers was to improve the manufacturing and technological capacity of US small companies. Qualified MEP centers worked directly with small and medium manufacturing firms 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. Implementation of the MEP program had led to several important results. First, the regional manufacturing centers received a powerful incentive to find new partner organizations and provide services needed by small and medium-sized enterprises. Second, the enterprises-customers also had strong motivation because they invested their own funds in the manufacturing process modernization. Third, partial payment for services by the federal, regional or local government made services of regional centers more affordable to small and medium-sized enterprises. As a result, by the end of the 1990s, regional manufacturing centers had worked on more than 9 000 various projects with about 30 000 small and medium-sized enterprises. Another initiative aimed at reducing the USA's technological lag, was development of the Advanced Technology Program. It was designed to bridge the gap between the research lab and the marketplace, to enhance US competitiveness, as well as to create conditions under which the US economy could benefit from partnership-based federal investments in R&D. This program was aimed to share federal costs with industry in order to accelerate development and wide dissemination of new high-risk technologies that promised greater economic benefits for the country. The ATP funding was directed to technical research but not product development. Companies, either singly or jointly, conceived, proposed and executed all projects, often in collaboration with universities and federal laboratories. The ATP shared the cost for projects that were selected for a limited time. Single-company awardees could receive up to $2 million for R&D activities for up to three years. Larger companies had to contribute at least sixty percent of the total project cost. Joint ventures could receive funds for R&D activities for up to five years. Thus, developed in 1988 under the Reagan administration, first funded in 1990 under the Bush administration, and reached the large-scale development under the Clinton administration, the Advanced Technology Program represented one element of the U.S. government's efforts to restore and enhance the competitiveness of the U.S. economy. It provided cost-shared, competitive grants to industry to support R&D on high-risk, cutting-edge technologies with broad commercial potential and societal benefit.